Ryan Baird’s Investment Banking Revolution: Why Relationships Beat Transactions in Silicon Valley | Venture Capital Series

Anthony Codispoti : Welcome to another edition of the Inspired Stories podcast where leaders shared their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codispoti and today’s guest is Ryan Baird. Ryan is the managing partner at Baird Augustine, a cross-border, Neoinvestment Bank founded in 2010, based in Los Gatos, California and focused on providing financial services to individuals and corporations in various sectors.

Baird Augustine aims to provide investment opportunities and deliver innovative solutions and they have been recognized for their unique approach to cross-border investments. Ryan himself has an impressive track record in investment banking, risk management, and leadership, having previously led Leica, a social media platform that raised $35 million from investors. He also played a key role in investing in Xiaopang, the electric vehicle company now listed on the New York Stock Exchange as XPEB. In addition, Ryan is a managing partner at Hau family office where he continues to steer strategic capital initiatives. He has also founded Flotilla asset management and was instrumental in changing innovative ventures across diverse markets. His passion for fostering growth and innovation has made him a prominent figure in the industry. Now before we get into all that good stuff, today’s episode is brought to you by my company, Add Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cash flow by implementing one of our innovative programs. Results vary for each company and some organizations may not be eligible.

To find out if your company qualifies, contact us today at backbenefits.com. All right, back to our guest today, the CEO of Barrett Augustine, Ryan Barrett. I appreciate you making the time to share your story today. Thanks for having me.

It’s good to be here. So Ryan, you’ve had some interesting career stops along the way before forming Barrett Augustine. How would you characterize sort of the arc of those earlier experiences?

Ryan Baird : Yeah, so I’ve always been in the institutional investing space. Starting right here on Sand Hill Road, I was working for Morgan Stanley in their private wealth management division, working with clients.

I have $50 million of investable assets are greater with Morgan Stanley. And then I went into the hedge fund space where I was arbitraging volatility. I did some corporate development where we were looking for companies we can merge with or acquire. I did Global Venture, where we were investing in nine different countries every single year, and then bringing the top startups back here to Silicon Valley and helping them raise capital. And then I ran my own startup.

And the way I would really categorize it is I’ve always been in the institutional investing space where talking to investors that can deploy anywhere between $5 and $100 million into one deal. And lots of interesting lessons along the way. And happy to share any of the insights you want to know about.

Anthony Codispoti : Yeah, thanks for that. Say more about arbitraging volatility. What does that mean?

Ryan Baird : Yeah, so back when I was trading for a hedge fund and then running my own hedge fund, we were arbitraging volatility. So we were trading US listed options that are on stocks. And you can kind of think of it like insurance if you’re not familiar with options. You can basically and buy insurance on stocks. So if they were to fall, you don’t lose as much money as if you didn’t buy the insurance. And vice versa, you can buy insurance that it doesn’t go up too much.

You can sell that insurance, you can sell the downside or buy the downside insurance or sell it as well. So it gives people a lot of options. And what we were really doing was just hyper focusing on three to five different names. A lot of the other market makers or people that were providing liquidity in that space, they would focus on 100 plus names.

So what my mentor did was just start focusing on the high volume names and he trained us how to do that as well. And we were essentially just trying to buy really, really cheap volatility and sell expensive volatility at all times. And then at the end of the day, we would go home market neutral. So we wouldn’t be speculating on direction because honestly, we had no idea where the market was going to go. So during the day, we would just try to sell expensive volatility by cheap volatility. And then when it got close to the end of the day, we would make sure that we were market neutral so that we weren’t taking any market risk.

Anthony Codispoti : And was this a sustainable practice?

Ryan Baird : So the big lesson from arbitrage is that my teacher in or my professor in college was correct in that arbitrage is there, but it doesn’t stay there. And I started my firm, Flow-Till-O partners in 2010. And I had the dream of running this for decades. But during the time period that we were running the fund, options went from being priced in nickels to being priced in pennies. And once they made that transition, our margins just got crushed. So I saw the writing on the wall and made my move.

Anthony Codispoti : Interesting. So just that switch from nickels to pennies was enough that that shrunk the available margin that could be had on either side, whether you were shorting or longing. And so you’re like, oh, I see where this is going. Time to tap out. Exactly.

Ryan Baird : There were some other more technical rules too that happened that also were a big influence. But a lot of the stuff that I was doing doesn’t even really exist anymore. For example, if you were to provide liquidity on some exchanges, you would get a rebate. And if you took liquidity on a certain exchange, you would pay a fee. So there actually became a moment where you can arbitrage these fees. And I had written some algorithms to help do that. And that’s just a crazy world where you’re trading at the same price and you’re getting a 10th of a penny, but you’re trying to do it a million times to make that 10th of a penny. And it just became tougher and tougher. We were also based in San Francisco and it kind of felt like we needed to be more closely located to the exchanges if we were going to continue to do it. And we really just didn’t have the capital to make that kind of investment.

