260 | Red Flags to Avoid to Get Funding with Pedro Sostre
Our guest this week on the pod is Pedro Sostre. Pedro is the CEO of Navigate Accelerator, a new kind of startup program that helps founders launch better, grow faster and raise smarter.
And a special thanks to members of the Awarepreneurs Community for sponsoring this episode!
Resources mentioned in this episode include:
Funding for Startups: Interview with Pedro Sostre, CEO of Navigate Accelerator
NOTE: While it’s not perfect, we offer this transcription by Otter.ai for those who are hearing impaired or who don’t find listening to a podcast enjoyable or possible.
SPEAKERS
Paul Zelizer, Pedro Sostre
Paul Zelizer 00:02
Hi, this is Paul Zelizer, and welcome to another episode of the Awarepreneurs podcast. This podcast is all about the intersection of three things, conscious business, social impact, and awareness practices. Each episode, I do a deep dive interview with a thought leader in this intersection. Someone who has market tested experience and is already transforming many lives. Before I introduce you to our guests, and our topic today, I have one request. If you could go over to Apple podcasts or whatever app you're listening to the show on, hit the subscribe button, do a review, it helps tremendously. Thanks so much for considering it. Today. I am thrilled to introduce you to Petro Sostre. And our topic today is Red Flags to Avoid to Get Funding. Pedro is the CEO of Navigate Accelerator, a new kind of startup program that helps founders launch better, grow faster, and raise smarter. Pedro, welcome to the show.
00:56
Hey, Paul, thanks for inviting me.
Paul Zelizer 00:58
You were just doing this last night, we were saying before we record you were at a pitch competition and saw some folks doing great and saw some folks maybe having some issues with those red flags is really fresh for you, isn't it?
Pedro Sostre 01:11
It is it is it's it's interesting when you see someone get up there and they have been coat. You know, the person who won it was a unanimous vote, you know, across all the judges. And then there were some who struggled a little bit and maybe we liked their business model. But things weren't being communicated and certainly hurts, sir, it's your ability to raise her to ability to win pitch competitions. And it's very fresh, very fresh for me.
Paul Zelizer 01:39
We're called to wear printers, and one of our core values as well being and especially in these times, boy, there's a lot going on in the world. And as people who are trying to make the world a better place, we're paying attention to those things. So when you think about your own well being, is there a practice or something you do to help you bring your most resilient self to work?
Pedro Sostre 02:05
I love the question. We it's interesting, because internally, our team is very much very much recognizes the importance of things like therapy, and a wellness routine. I don't think any of us really grew up with those sort of ideals. But we've learned over time. It's incredibly, incredibly difficult to be an entrepreneur, at every stage. At the early stages, it's difficult. And then people think well, once I raise, you know, my first million dollars, or my first $5 million, is gonna get easy, but it doesn't, it doesn't get any easier. Emotionally, it's still very, very difficult. So we're big fans of therapy. We know there's a lot of platforms out there now that try to make it a little bit easier to find a therapist and do it online. We love that. Also take advantage of meditation apps, things like comm. headspace, we, we were big fans of like finding the thing that appeals to you. You can always try some of these apps and see okay, does this really make an impact? Does it not? And find the one that works for you, and then stick with it. The other thing that I tend to do, and I think it works really well is having a maybe it sounds silly, because okay, how does this relate to wellness, but having a really good exercise routine, even if it means just you know, hopping on a treadmill for 20 minutes once every couple days, building consistency on that side of your life also helps to balance those, those sort of ebbs and flows on the entrepreneur, emotional cycle.
Paul Zelizer 03:46
You just like stole my top three, within the community mental health world for 15 years. That was my birth career. Huge fan of therapy. And I'm timing this podcast with Insight Timer. And then the last thing, your listener, you know, I'm a trail runner, and in the trail running, we're all we talk about running the crazy app, right? You know that that exercise certainly helps me find a little bit more of a centered place. So yeah, I like literally those are my top three. And I just wholeheartedly love what you said there. So thank you.
Pedro Sostre 04:21
Nice, nice. And look, I'll be honest, I do not like running. I do not like sitting still for meditation. And I do not like being vulnerable. So I don't do these things. Because I originally thought like, Oh, this is fun. Let me try this. But I've found they're just some of the most effective things once you kind of if you do have reservations about them, once you get over that hump. It just it just has such a transformational quality. Even if it's not something you you were naturally drawn to.
Paul Zelizer 04:53
Absolutely thanks for that paper. So as I was doing my research getting ready for this, I was looking at your LinkedIn profile and and your website but your LinkedIn profile says something that I thought was fascinating. You talk about democratizing acceleration. Do you want our listeners to understand like how you got into the accelerator space? And this passion you have for democratizing it? Like, what what do we need to know about your backstory of how you landed in that relationship with the acceleration space?
Pedro Sostre 05:26
Yeah, so I was an entrepreneur for 20 years, built several companies. And I managed to and I use this phrase, I managed to sort of claw my way into an exit in 2016. Part of that experience was a little bit of a, of a, maybe a business awakening. And, and people sort of people comment on this, because I had already built a company that was doing, you know, several million in revenue. I had built several companies, I had a couple of small exits. But it was through this process. It was nine years I started in 2008. Sold. And in 2016, I guess it's about by the ears. It was through this process that I realized how little I understood about not business, because you can be a spectacular business person and entrepreneur, but how little I understood about the world of investment, and what we kind of see in the news as the startup space and in companies raising millions of dollars and reaching these massive valuations. And basically, the world of venture capital in the world of startups that we think is the same as business, and it's absolutely not, that was a big realization for me being a business owner and an entrepreneur, and then realizing I don't actually understand how companies are getting to these 100 million dollar revenue rates and, you know, billion dollar valuations. And I don't understand what investors are looking for. And the frustration was that I had built this company over the course of nine years. And yes, I was approaching an exit, but it was, it was the order of magnitude was so much smaller than what I was seeing around me. And I don't like comparing, because that's also one of those things that hurts when we talk about, you know, the emotional stability of entrepreneurs. But I did feel like man, I could have spent the same amount of time building something much bigger if I knew, if somebody had, like, coached me through those early days, and really given me those tips. So I went through with the exit, we sold the company. And I really got passionate about helping other people build what I started calling, you know, legacy building companies, right companies that when you sell, it changes your whole family, you know, forever, right? It's, it's creates the wealth that ends up feeding down into your children and your grandchildren. And those things are possible. But you really need to understand what you're doing ahead of time. So I got very passionate about mentoring. I did that for a couple of years on my own, just individually. And I think the entrepreneur bug sort of got me again, where I was thinking, Man, I love that I'm doing this, it's great that I can help people. But it was like eight people at a time. Right? One person can only really mentor or advise eight people or 10 people successfully. So the wheels started turning on how to do this in a more scalable way. And that was sort of the birth of what we're doing now navigate.
Paul Zelizer 08:36
And before we get into this question of scaling and investment, I wanted to have an honest conversation vendor, like, when is it a right fit? Because I I'm gonna be I guess, opinionated here. I don't think every company or every entrepreneur, every idea needs a lot of investment and I think there are some that absolutely do and I love that the impact space we're seeing larger companies next week we go live with interview with one of the cofounders of Revolution Foods For instance, there are 1000 person company bringing very healthy, mostly organic food into communities and spaces mostly through the school districts and the funding of federal lunch programs into communities that were kids often families oftentimes don't have access to that kind of food so it's 1000 person company really big scale they keep growing and they would not have been there without the investment. And I am more in the direction I'm holding a book in my hands called company of one why staying small is the next best thing for business by Paul Jarvis. I'll put that in the show notes you know having impact through other means like this podcast and not growing 1000 person company and I've never taken an investment and and I've become more are neutral about what's cool, right for any one person and really just trying to help people get good data. So we're clearly going to talk about investment in just a second. But from your perspective, when is taking investment and scaling, a really good fit for a particular entrepreneur situation? And when is it not a good idea?
Pedro Sostre 10:24
I think it's a fantastic point that you're bringing up. The, the fact of the matter is, not everybody should be trying to build these venture, bankable companies. The important thing is that you understand what it is you're trying to build, and you don't try to apply what you're reading. And this is what I see all the time, somebody will come to me and they'll say, Oh, I read about this article. And they're doing this. And I think I should do that for my company. And then you have to sort of understand maybe what you're building isn't the same thing that they're building, right? And being able to differentiate between? Are you building a company that's seeking venture capital, and that will benefit from that capital? Or should you continue building like a fantastic small or medium sized business and by the way, small business doesn't doesn't mean small in the traditional sense, and a lot of people think I think there's like an SBA, Small Business Administration definition that it's like, you know, something under, I know, I'm gonna get this wrong, but 30 million or 40 million in revenue. So small, doesn't mean you're not making a ton of money, right, you can have a fantastic $10 million $15 million company. And that's a lot of money. That's a big, impactful company, it's, it's very important in your ecosystem, there's nothing wrong with that. But if you try to build that company, with the same mentality of what you read, in a case study, and how someone you know, on how Travis Kalanick, and his team built Uber, you're gonna make the wrong choices in those early stages. And at the same time, if you're trying to build a venture, bankable company, if you're trying to build the next Uber, or Netflix, or Amazon, or whatever, and you're using the same, sort of the same sort of financial choices, or the same ideas that that you see through small businesses, small medium businesses, you're also going to going to be hindered in your success. So it's really about understanding what you want to build. And I say that comes back down to vision to your initial question of, you know, how to, you know, what you're trying to build? You know, it depends where you want this to go, right, I start our whole framework for like a go to market strategy really starts with a vision of what are you trying to build, and then immediately sort of taking that vision and projecting it out 10 years, so where, you know, if you're able to build this, and it is what you want, give me some numbers, you know, 10 years from now, that indicates success for you. And then we start to reverse engineer because if that's the numbers you want to get to, you really only need to build a small, you know, small or medium business that gets to 8 million or 10 million a year. Or, you know, if that vision leads you to a place where your numbers are saying you need to build something much, much bigger in the range of billions, then okay, you're gonna start to have to use venture math and sort of those venture frameworks, when you decide how to build your business from a strategic perspective.