Anthony Codispoti : Got you. Okay. So when did you start some of the newer ventures that you’re still involved with today? Maybe let’s start with Barrett Augustine. What was the founding idea behind that? Why go through the trouble?

Ryan Baird : Yeah, that’s a great question. So both of my parents actually worked for Hewlett Packard their entire career. So I have the HP way ingrained in me. And the HP way was to run a business that is very relationship focused. It’s not necessarily, it’s not transactional.

It’s not transaction focused. And if you look at Silicon Valley, I mean, Steve Jobs had an internship with Hewlett Packard, Wozniak worked for Hewlett Packard. During the early days, Apple was very much a relationship focused business. And that’s how they were able to achieve such big things.

And Google, Amazon, Meta, they all copied HP. And, you know, they were able to accomplish big things because of this relationship based culture. However, over the past few decades, we’ve seen these tech companies that start off being very relationship focused, starting to grow to be 50,000 people, 80,000 people.

And once you have that many people, it’s hard to remember everyone’s wife’s name and their birthday and how many kids they have and what they’re involved in. And the culture changes. And you start seeing the average 10 year, how long people work at a particular company, you see that number start dropping. And in Silicon Valley, previously, it was well over 10 years that you would see people, you know, have a career. And as Silicon Valley has become more transactional, you see that average 10 year really starting to decline. And now only Nvidia and Tesla have an average 10 year over two years, which just means there’s an incredible recruiting costs that is happening in Silicon Valley, because people are kind of bouncing around, trying to maximize their paycheck.

Anthony Codispoti : Even at these really, quote unquote, desirable high level employment opportunities, like I think about an Apple, their typical turnover is faster than two years, is that right?

Ryan Baird : That’s correct. Their average 10 years less than two years. And, you know, that just speaks to Silicon Valley becoming more transactional as it’s gotten larger. Now, the exact same things have happened in investment banking. I mean, when I was at Morgan Stanley, we are very much a relationship based culture. And, you know, we would do anything for our clients, whether it was relating to finance and in our job versus just just being a friend. And, you know, when I did global venture, I got to meet a lot of new family offices that I hadn’t met before.

And many of them would want introductions to some of the bulge bracket investment banks. And I was shocked. The feedback I got back from the introductions was really negative.

And I take that personally. And basically, you know, these investment bankers were just treating these family offices very transactionally. And the attitude was, you know, pay us or you’re dead to us. And, you know, the first few times that happened, you know, I’d realized there was an opportunity. And, you know, along the way, my partner Henry Augustine had reached out to me. He wanted to help me raise capital to launch a hedge fund. But I was running my startup at the time.

So it wasn’t really good timing. And he had told me that he had launched a investment bank called Peer Equity Partners, where he was just going to work for clients for equity. And I was like, wow, that’s a crazy idea. I don’t know how you’re going to make any money.

But I love crazy ideas. Let me be on the board. And oh, by the way, I know a company that is looking to sell right now for a couple hundred million, they have already introduced them to a number of bulge bracket investment banks.

Anthony Codispoti : Sorry, let me let me stop you there. What is bulge bracket investment bank? What does that mean?

Ryan Baird : Oh, so bulge bracket investment banks are like JP Morgan, Morgan Stanley, Goldman Sachs, the big boys, the big boys, they’re the bulge bracket. Everyone else is kind of chasing them or will probably be one day acquired by one of them. But it just basically means that you’re getting introduced to the best in the industry.

Anthony Codispoti : So you had this, you had this company that, you know, looking to exit for $100 million.

Ryan Baird : And yeah, so, so I introduced introduced introduced them to Henry and kind of wanted to see how the investment bank would proceed. And at the same time, I was leaving, I was winding down my startup. And I was talking to a number of startups that wanted to either have me be the head of Corp Dev or or be their CEO and help them raise capital. And it just dawned on me that instead of working for one of these companies and putting all of my eggs in one basket, I can actually start an investment bank with Henry. And we can work with all of the startups and help all of them raise capital.

And that’s when Barrett Augustine was born. You know, we still do have a few legacy clients that we are working just for equity. But the vast majority of our clients, they’ve already raised call it five to $25 million.

And now they need to raise an institutional round. And the CEO would much rather work on building the business versus talking to hundreds of investors. So we take over that role will also help them, you know, reach any of their business objectives while we’re taking over the investor relations process.

Anthony Codispoti : Okay, so that’s what you’re doing. You’re stepping in to say, hey, we know how to talk this talk, we’ve got relationships with the institutional investors, let us go out, present you to them in the way that we know, you know, that they are sort of open to receiving it. And you can still continue building your product or your service over here, focus on what you’re good at.

Ryan Baird : That’s correct. We want them to focus on what they’re good at. We don’t want them spending time, you know, talking to a bunch of investors when they can be focused on building the business.

Anthony Codispoti : And so what does a typical portfolio company look like for you guys? Are there particular industries or sizes or geographical locations that you’re looking for?