Paul Zelizer 13:29
Great. Thanks for that Pedro. So let's say I'm a listener, and I'm like, Alright, Pedram, amen. I've done that work, or I will do that work. And you know, go find some resources, there will be a link to the Navigate accelerator link. And there's blog, there's some great blog posts there to help you start to think about, okay, is this the direction I want to go? I'll put a link in the show notes. And I say, Yes, I'm ready. I want to go help me think about as a listener, how to what are some of those red flags and other words, what shouldn't I be doing? And then a follow up question would be okay, what do I do instead of
Pedro Sostre 14:04
that? Great. So do I go one at a time and
Paul Zelizer 14:08
start with our star with those red flags that's in our title, give us the red flag that perfect.
Pedro Sostre 14:13
So I've got some practical things. And then I've got some more like strategic things. I mean, the first thing I say is, you know, everybody likes to worry about this, creating a really beautiful pitch deck, right. Your pitch deck is, you know, a slide show a PowerPoint, Google slide presentation, that really spells out what you're trying to raise for right now. It's important that that looks nice, but I will say so many entrepreneurs and teams spend a lot of time making sure this thing looks pretty, they add slide transitions, they slowly add animations. None of that really helps. And in fact, it can be a red flag for an investor that if if they're looking at this animated view, beautifully designed pitch, maybe there's a chance the team isn't focusing on the right things. So I will say, don't use like animations in a pitch, you should make it look nice and professional and branded. But don't overdo it on the complexity in your pitch deck, it shouldn't be a very simple pitch deck, you know, maybe nine to 13 slides that are focused on very big words that are key points throughout the presentation. Don't do all the extra work on animations.
Paul Zelizer 15:32
So that's one red flag, don't over polish it. Don't spend too much time on the gluts. Spend some time on the protein, right? Yes. What else? What else do we need to not yet?
Pedro Sostre 15:42
Absolutely Red flag number two. And as you mentioned earlier, Paul, I was at a pitch night. Last night, we saw eight pitches, I think six of them made this next mistake is don't forget your audience. When you're pitching, you're pitching to investors. And the most common thing I see is founders are pitching as if the person they're talking to is a potential customer. And founders often think, Okay, if you know if I'm going to sell this, let me sell it, and I'm selling it to the cut and to the to the end user to the buyer, this creates a very interesting disconnect for the investor, because you need to understand and again, this is the number one mistake I see founders make is they're so excited about what they're building, right the product, they've created it conceptualize this product, maybe it's built, maybe it's in the middle of being built, maybe it's already in market, but the product becomes their thing. And they pitch the product as if they're selling the product to a customer. Now, an investor is probably not your customer, unless you happen to be building something that your target market is investors, and they would be the customer, then that's your one exception here. But almost 90, you know, almost all the time, 95% of the time, your customer is someone different than the investor. So what you should be selling the investor is the business opportunity, not the product, if you have more than I would say, three or four slides that are about your product, specifically, maybe screenshots that you've got to show the product, you got to show screenshots, you got it, you gotta give some context as to what you're building. But if half of your deck is product, the investors are going to tune out, because I will be honest, as an investor, and most of the investors I know, and this kind of takes entrepreneurs by surprise, we don't care about your product, we don't care what it looks like, we don't care, especially in that initial pitch, your product is completely irrelevant to us. What we want to know is, do you understand the market? And do you as a team, if it's a founding team have a unique insight into this problem in this market? And then how big is this market you're trying to solve? That's kind of number two? And then how do you make money, right, the way you're doing it, and what your product looks like, and all those beautiful screenshots and app screens that you put into the deck are fine, but almost irrelevant to me as an investor. So focusing too much on your product and selling it as if I'm your customer is not the right choice. Don't forget your audience. You're pitching a business opportunity. Show me how as an investor, if I'm giving you money, I'm gonna make that money back.
Paul Zelizer 18:33
All the business opportunity, not the product. That's so helpful Pedra Gray, any more red flags that you see mistakes you see, newer, yeah. Yeah, okay, go, I'll bring it I've
Pedro Sostre 18:48
got three more. Don't rush the presentation. Usually you're given. There's an unspoken timeframe, in a pitch, whether it's if you're doing a pitch night, usually they'll tell you, Hey, you got five minutes to pitch. But even in an investor presentation, there's an unspoken timeframe, right? Don't go on and your deck for 20 minutes, you've probably got eight minutes, or maybe 910 minutes to keep somebody's attention. So you, you want to time your presentation so that you're not rushing. And what I mean by this is, you're showing a pitch deck and you know, talking a lot about pitch decks. I know as entrepreneurs, we deal with those a lot. Think about the fact that you're putting your visual on the screen, and then you're gonna start talking through it right. Now, if there's especially if there's a lot of words on the on the slide, which hopefully there isn't, you want to target like, you know, 10 words on each slide 13 words maximum. But if there's, you know, even if there are 13 words on the slide, you want to put the slide up, and then you want to sort of pause for three seconds, right? It doesn't, it might feel long because you're nervous and you're in the middle of a pitch But the slide goes up, and you pause those three seconds, gives the investor a chance to look at the look at the slide process what it's saying. And now their full attention is back to you. If the slide goes on screen, and you're talking immediately, they're spending time trying to listen to what you're saying, and trying to read the screen and read the slide at the same time. And they can only do one of those. So they're probably going to ignore what you're saying from the first part of that slide. And then once they finish processing it in their mind, they're going to come back and listen to you. And now they've missed the first thing you said. The other thing is, when you're done on a slide, don't right away, jump to the other one, do the same pause right doesn't have to be three seconds, two seconds, gives them a chance to finalize what you've said, or ask a question if they have one. And then you go to the next the next slide. So don't rush through the slides. Because you have a timeframe and you're worried about you know, going over time, you know, plan it out, do pitch practice, so that, you know, your timing, and you have the time to pause in between those slides. That's my next red red flag.
Paul Zelizer 21:14
Oh, you got one or two more? Press two?
Pedro Sostre 21:17
Yep. Okay, two more. So, next, confidence and objectivity. So there are a lot of a lot of forward looking statements in your pitch deck, right? There's, there's a lot of things that you're hoping happened, there's a lot of things that you're thinking happen. And you need to convey those things. The issue is you have to convey them with confidence. So and so this is a 2.0, right? It's confidence and subjectivity. If you indicate a lack of confidence in your language, it will subconsciously translate to the investor. So if you say, we think this is going to change the industry, right, that little language of we think it introduces a lack of confidence. So it's better to say this will change the industry, you're already making a forward a forward looking statement, you're already making a projection as to what you believe is going to happen. You actually don't need to say we think because the fact that you're saying it already means it's what you think, but be it but some entrepreneurs have a very hard time being decisive and strong with the language. So when you come in and say this will change the industry, it removes that area of competence. So any words like we think should become we will write if you say we hope that should become we project. Because again, if you've built your company, and you've got projections, right, I want to know, this is what you're projecting to happen, not what you're hoping happens. Hope is probably the last word I want to hear as an investor coming from from a founder, because again, indicates like, Okay, this what you think might happen, but it might not this what you hope happens, but it might not. I already know it might not, don't make me even more concerned that now you have a concern on whether it will happen. And the other thing is subjectivity. Very common in our language is very, very common in the English language. You know, we'll say things like, Oh, our team has a lot of experience, right? A lot is a subjective word. It doesn't it means not, it means nothing really, from objectively, if you say something like our team has 18 years of experience, I understand what 18 years is, it's a quantifiable number that now has value to me. If you say our team has a lot of experience, I think either. So the first thing I always think and I'm giving you this as a traditional investor, because this is how most investors think. Anytime I hear our team has a lot of experience, I'm thinking they don't want to say the number, right, they're using a lot because they don't want to say four years of experience or two years of experience. I'm thinking the worst every investor as they're looking through the deck. This is a another insight into investors, they're not looking for a reason why they should fund you. They're looking for reasons not to fund you. So if you say our team has a lot of experience that's going to trigger a red flag this is okay. Probably not as experienced as, as I'd like them to be or they would have said the number, right. The other phrase I hear is things like we expect substantial revenue by year three. Again, substantial means nothing to me. If if you told me you know, you exist, substantial to you might mean $2 million in revenue by year three, which for me Isn't investing may or may not work, or it might mean $200 million by year three, which again, for me as an investor may or may not work, the fact that you didn't say what that was, and you use sort of a vague word, right? Substantial means either you don't know what that number is, or you're uncomfortable telling me what the number is. And again, both things are massive red flags, it seems so silly, that the difference between our team has a lot of experience and we accept spec substantial revenue by year three would completely kill a presentation and a pitch, but it absolutely well, as opposed to saying, our team has 18 years of experience, and we expect 9 million in revenue by year three, it changes the entire way, that investor looks at your pitch with just that little language change.