Ryan Baird : We’re really stage agnostic industry agnostic. But they tend to be raising $100 million plus. That’s kind of the main common thread. If they’re not raising $100 million right now, they’re already a super successful entrepreneur that has already had $100 million exit. And this is their next big idea. We’ll step in and support them as well.

Anthony Codispoti : So $100 million to myself sounds like a lot of money. Paint a picture for where these companies are at when they’re raising that kind of capital.

Ryan Baird : Sure. So one of our clients right now is building robots to go help the nursing shortage that we’re experiencing right now. These robots don’t walk because they don’t really need to. They just roll and they can administer all of the medicine flawlessly and document it, which is really important. They can also give shots. They can also cook food and deliver it.

And you flip out the battery once every 24 hours. And they’re good to go. They’re not there to replace the nurses.

They’re there to do things that nurses don’t really like doing in the first place so that the nurses can do more human things. This client already has $300 million contracts to build these robots out. And they’re raising $100 million right now to build a manufacturing center to build these robots. Can we mention their name?

Yeah, they’re called Beyond Imagination. The co-founders are Dr. Harry Clore, who is the only person to get a Ph.D. to Ph.D. simultaneously. He got his in physics and science. And then we have Ray Kurzweil, who’s often considered one of the leading minds in AI. He’s been on the cover of Time Magazine and very highly regarded. And we’re honored to be working with them.

Anthony Codispoti : So have they developed? Is there a working prototype out there that is in practice that people are interacting with now?

Ryan Baird : Yeah, you can check out the videos on YouTube. It’s Beyond Imagination. The robots are blue. And they’re going to continue scaling and deploying these robots. And we’re just excited to grow with them.

Anthony Codispoti : That’s fascinating. This is really futuristic stuff that’s here today. Okay, so we got to do a little sidebar because that’s just the first one you brought up. Give us another portco that is doing something particularly fascinating right now. Sure.

Ryan Baird : So we also host a lot of events for investors. I think there’s a lot of events for entrepreneurs out there. And I think those events are really, really great. But we do events for investors and we allow investors to talk about their portfolio companies.

We just had a barbecue this last Saturday and had a really, really good time with a group of about 65 people here in the Las Gatos Hills. And we had a number of great startups. One that I would point out is called Orbit FAB. And they are creating gas stations in space. Before they would send up a satellite and it would be solar powered and it would last for about five years.

And then it basically falls from the sky and they put a new one up. Now they’ve invented a way to actually refill them while they’re in space, essentially taking the SpaceX model of reusability and applying it to satellites. And now everyone who’s sending satellites into space can use them a lot longer and it reduces the cost of creating these things and reduces the cost of deploying the technology.

Anthony Codispoti : So up until now, the reason that a satellite traditionally has an end of life is not because it, I don’t know, sort of disintegrates or falls apart or becomes antiquated. It’s because eventually whatever power source is on board is no longer adequate to sort of keep it flying in the correct part of orbit to keep it safe and aloft and all of that stuff.

And so when that happens, sort of plan for it and the satellite just falls out of the air, burns up in the atmosphere and they send another one up to fill its place. Am I understanding that correctly? That’s correct.

Yeah. And so now there’s some sort of a mechanism and what is it doing? Is it like swapping out a battery or like what is the refueling process actually look like?

Ryan Baird : It’s a satellite that’s floating over to the other satellites. It has this really high tech gas nozzle that essentially will insert the fuel and not make any of it leave. And this gives them a lot more optionality where before the satellites would just kind of float around Earth and you didn’t really want to move them because you didn’t have that feel available. Now you can actually move them and redesign them and and just extend the life by, you know, five, 10 X.

Anthony Codispoti : And so it’s gasoline that’s powering these things.

Ryan Baird : Well, they have gasoline that’s powering the movement component. Yeah, it’s a special type of fuel that they use in these satellites, but incredible company, you know, leading their market in a new industry and, you know, really excited about where they’re headed.

Anthony Codispoti : Okay. So as I understand it, there’s sort of three pillars of your business and we kind of have touched a little bit on the investment bank. Say more about the events that you were just mentioning. You host these in Los Gatos where you are who’s invited, why do they come, what’s the benefit that folks get from attending?

Ryan Baird : Yeah, so we do a lot of dinners and barbecues and walks around Lake Fursona, all with accredited investors. And depending on which investors we have with us will depend on which portfolio company gets talked about. So we’re always changing the different industries. But these events are for family offices, founders that have already raised, call it $5 million, founders that have already sold the company for $100 million plus.

And they’re just looking to connect with other people that are deploying capital across the alternative asset class space. And, you know, we’ll have a lot of these smaller hikes and barbecues and dinners. And then once a year, we’re going to be doing the Silicon Valley Economic Forum. And we’re going to be bringing together some high level people to do our annual events.

And the formula is pretty simple. We get a institutional investor with $100 billion AUM or greater. At our last event, we had Fiona Ma, who’s California State Treasurer. She oversees our state fund with $150 billion under management. She’s also on the board of CalPERS, which has a half a trillion dollars under management. And she’s invested in a lot of emerging managers. So a lot of emerging managers like to come out and hear her talk. We also get a CEO that’s taken a public.

At this last event, we had Dan Springer, who took DocuSign public, gave a great talk about the whole process and how to deal with board members. We’ll also try to get someone from the Mag7’s investment team. At this last event, we had Alan Wu, who does corporate development for NVIDIA. He was talking about where NVIDIA is going to be investing in AI over the next few years.

It was a great off the record talk. And then we featured a number of GPs across commercial real estate, private equity, hedge funds, venture capital, crypto. We’ve also seen a lot of GPs in the entertainment industry, especially film. And then we feature a number of our clients that are all raising between 50 and hundreds of millions of dollars. And then lastly, we have elected officials, a lot of the family offices in our network like talking to them.

We had the mayor San Jose, the mayor of Santa Clara, the mayor of Fremont, the vice mayor of Sunnyvale, city council member from Palo Alto, and a couple economic development commissioners. And then the last thing that we like to do is to make our events not too stale and to keep them exciting is we like to partner with different cultural groups. This last event, we partner with RevArt, which is a beautiful gallery in San Francisco, and they just opened up a new gallery in Mountain View. And they came and did a pop up art gallery at our event. And then we had spots, the Boston Dynamics Robotic Dog, give people a tour of the pop up art gallery, which is pretty fun.

Anthony Codispoti : You had a robotic dog giving a tour.

Ryan Baird : We had a robotic dog giving a tour of the art gallery. And then we had night robotics security guards in the parking lot. And they’re a publicly traded robotics company.

Anthony Codispoti : That’s great. And it sounds like the folks that you’ve got coming here are sort of the cream of the crop in your corner of the world, right? These are the top level investors, you know, very successful founders. And you guys are positioning yourself sort of at the center of all this, the connectors so that, you know, just sort of more deal flow more opportunities come to you guys because you’re known as being sort of the center of all this space.

Ryan Baird : Yeah, we just want people to know who we are and some of the families that we’re working with and help them deploy their capital into above average deal flow. It’s amazingly simple and amazingly complex at the same time.

Anthony Codispoti : And then the sort of third component, as I understand it, is your hedge fund. Say more about that. Yeah.

Ryan Baird : So in a previous life, I was running a hedge fund arbitraging volatility. And the problem with that strategy is that it’s arbitrage. So it can only take so much capital before the arbitrage that just isn’t isn’t big enough to take more capital. And, you know, I didn’t like the idea of the arbitrage going away, and then you have to find a new arbitrage.

Otherwise, you have to start all over or, or cease to exist. So we’ve honed a long, predominantly long strategy where we’re investing in market leaders early, being in Silicon Valley. We get to see all the hype cycles and all the buzz. And I feel like that has given us consistent advantage in finding these market leaders, you know, a year or two before Wall Street really understands them.

Anthony Codispoti : I’d actually be curious to hear quite a bit more about that, whatever it is that you’re allowed to say in terms of the trends that you’re seeing. You talked about the off the record conversation that you had with the gentleman from NVIDIA. And you’re in the middle of a lot of really interesting conversations, it seems like. What are the things that you’re kind of jazzed about that are taking place right now?

Ryan Baird : Yeah, I mean, obviously, AI is everywhere. It’s a lot of space. But going a little bit more specifically, I think space is probably one of the biggest opportunities in our lifetime that’s in front of us right now. We’re really excited about some of the satellite companies in our portfolio. And then, you know, robotics is also a huge theme. And we have a number of different portfolio companies in that space.

And then the last thing I would say is blockchain and Web three. I’ve been following Bitcoin since 2009, and really didn’t think it was going to last this long. But I’ve been telling people, if it hits $1,000, things probably going to be going a lot higher. Because if it’s not, if it’s not worth zero, then it’s worth something.

And what that something is, I think is yet to be determined. But I think one of the biggest trends right now that no one’s really talking about is that Bitcoin is eating Wall Street. And it really started with micro strategy, which is now called strategy. And the really innovative thing that they did is that their whole business model is just to own Bitcoin as their treasury asset. And what they’ve done in order to raise capital is to sell convertible bonds. And what this does is for the first time, a bond manager now has access to a Bitcoin backed bond. Now, this bond manager can’t invest in Bitcoin, they can’t invest in micro strategy, they can’t invest in preferred stock, but they can invest in the bonds. And now that micro strategy has allowed those bonds to be available. They were the number one performing bonds in the global bond market.

And if you’re a bond manager, and you didn’t own micro strategy, you weren’t one of the top performing managers. And this is a big deal because now a lot of companies that are just holding Bitcoin as their treasury asset can also go to Wall Street and sell convertible bonds in order to buy more Bitcoin. And it’s a creative because these convertible bonds convert above where the stock is trading today. So they basically sell a billion dollars in bonds at a let’s call it a 50% premium to where the stock is trading, they go and buy a billion dollars of Bitcoin, they get to add a billion dollars of Bitcoin to their balance sheet. And because the convertible bonds are above where the current stock price is, it adds more Bitcoin per share.