Paul Zelizer 25:48
I was putting myself in the shoes of an investor and imagining somebody saying we hope right, and I'm like, Oh, great. I'm gonna give you all this money, and you have your fingers crossed, that you're gonna be able to. Next, right, yeah. Yeah, I never quite thought about that way. So that was really helpful. It's silly, because it's a language
Pedro Sostre 26:07
thing. And yeah, of course, you you believe it. Otherwise, you wouldn't be investing your life. And oftentimes, like investors, or entrepreneurs are putting their life savings into this, they're putting their time into this. Of course, this is what they believe is going to happen. But using language that indicates a lack of confidence is betrays the entire thing. Yeah, totally. My last one, go ahead, you got one more, one more. Try not to try to show more than tell, it's very easy to create a slide that says, Our customers love us, right. But if you can actually show screenshots of emails, or Twitter posts, or Instagram posts from customers that show that they love you, it's way more powerful than saying it. It's, it's kind of like and I know there's a term for this, we'll, we'll actually go back to therapy for a minute. It's like sometimes your therapist wants to get you to a certain realization, but they won't give you the answer, right? Because and they're going to ask you some leading questions. In order for you to come up with this revelation on your own. It's an I don't know if you know the phrase for this, Bob. But it's like one of the strategies they use so that you by coming up with the answer on your own, it's more powerful for you individually. And you almost have to employ that same technique here where you don't want to have to tell an investor, you don't have to say it, or write it on your deck that our customers love us. What you want to do is show them some examples of what customers are saying, and you want them to think, oh, wow, their customers really love it. And the difference between showing something and letting the investor come to that conclusion, versus just saying it makes a huge difference in the energy that comes from the investors in a pitch. For example, you know, another example, you know, everybody says, oh, we have an easy to use app, right? First of all, I don't like the word easy, because every single company that I see always says one of their unique value propositions is easy. So you know, it's not like anybody's going out there and saying, We have a very difficult to use app, right? So don't use language that anybody else can claim, try to use things that are specific to what you're building. But on top of that, if you're saying we have an easy to use app, right, the investors get that sentence. It's a throwaway sentence. But if you show the screens of your app, and the investor looks at the screens, let them sort of come to that conclusion that says, oh, yeah, this looks like it's really easy to use, where you haven't said what you wanted to say, right? You didn't say it was easy to use. But you showed some screenshots or some images that indicate that it's easy to use, and you're letting them come to that conclusion than their own. It's so much more powerful in their mind that they've thought that in the, the way, you know, you're doing this well is the investor sometimes stops you and says, Oh, wow, it looks like your customers really love you. And you're like, that's exactly what I wanted to say on this slide without putting those words, you know, and they sort of echo what you want to say. So in as much as possible show without telling and let the investors come to those conclusions on their own.
Paul Zelizer 29:24
Such a great tip. So let's do this in a moment. I want to come back in a year how to navigate accelerator, you actually help entrepreneurs build these muscles, what your program looks like, who you work with, and all that great stuff. Before that, I want to take a quick break and hear a word from our sponsor. Do you have a business that's about making the world a better place and you want it to grow both in terms of your impact, helping more people and your income so you can live a good quality life? If so, I'd like to talk to you about some research. When scientists look at what actually contributes to human beings meeting their goals, the single biggest predictor, whether it's a wellness goal you want to get in better shape, or a business goal is what they call social support. In other words, a community of people that are on a similar journey that can both help you with strategies and tactics of how you can proceed given exactly where you are right now, as well as emotional support on the ride of growing a values based business. The word printers has a community like that, we call it the AWARE printers community in its hundreds of social entrepreneurs really generous, very knowledgeable. And this is exactly what we do with each other. If you'd like to get more information, you can go to a where printers.com forward slash community. And thank you to everybody in the AWARE printers community who helped sponsor this podcast. So bedroom on the second part of the show, we like to joke about putting on our entrepreneur glasses and unpacking the nuts and bolts of how the thing works. So if you look at navigate accelerator right now, through your social entrepreneur glasses, like who are you helping? How many people? Are you helping? How does it work? Like just give us like a sketch of like, what does it look like on the ground right here right now?
Pedro Sostre 31:21
Absolutely. So first of all, first of all talk about accelerators. In general, this, there's three types of accelerators. Typically, the first one are like the equity accelerators, meaning they you apply to the program, they often get lots of applications. And then they're going to select the eight or 12, or some number that's kind of defined in their cohort that they are going to accept into the program, they're going to give them a little bit of cash, they're going to take a little bit of equity. And then they give them access to sort of what I call the magic behind accelerators, which is giving people access to frameworks, giving them access to networks, so they can grow and then giving them access to capital, so they can continue to fund what they're doing. The the entry into that is very difficult, right, you've got to fill out an application, oftentimes, you're doing one or two phases or rounds of interviews. And if you can get in great. But again, we're looking at maybe 600, to 1000 applications, and maybe they accept, you know, eight companies or 12. Companies very difficult to get in. If you can't, you know, I encourage my founders, they should be applying to those, right? The Y Combinator is of the world, the Tech Stars of the world, src, great programs, if you can get in, go for it. Now, there's also paid accelerators, that's where we fall into where you, maybe you don't want