And the new way of tracking a lot of these companies is how quickly they’re adding Bitcoin per share being compared to other companies. I know this is kind of a mouthful and it is a lot. I feel uniquely positioned to understand this because of the derivatives involved in all of this, the convertible bonds are essentially a synthetic leap call option. And it’s just fascinating. It’s a huge financial innovation. It’s giving traditional fund managers access to Bitcoin derivative products and now that micro strategy has been so successful. It’s been included in the QQQ And I would guess that later this year it’s going to be added to the S &P 500 Wow. So whether people know it or not if they have a retirement account, they’re probably a little bit invested in Bitcoin And it’s a little bit now. It will be a lot

Anthony Codispoti : later Okay, so a couple of questions on this. I want to wrap my head around it. Why can’t investors just invest directly in Bitcoin? What’s the hurdle there?

Ryan Baird : So This actually this whole thing came to me because the Bitcoin ETF was going to come out I thought that I was going to research all the Bitcoin ETFs and be like, oh, okay If you don’t want to hold your Bitcoin yourself and you want to hold the ETF This is the ETF we’re recommending to family offices And what happened was is we we learned about all the ETFs, but we found micro strategy And what we realized is that if you own the Bitcoin ETF Over 20 years you lose a little bit of your Bitcoin because you’re paying the management fee every year If you buy micro strategy today Over 20 years your Bitcoin per share inside micro strategy Grows and that’s the big difference So in my opinion, you would rather own micro strategy over Bitcoin Because if you just own Bitcoin, you just own Bitcoin and it doesn’t grow If you own a Bitcoin ETF, you actually lose a little bit of Bitcoin along the way and explain what an ETF is Ryan An ETF is an exchange traded fund that gives you exposure to the Bitcoin index So you could either own that index and get a mirrored exposure to it Or you could actually hold it yourself, but then you risk Getting hacked and all these other things That are that are problems. So an ETF is just like the s and p 500 the sp y That holds the top 500 companies in the us The Bitcoin ETF just holds Bitcoin

Anthony Codispoti : And so what is it about micro strategy that allows and and and sort of the mechanisms that are at play here that allows The value of the Bitcoin per share to rise over time whereas in an ETF You’re you’re going to lose a little bit because of those management fees Doesn’t micro strategy aren’t they exposed to sort of those same management fees?

Ryan Baird : micro strategy holds its Bitcoin at Coinbase as it’s custodian and they’re not being charged the The same rate that an ETF has to charge its holders So because you know if you own the ETF, you know, it’s like 0.8 0.9 percent per year that you’re losing Right where if you just own micro strategy, you’re not paying that fee number one and number two Michael sailor the CEO of strategy has said over and over again That he’s just going to continue to sell bonds preferred stock and stock in order to buy more equity And as long as he does that as he buys more bitcoin your bitcoin per share grows and I don’t think a lot of people fully understand this but um Once they do Micro strategy and these you know, there’s there’s dozens of companies that are doing this is not just micro strategy But micro strategy is the clear market leader

Anthony Codispoti : When Did i’m trying to figure out because we’ve seen the price of bitcoin, you know be highly volatile But in and I don’t you can clue me in here what the exact time frame is I feel like in the last year maybe 18 months The price has really risen sharply again And so i’m curious how that recent increase in price Has aligned with micro strategy and the strategy that they’re implementing are these sort of running in parallel Is this the reason I guess the bigger question i’m asking is is this the reason that the Price of bitcoin has gone to the moon

Ryan Baird : again I mean this is this is part of the reason And you know, I think kind of the first step was the trump administration being much more friendly to The blockchain space And then number two strategy leading the way with their bitcoin treasury um strategy And then dozens of other companies have started copying their strategy We’re just now starting to see states Want to hold bitcoin as their treasury strategy. We’ve already heard countries are discussing Keeping it on their balance sheet. It sounds like the u.s wants to potentially convert their gold into bitcoin and You know, there’s only 21 million bitcoins. So The price needs to be readjusted to the demand And you know, we’re only at about a 3 percent adoption rate of bitcoin. So that’s like the internet in 1990 that’s like social media in 2005 And I think as more states countries and companies get involved We’ll continue to see it become volatile But I think it’ll prove to be a more scarce commodity than gold silver oil Um that it just seems like we keep finding more of

Anthony Codispoti : So Ryan, what’s your opinion is there? And maybe you can help me rephrase this question if I get a little bit wrong, but is there actual usable Functions for bitcoin either today or coming soon or is this really a speculative tool because People have decided that there’s value to it and it’s scarce. And so that’s what’s driving up the value of it

Ryan Baird : I mean, I think there’s a there’s a lot of different Reasons why people own it In the u.s. You know, our central bank does a pretty good job of keeping inflation around 2 percent so You know, Americans have a harder time understanding bitcoin Versus people who are in emerging markets where there’s just runaway inflation When people see bitcoin they go, oh, wow, it’s really volatile, right? It’s really risky But it’s really reacting to global fiat currencies Which are volatile and when you have runaway inflation You know that is being priced into bitcoin And you know if you live in an area where there is runaway inflation I mean, are you gonna own gold or are you gonna own bitcoin?

What are you gonna do to protect yourself? From inflation and that’s really the great debate For me You know, I’ve been very skeptical of bitcoin, but no one’s hacked the network and it’s growing exponentially And that in itself I think is extremely valuable and I do believe in the future especially as Bitcoin becomes less volatile. I think it’ll just be used like cash However, right now until we get to that type of adoption. I think it’s mostly just going to be used as a store value

Anthony Codispoti : Let’s shift gears and maybe talk a little bit about some of your previous work Leica Lyka Tell me about this company and the exciting exit that you were a part of

Ryan Baird : Yeah, so um, I’m really passionate about Allowing people to own their own data Um 20 years ago when I was in college and people were talking about the internet There was this idea that everyone would own their own data And we would be able to monetize it And uh, you know, we wouldn’t need some kind of universal basic income because everyone would just be monetizing their data If we have robots doing all of our work the costs of a lot of things drop and you could literally just live off of your data so um We built a platform that is similar to instagram and we did a beta test in southeast asia And it did very very very well And but our our dream is to bring it to the us so um, we sold that code and we really want to um Either fund an entrepreneur that can bring something like this back or or to start it ourselves um, but the idea is that when you go on social media If you see an ad you should earn money from that ad that advertiser is paying to get your attention And yet facebook takes all of the money and doesn’t share it with you Even though in my opinion the advertiser is paying the person and right now You know, there’s no real incentive for you to put On your facebook, you know, where you’re from and what movies you like and all your preferences You know, what brands do you prefer because that’s your own profile?

Anthony Codispoti : Yeah, if you did that you would get better ads sort of tailored to you

Ryan Baird : So our idea is we can build a social network And we can allow The users to give us more data because they know they’re going to be compensated for the ads that they watch And that way we can send more targeted ads to people um Then other platforms and the idea is to give away 90 percent of the ad revenue We just keep 10 to run the platform and then one day we’d be able to monetize the wallet

Anthony Codispoti : And so this but this is correct me if i’m wrong, this is something that you built and then you exited to another company

Ryan Baird : Yeah, we we built it and did it in southeast asia And realized that we had to rewrite the whole code if we were going to do it in the us So we sold that off Um in southeast asia to another strong entrepreneur that we believe is going to be bringing it back Um But you know, we’re we’re looking to do something in the us

Anthony Codispoti : Gotcha Uh, tell me a little bit about how the family office that you’re with now

Ryan Baird : Yeah, so um hot does a lot of debt offerings and we can do really anything in the whole supply chain um Oftentimes we’ll find companies that you know just need better debt options And we can step in and hopefully help them We’ll also come into uh private equity acquisitions. They’re obviously acquiring cash flowing assets And uh, we find that we can help a lot of those gps Get the debt that they’re looking for

Anthony Codispoti : Um What else is it that you’re involved with here focus on risk? What is this?

Ryan Baird : Yeah, so focus on risk is our investment club that we started back in 2009 Um, I think I’d mentioned we started doing in events for investors. That’s the big thing that Uh separates us from other people And uh, we just had a barbecue this last saturday. That was a big success And we’re looking to do our next one on june 1st

Anthony Codispoti : So you guys have uh sort of um With uh barrett augustine you guys have successful and just you know yourself personally successfully managed a lot of high stakes Uh fundraising large large scale projects multiple times Um, what what do you think it is about either your personality or your mindset? That has been uh really crucial to kind of pushing your success forward. What makes ryan baird So

Ryan Baird : successful Honestly, I think it’s the focus on risk. That’s why I named the group that way. Um there’s a huge um Mistake that I see a lot of founders make over and over again and and it’s having these ridiculous conversations about how much money they’re gonna make The reality is is you can’t control your profit But you can control your risk so I’d much rather not have conversations about what color lamborghini someone’s gonna buy And talk more about the risks of the business that would prevent them from being successful and Having these honest conversations and removing these layers of risk Is really what helps these companies get to that next level And it’s just an intense focus on what is the biggest risk that is preventing us from moving this company forward And usually if you can figure that out and you can evangelize that to your advisors and board members and employees Everyone’s got their eye on the prize and you can remove that risk

Anthony Codispoti : So let me play devil’s advocate because I want to better understand your point here. You know, I’m a founder I’ve got a company. We’ve got forward momentum things are going well.

Of course. I can control my profit to some degree I’m gonna do the right kinds of advertising. I’m gonna form strategic partnerships We’re gonna listen to our clients and you know build the feature sets that they want Um, what what do you mean that I can’t control my profits? And where I really should be focusing my energy is on managing my risk

Ryan Baird : Well, if I told you to increase your profits to a billion dollars a year You wouldn’t be able to do that Without major reform to the business, right? So when I say you can’t control your profits, um It’s it’s that you can’t control that if you could 100 control them you would be a trillionaire, right?