to have to some of these do still have an application process because they do have cohorts. So you're still joining with a group of maybe 30 or 40 other entrepreneurs, and you're getting group sessions through some programming, and you pay to be part of that program. So it's a little easier to get into, a lot of them have a pretty hefty price tag, somewhere in the neighborhood of 6000, or up to 20,000, believe it or not. And, again, great programs, but not necessarily affordable by a lot of early stage companies. And then you got what I call sort of the charity accelerators. They're run, usually by nonprofits, they're funded by government. And it's the same process for entry where you do apply. And then, you know, their funding allows them to take maybe 20 companies, and you have to hope that you get in on those 20 companies. One of the big things that brought me to start navigate was, I felt like all three of these models were pretty inaccessible. I don't like the idea of closed networks. And what happens in some of these is that if you don't know the language, that they're speaking, in the sense of like things that we talked about today, I mean, these red flags, there's guys, there's probably, you know, 20 or 30 more that we could talk through, we wouldn't have enough time to put all that into into a show. If you don't know that language, it's almost impossible for you to get into these programs. And I've met entrepreneurs that, you know, they're telling me Look, I've applied to Y Combinator for the last four years in a row. But you know, this is the year and I know they're gonna take me this year and I once I get in, it's gonna, you know, then it's gonna make all my dreams come true. I hate for entrepreneurs to have to be subjected to someone else accepting them in order for their quote unquote, dreams to come true. I think it's not a place that we should be putting ourselves. I think, you know, when we go to the results of that and we start to look at the data on that side. It has created a massive inequity for for women and people of color. I mean, the statistics So a lot of people listening to the show probably already know them. But for those who don't, women who start, I believe it's like 52% of all companies raise less than 2% of all the venture capital that gets deployed in any given year. So imagine, you know, investors are doling out money, right. And it's not like, it's like the Oprah show, it's not like you get money, you get money, but they are being selective. The problem is, all of that money 98% of it is going to men. And that's a real problem, especially when you consider that oftentimes, the same criteria that investors use is the same criteria that a lot of these accelerators use. So if women aren't getting funded, they're also not getting into these accelerators. On top of that, people of color, the numbers are slightly better. But people of color altogether get less than 4%. So think about that. The entire venture capital world 100% of this venture capital world, right? 96% is going to, to white people, and 98% is going to men. So you've got a very, very tiny opportunity at this, you know, two and 4% of the spectrum for any women and any people of color to raise money. And it starts with the fact that there's gatekeepers for the support system, you because you can't get into these programs without passing this application. And meeting, what some program manager determines is the top eight or 12 people, you will never have access to learning the language that you need to pitch, utilizing the frameworks that help companies be more successful, or getting plugged into those networks that exist to get you more business growth and more funding. And that's, that was the problem that I felt like had to had to stop. And again, there are some paid accelerators exist. But I feel like with a with a, you know, 6000 8020 $1,000 price point, it also cuts out a lot of people who can't afford those price points. So that's where navigate came in. We do a couple of things differently, we can accept everyone. Now we do a little bit of guidance in the beginning to help founders and entrepreneurs determine if the fit is right for them. And some of that means okay, what are your goals? Where are you trying to go? What what does success look like for you? And then understanding, you know, does our program provide support, but in general, you know, we can accept almost all founders, the price, the price is much more accessible, it starts at $800. So I think it's a price point that most people, especially if you're trying to build a company, you've got to invest some money anyway. And then on top of that, we don't do group sessions, where you're going through, you know, what I call school, you know, startup school, there's a lot of good programs out there that do that. We meet entrepreneurs where they are. So it's one on one support, completely focused on your milestones, and what actions you need to take in order to grow your business to that next step. I
Paul Zelizer 38:06
love how you're doing one of the reasons we're here listeners, Pedro and I know each other from LinkedIn, we're relatively new connections. And I'm on LinkedIn one day, and I see this guy talking about, hey, I've got a founder, a woman of color, who's got this great business and needs some funding. And there was this whole conversation and I was like, Who is this person? And I want to talk to him, because we have we have that are talked about. We've had Yasmin Cruz for Nene from visible hands and other folks who have helped us understand this inequity in terms of startup funding. And I'll put some of the links of some great resources that have come up in other shows visible hands, and I fund women and black VCs and other great networks that are really addressing this. But yeah, I was like, This guy was like, on LinkedIn, and like looking for funding for a fabulous founder of color, a woman founder of color. And I want to talk to this guy, and here we are. So thanks for being up for that. Thanks for doing that. And listeners, please help continue this conversation. How do we get more resources into the hands of founders of color and women founders and thanks for being somebody who cares about that conversation, Petros? So appreciate it. Absolutely. So okay, so great. So that makes sense. If I'm a listener, okay, I get it. I get what you're doing what you mean by democratizing acceleration. So like, if I go through the program, like give me a little bit better sounds like how might it work? What kind of things happen when founders go through your program? What do you what are some of the outcomes you see?
Pedro Sostre 39:39
Actually, if I can, I'm gonna mention, I meant to say this earlier, there's one more red flags that I didn't talk about. Totally. That's. It's using like these buzzwords, these industry buzzwords. So democratising happens to be one of these industry buzzwords that I tell people to stop using.
Paul Zelizer 39:57
should I should I throw you off the podcast now turn off right as we zoom,
Pedro Sostre 40:01
super hypocritical, because it is the thing we say, but it shows like not all of these rules are hard and fast. And I'll give you the story as to why we use that because I, I was very much like, we are not going to use that word democratizing synergizing. Like all these like industry buzzwords, it's just become like jargon. And we actually had Google for startups. By the way, if you're doing a startup, try to, you know, find a way to plug into the Google for startups program, I've gotten a chance to meet those people. They are some of the most authentic individuals, you know, even outside of what they're doing at Google. They just really believe in the space, Google's done a great job hiring that team. And they're fantastic teams. It was in a conversation with somebody from Google for startups. And I explained what we do, and he said, Oh, so you're you're democratizing access to acceleration. And I was like, I hate to use that word. But he was like, No, you have to use that word, because it's, it's just so appropriate. And I think it since we started using it, and we started sort of breaking that rule, people understand what we're doing more. So I will say, you know, I brought that up to say, look, all of these rules are guidelines, you know, to kind of get you to, but you want to listen to what your audience is saying, listen to what other people are saying, Do your pitch over and over and over again. Because you will learn throughout that process that it's important to know the rules, but only by going through the process of pitch practice and talking to everybody about your idea whether you think they're interested or not. You're gonna get these tidbits of information that make it so much stronger. So there's always a time to break the rules. And we're breaking our own rule by with our tagline of democratizing access to acceleration.
Paul Zelizer 41:47
I have to agree. And it totally made sense to me that language down like, Yup, yeah, they are democratizing, accelerate because some of the problems that you're naming in the space, you said, before we hit the recording, I wrote this down, I just want to say it out loud listeners headrow said, Nobody teaches you these things. In other words, how to get access to funding and you know, pitch your startup in the ways that we're talking about effective ways and actually get funding. Nobody teaches you these things unless you grew up in their world. And I was like, Oh my gosh, yeah, so democratizing Excel acceleration and the startup ecosystem and helping people who might like you were doing on LinkedIn, like, that's such an example of like, I don't see most people using their LinkedIn profiles that way. And it just was like, Oh, this guy is doing that. And I want to help tell that story. So I'm with Google for startups, I hear you and don't everybody rush out to start democratizing everything if it doesn't have a lot of substance. But like, it makes sense to me why, like, I've seen you do it, you've told us how you're doing it. And I think you are democratizing acceleration in the startup world. So I'm with Google for startups.
Pedro Sostre 43:05
And then I'll go back to your question on how does it work. So when, when a founder comes into the program, they go through an initial interview, and in that interview, we learn about what you're building, we share a little bit about, you know, how our program works, but primarily, we're looking for, you know, is there a way we can help out the on the back end of our of our platform of our program, whatever you call it, it kind of lies a marketplace platform, right? So we're connecting with advisors, who are already sort of mentoring and advising through a lot of these programs we talked about, right? We talked about TechStars. We talked about endeavor, we talked about Babson, we talked about new chip, all of those programs already use advisors and mentors. I don't say it's a dirty little secret, because I don't think it's too much of a secret. But some people aren't aware of this, that all those programs, use volunteer mentors and volunteer advisors. So even even some of the paid accelerators where you're paying, you know, your $6,000 or $8,000 to get in. They're relying on volunteer mentors to come in and kind of donate their time for to you. I didn't know that was the case. Me. I knew there were some, but didn't realize that the whole industry utilizes volunteer mentors. So as far as I know, we are the only or one of the few programs that actually pays our advisors to work with the startups that they work with. So on the back end, we've got a pool of third party advisors. These are builders. These are CTOs. These are like Forbes 40 under 40. Mit graduating like the roster is pretty impressive. If I do say so myself, people who are way more qualified than me. People who have exits and they love working with startups, it's usually not their full time job, right? They've either they might actively be working on a startup They might have, you know, a C suite role somewhere else. But they, they work with stars because they love it. And so they've been volunteering through these other programs, they realize that our program sort of brings a little bit of structure to that and a little bit of payment for them. And I think they like more so than, you know, the amount of money. There's an accountability there, right, they know that the founder is paying to be part of this program, and the founder knows they're being paid. And that token sort of creates a different type of engagement, right? When you're volunteering your time, you can have the best intentions in the world, and you're going to do a great job. But the other aspect of our program is the advisors are dedicated to you. So you meet with the same person every week, for as long as you're part of the program. If you're volunteering your time, once or twice, that's fine. But you're not going to volunteer your time to work with the same person every single week, for nine months, or however long they decided to stay in the program. So we do tie a little bit of financial incentive there as well. And what we're looking for in that initial interview is, does one of this pool of advisors we have bring value to that founder at the stage that they are right now. I will say, very, very rarely do we say no, you know, but but it is individual, there's a couple of areas that become very difficult for us, I think, you know, the cannabis space is a little bit difficult, just because the laws in every different region are different. So I, you know, if you're building a cannabis company in New York, and I have somebody who maybe has experienced in the cannabis industry in Denver, there, they're not going to have the same knowledge that they need in order to help you launch that program in New York, for example. So that space creates an interesting dilemma, with all the different laws and all the changing laws, that it's hard for us sometimes to find an advisor. But for most businesses, you know, ecommerce, consumer apps marketplaces, we can almost always find an advisor who's, you know, built a company in that space or exited a company in that space, and they can bring you value. And then once you get paired with an advisor, and I kind of spoke about this a little bit earlier, is you get a day and a time every week that you two are going to meet virtually on Zoom, or Google meet or whatever platform. And that meeting is where the first meeting you define those milestones. And then every week, it's really like defining, okay, entrepreneurs have a million things to do at any given time, right? But what are the three things that you really need to get done this week to lead to that milestone? Now, that milestone is not going to represent everything you need to do in your company, right? You've got sales, you've got fundraising, you've got team building, you've got all these different components. But through this engagement, you're defining what is the most important milestone, right? And then what are the three most important tasks you need to do this week to reach to make progress towards that 30 Day milestone or 60 Day milestone, and then that process, just rinse and repeats every single week? Right? So the next week, maybe you've got all three things done? Great. Let's focus on what what are the defining the next three things? Or, Hey, I got two of these things done. But I sort of ran into a problem with this one. Okay, perfect. Let's work on tackling that together. You know, how can your advisor help? Or maybe, maybe, hey, we can kind of forget about that one and move on to something else, because maybe that one isn't critical. So it's this weekly process of accountability of building very deliberately and being 100% focused on these milestones that creates what I feel is like this outsized success that companies in our program have.