Or whatever number is bigger than that Um, so instead of focusing on things that you can’t control. I’d much rather you focus on some details that could increase your profitability or it can increase your conversion rates or it could Open up your top of the funnel braider, right? Things that you can quantify And and really talk about are the things that we like to bring up when we’re talking to clients

Anthony Codispoti : So you mean getting more into the details not just saying I want to make 50 million dollars this year so I can buy a green lambo. It’s more of Well, okay, if 50 million dollars is your target number What are the steps that we have to achieve before that? We’ve got to make the funnel a lot wider So we get more folks in we’ve got to improve our conversion rates so that the funnel doesn’t look quite so narrow at the bottom It’s a little bit wider.

You’re just talking about sort of Focusing more attention on each of those individual in between steps Exactly. Gotcha Okay, let’s shift gears for a moment ryan because I you know successful guy you’ve been involved in lots of different cool ventures So many interesting things going on now I think it’d be really helpful for folks if they could hear a serious challenge that you’ve overcome in your life What was that whether it was personal or professional? How’d you get through it? And what did you learn coming out the other side?

Ryan Baird : Yeah, so um when fundraising for my previous startup I mean we talked to every single vc on the planet that I can get in front of and they literally all said no um, and you know, there’s a moment in a startup’s life where you’re kind of too early for investors but you also need money in order to move forward and without Being able to raise that capital you’re kind of dead in the water and this happens to you know a countless number of startups and you know we we were faced with really tough choices during that time period and The way that we got out of it is we just tried to communicate as much as we possibly could to people that would listen to us our advisors And we started telling them where we’re gonna be Where we think we’re gonna be in three months to six months and every time that we would do that We would really sandbag those expectations If we knew we were gonna have one, you know blogger write about us We would let them know that and then we would do everything in our power to try to get another blogger to pick us up And when we came to our quarterly reviews, it was hey, remember we thought we were gonna get this You know one piece of earned media well, we got two of them Remember when we said we thought we were gonna have 100,000 users well, we have 150,000 users So we were constantly under promising and over delivering Because we wanted to build that rapport with the people that were working with us And by doing that we were able to get some angel checks Because they were able to follow our progress and see that we were beating our own expectations And after doing that for a couple of quarters those angel checks Gained even more confidence in seeing us execute and eventually You know, we had raised from over 300 angel investors, which I don’t recommend doing wow. That’s a lot of work But you know, we had to kiss a lot of frogs in order to find someone who would eventually fully believe in us and You know be the main anchor investor in the project so VCs aren’t the only investor in venture and You know vcs are very much looking The best ones are looking for pattern breakers, but most of them are looking at pattern recognition And you know, if you don’t have those numbers Um when you’re fundraising It’s going to be very difficult to raise from from vcs So I I really was fortunate that we got to meet some great angel investors that introduce us to family offices And then we were able to you know build rapport to them by You know letting them know where we thought we were going to be and then busting our ass to make sure that we were ahead of that um every time we had an update and You know, we raised all their money from family offices and angels And we didn’t go the vc route and I actually recommend that to a lot of people because You know vcs are very much looking at the returns in their fund and that doesn’t necessarily That’s not necessarily synergistic with your your business Where family offices are looking at their whole portfolio And if there’s synergies that’s oftentimes one reason why they’ll they’ll invest and to give their portfolio companies a strategic advantage over other companies

Anthony Codispoti : Oh, so a family office may decide to invest not only because they see maybe the profit potential of this company really becoming big But because oh that fits with another one of our investments over here. They could provide Some services to them that would really give them a leg up on their competition.

Ryan Baird : That’s correct. Yeah And another great thing about a lot of family offices is they don’t have this, you know, bizarre You know exit by year 10 kind of philosophy And I think giving founders the freedom to do what they want to do um Is is very valuable on people’s journey

Anthony Codispoti : and so uh going the route of a family office can really give The founder the entrepreneur a bit more flexibility In terms of the path forward and sort of the timeline for needing to be ready Absolutely. Yeah, and so it sounds like that was a big lesson. Uh, you know folks are listening to this in various stages of You know figuring out if they want to raise funds trying to raise funds and they’re like, oh, that that’s interesting That that’s a good piece of nugget. The other thing I heard you say is um Under promise over deliver So I’m rather than shooting for the moon and tell you we’re going to have a million followers by the end of the month be like We’re going to get to 100,000 followers by the end of the month and then when you contact them, you’re like, yeah, actually we’re at 170 and they’re like Oh That gets their attention. You’re not just blowing smoke You’re delivering and then some Yeah, that’s correct.