Paul Zelizer 48:42
So when you look ahead, you've been doing this now you said, your egg that was in 2016. When did you launch navigate accelerator?
Pedro Sostre 48:50
We also have a seller in 2020 2020.
Paul Zelizer 48:53
Okay, so we're doing this now for two and a half going on three years, like when you look ahead, three years from now, five years from now, where do you want navigate accelerator to be? And how do you want to grow the impact that you're having?
Pedro Sostre 49:09
My goal is to become the largest early stage accelerator in the world. Right now, I think that number is hovering around 5000 companies. So if we can cross 5000 companies, I have to check to see how how the industry is doing. But I think that's that's probably the number. And that's not a vanity metric. It's not a it's an ego metric. Once you build the bigger you build, the stronger this network becomes, right? The bigger the pool of advisors, the bigger the pool of founders, the easier it is to find those connections across different founders and advisors that now create even more powerful growth for everyone. So we want to build the biggest program so that we can connect even more founders and even more advisors and they can kind of start collaborating amongst each other to build e In bigger successes, and I also think, and this is even more exciting for me, I think we are pioneering a little bit of change in this space that is going to trickle into the other platforms. And again, if it could be easier to get access to, to what we see an acceleration is the benefits, right access to capital, access to these networks, access to frameworks, if we can make that easier across the board, I'm not going to complain about getting more and more competitors over time, I'd love for some of the existing platforms to adopt some of this mentality. And instead of rejecting, you know, 96% of companies that apply, find a way that you can support those those companies, right? How, how can we create programs that don't cut out 96% of people, and rather, open it up so that anybody who wants to start a company has a fair shot at success? And I think that's that driving vision behind what we're doing is how do we give everybody a fair chance, we know not every startup is going to succeed. But if you're building a company, and you don't have access to networks and capital and frameworks, you don't really have a fair chance at winning, which is why 90% of companies fail, right? So I'd love for that to trickle down into all the programs, and create a world where it's not so hard to get access to this, these these success features.
Paul Zelizer 51:28
May it be so Petro and thank you so much for your passion for democratizing and helping especially more diverse founders succeed, I so appreciate your commitment to that and share that vision and that goal in the world. So after we hang up, I'm gonna say how can I help but I'll say it now. I want to help any way I can. And I think our audience is very much aligned with where you're going. So listeners, please reach out, go check out the Navigate accelerator site, the link will be in the show notes, go read the blog. And let's amplify and connect as we do as a community. So please tell your friends, let's connect and let's support let's do all the good things we do as an ecosystem.
Pedro Sostre 52:13
Paul, thanks for having me on. I love what you're doing with the podcast. And let's continue to kind of push on Oh, totally,
Paul Zelizer 52:18
totally. So yeah, before we go better, I know you're a busy guy. Our listeners are busy. So as we start to wind down if there was anything, you were hoping we were going to talk to you in this interview, and we haven't talked about it yet. Or there's something you'd like to leave our impact founders with as we start to say goodbye. What would that be?
Pedro Sostre 52:37
Find, especially if you're really in any space, I think whether it's a career, whether it's an entrepreneur, find, find mentors, find advisors. It's something I didn't do for the first 30 years of my life, and I regret it. Having someone that can help guide you, learning from their mistakes, instead of making the same mistakes. One of the most powerful things we can do, both in terms of our our emotional state, I think that's where Paul and I are saying therapy in terms of business in terms of career. Don't hesitate to reach out to people on LinkedIn on Twitter. Find that like tribe that's going to support you. It's one of the most important things you can do.
Paul Zelizer 53:17
Andrew, thank you so much for being on the show today and all the fabulous work you're doing. Thanks, Paul. listeners. That's all the time we have for today's show. Before we go, just a quick reminder, we love I mean, we love listener suggested topics and guests. If you have an idea, you can go to the AWARE printers website. Look at our contact page. And we have three simple guidelines. We try to be super transparent about what kind of stories we like to have on the show. So if you've got an idea, send it on it. Before we go, I want to just say thank you so much for listening. Please take really good care in these intense time. And thank you for all the positive impact that you're working for in our world.