Ryan Baird : You know, I think Um founders need to understand uh the arena and um, you know as a family office or an investor, you’re constantly seeing Founders that are going to be failing And you’re constantly being thrown information That you don’t have any way to to really verify so A lot of investors are highly skeptical of everything That you tell them and you know, the best way to build rapport with them is to not lie to them and to be super open Honest and transparent if you need to raise capital, let them know that you are raising capital If you’re looking to get more earned media, let them know that you’re looking to get more earned media Um, same thing if you’re looking to expand your advisors and board members, you know Let people know that that you’re doing that put that out into the universe And then let them know what you are going to accomplish over the next month or the next quarter and You know those types of things need to be well thought out Because the last thing you want to do is tell them that you’re going to close three clients by the end of the quarter And they go, okay. Well, let me wait until the end of the quarter if he’s telling the truth I’ll invest if he’s not telling the truth. I’m going to pass You don’t want to get there and be like, ah, there’s they’re just not closed yet But we still have them as a prospect or whatever excuse it might be They don’t want to hear that they want to hear that you’re executing and that when you say you’re going to do something you’re going to get it done and um You know, I I have found Founders that under promise and over deliver and they have very successful fund raises And they have lots of investors that want to be on their cap table It’s the founders that are deceitful and are just um exaggerating And just straight up lying are the ones that really have The toughest time raising capital because they’re just a below average deal

Anthony Codispoti : How about for somebody that’s even earlier in the process? They’re like, I can’t even get somebody to take my call, ryan like what advice do you have for somebody in that position?

Ryan Baird : I mean If you’re somebody who can’t get any meetings and can’t get in front of people You’re probably not the right guy to start a startup um startups are extremely high risk And I would argue that 90 of the founders that start a startup Don’t have the personality type to to run a successful business. Maybe it’s good experience for them um But You know the best founders are able to pitch And as an investor you’re not looking at the pitch of oh if this person gives me a great pitch. I’m gonna invest It’s a lot deeper than that. I think if the person can pitch Can they pitch the business to get someone to leave their job at apple or google or?

One of the top tech companies to your startup for low pay and some equity You know, that’s a big pitch. Can this person actually do that if they can’t do that? Then they probably are gonna have tier two talent And you don’t want to be investing in tier two talent The other thing the other question you’re asking is can this person get earned media? Can they pitch their story and get into blogs or get into some podcasts or get into some media or Is this the kind of founder that’s gonna have to pay a pr team to get any kind of media? And that’s gonna be an additional cost on this business for the rest of their life That’s interesting.

Anthony Codispoti : So you kind of see this as almost a helpful filter if you can’t get a meeting If you can’t get some earned media If you can’t get some, you know Someone to leave apple or another relevant tech company to come join your team That probably says a bit about your personality your drive your ability to be able to sell this to all the people around you and your eco sphere And that’s a good indication that it’s not something that you want to put your dollars into

Ryan Baird : Absolutely Absolutely, it’s not just the pitch to raise capital. It’s the pitch to get Employees it’s the pitch to get media It’s the pitch to raise capital from other investors that we’re going to be trying to sell to You know, if if you have a great investor, I mean a great founder that can raise pre-seed money But can’t raise a money Then what’s the point? right, um so You know, some people think like pitching is overrated or whatever and I completely disagree I think the people that are charismatic that can get things done cheaper faster better um Those are the those are the horses you want to bet on

Anthony Codispoti : Yeah Ryan, I’ve just got one more question for you But before I ask it, I want to do a couple of things first of all I’m going to invite listeners to go ahead and hit the follow button on your favorite podcast app You want to get more great interviews like the one we’ve had here today with ryan baird from baird augustine Ryan, I also want to let people know The best way to get in touch with you or to follow your story. What would that be?

Ryan Baird : Yeah, they can look me up online our company website is baird augustine.com People can also look up focus on risk. We have a very active accredited investor group on facebook x and linkedin um And uh, we’re pretty public so if you can’t find me then We can teach you how to google

Anthony Codispoti : And who are the kinds of people that you would like to hear from?

Ryan Baird : Yeah, so we’re always looking to meet family offices and investors Really just so that we could understand their investment thesis Um, and then we’re always looking to meet founders that are either raising a hundred million dollars plus or have already had a hundred million Dollars plus exit. We believe that we can help them on their next venture That’s great.

Anthony Codispoti : Last question for you ryan. I usually like to ask people about you know what they’re sort of excited about in the future But we’ve kind of already had a chance to talk about that, you know ai space blockchain and web 3 um So let’s do something a little bit different if you and I were to reconnect in a year and you’re celebrating something What would you hope that one thing is?

Ryan Baird : Uh A year might be a little quick, but we definitely want to go ipo um We believe that We can also play in the bitcoin treasury space. Um, we’re super excited that we got our first bitcoin payment this week from a client and You know, we’re really well positioned to help funds and founders in the web 3 and blockchain space so hopefully By this time next year, we’ll have the plans to go public in about a year after that

Anthony Codispoti : Okay, so two years would be you think a reasonable time frame for that to take place there. That would be amazing. Yeah All right. Well, let’s keep in touch. We’ll do a follow-up episode Sounds good. Ryan. I want to be the first one to thank you for sharing both your time and your story with us today I really appreciate it Thank you. It was great being here Folks, that’s a wrap on another episode of the inspired stories podcast. Thanks for learning with us today