TSP060 | Kim Kaselionis – Transcription

TSP061 | Angela Lee – Transcription
TSP059 | David A. Rosen – Transcription

John Livesay:

Welcome to The Successful Pitch podcast. Today’s guest is Kim Kaselionis. She has some great insights as to what it takes to be successful when you’re pitching. It includes practice, being confident. She said, “Confidence attracts investors. Being direct and thinking about some kind of exit strategy so the investors are going to see how they get their money back.” She also says, “You can convert your social capital into your venture capital,” and finally, she said, “Have stamina and determination to overcome life’s speed bumps.” Enjoy the episode.

 

Are you a founder struggling with your investor pitch? Do you need warm introductions to the right investors to get your startup funded? Do you need a funding road map to get you there fast? All of this and more can be found in Crack the Funding Code. Join host, John Livesay and Judy Robinett, bestselling author of How to Be a Power Connector and board member of Illuminate Ventures, on their free Crack the Funding Code webinar. Simply go to judyrobinett.com – that’s J-U-D-Y-R-O-B-I-N-E-T-T dot com – and click on the webinar tab to see how to tap into their network of investors from around the world. There’s a link in the show notes as well. You’re only one click away from getting funded fast.

 

Hi, and welcome to The Successful Pitch podcast. Today’s guest is Kim Kaselionis, who is the managing partner at Breakaway Funding in the San Francisco Bay Area. That’s the hub of everything. Kim has an amazing track record with so many awards, starting from the Marin Women’s Hall of Fame in business to Innovative Community Bank of the Year finalist to being one of the most — 150 most influential women in the Bay Area in 2012 and now, of course, she’s got her pulse on crowdfunding and is going to be speaking soon because she is an expert. So we are honored to have her on the show today. Kim, welcome.

Kimberly:

Good morning John, it’s great to be here with you today.

John:

That’s our pleasure. Kim, I always love to ask my guests to talk about how did you get to where you are, how did you get to be one of the 150 most influential women in business in the Bay Area and then get to do what you’re doing with Breakaway Funding. You know, back in the day – let’s go back all the way back to your days in college. I know you have a background in business and accounting but did you always have your sights set on getting into innovative ways of funding?

Kimberly:

Not even remotely. As you know, one of my first career was the CEO of circle bank and when I was in college, I thought, “God, could there be any more boring career than one in banking?” and, boy, I was proven wrong. I was really fortunate enough to have a mentor, my mother, who is an entrepreneur in her own right and very opportunistic. So they talked about, “Are entrepreneurs born or are they made?” and I think it’s little bit of both. So I think I benefit really a lot by having a mentor who was — you know, she’s a doer and a shaker.

John:

I love it. Well, what a great role model and how you’re, in turn, the role model for many people, male and female. So you were at the bank for so many years. What made you decide, “Okay, I’m going on to something new.”? That’s always a very pivotal point for people and fascinating to me of leaving this very successful career to change it up. What was the catalyst?

Kimberly:

Well, my dear, it was not my choice. So we’re privately held institution and our small ownership braid decided that they wanted to harvest their investment and, in 2012, as you well know, the capital market still had not quite recovered. So, we were fortunate enough to get into a bidding war on the sale of the institution. So, I decided not to stay with the acquirer and instead attended an economic conference at Sonoma State University where I was introduced in equity crowdfunding and I thought, “Well, equity crowdfunding sounds pretty cool and isn’t it brilliant for banks?”. So, Breakaway Funding was really born both from some pain that I’ve experienced as the CEO of the bank, right? Having a struggle to lend and the ever increasing difficult regulatory environment and small and medium sized business lack of access to capital. So the marrying of equity crowdfunding with traditional bank financing, I thought, “Well, got to do something with that.”

John:

Yes. Well, how great for the listeners to realize that, you know, you have modeled for everyone how to reinvent yourself. You don’t have to be Madonna to reinvent yourself. You can reinvent yourself in all kinds of careers and there’s nothing more successful, in my experience from watching successful entrepreneurs, than when they personally experience a problem and figure out a solution for it and then take that into market. It seems to me that that’s exactly what you did with that. So what was it like going from the president of the bank to launching Breakaway Funding? Were there a lot of lessons learned from the bank that you could take to Breakaway, or what was some surprises that you had?

Kimberly:

Well, I think that any entrepreneur will tell you that, it is challenging, exhausting, scary, exhilarating. As long you are involved in something that you’re passionate — I think the word passionate is a little overused. But, if you are really behind and engrossed and engaged in what you’re doing, you can pretty much just keep showing up every day. So what were the surprises? The surprises are it’s really invigorating to show up every day and I know that I only have to get through the next 24 hours and then I’ll have a chance to do it all again. So, it’s just having the stamina and determination to work through life’s speed bumps.

John:

Well, I like that. We’re going to tweet that out. “Have the stamina and determination to work through life’s speed bumps.” That’s very poetic. It’s really great. What are some of the speed bumps that you encountered that required extra determination?

Kimberly:

Well, how about the fact that my business model, my revenue model didn’t unfold the way that I thought it would.

John:

Yes, let’s hear more about that because you’re not the only one that has that challenge.

Kimberly:

Right. So, when I — you know, coming to this marketplace through the lens of the banker, I thought, “Well, of course, all bankers think like me.” I couldn’t be more wrong and so when I had initially developed my business plan and the revenue model, I thought, “Oh well, banks would love to pay me the subscription model to be their marketing arm or their marketing face to help them engage in crowdfunding.” Well, that didn’t materialize. Now I’m hoping it will be kind of my encore. So, one’s I’ve had some chime over the last 18 months. I spent a lot of time educating and meeting the community banks and some of the credit unions on their opportunity that equity crowdfunding presents to them. So, I’m hoping that I will be able to take my initial business plan piece to the revenue model and have it, maybe, as my third act.

John:

Nice. So how are you monetizing Breakaway Funding now?

Kimberly:

Well, that’s an interesting question. So, we have, as all good startups, a diversified revenue streams. So we really are doing a number of different things including some consulting to startups to help them get ready market and execute their crowdfunding campaigns to loan brokerage services. So, because of my Rolodex and my background in the banking industry, I can help companies access new banking relationships. So, we get paid for doing that. So, we’ve got a couple of different ways of that we divide our revenue and one of these days, I’m hoping I’m going to get paid for speaking.

John:

There you go. Well, let’s talk about both of those things: your speaking, which I know is coming up in Los Angeles. What is your topic going to be and how did they find you for this big event?

Kimberly:

Well, that’s fantastic. You know, well, the last question first. It’s really, really important, as you well know, to network, and whether that network is being involved in social channels, whether it’s LinkedIn or Twitter or Facebook that you are engaged and you’re open to creating new relationships and new friends. So that’s one way that you can have these opportunities unfold.

So, I was introduced to Victoria via LinkedIn and she is hosting – her company as Metropo Global, based out of L.A and they are holding the Fourth Annual Global Alternative Funding Event, as you’ve mentioned, November 7th or November 6th at the Century Plaza. So, it’s going to be a full day or will have been a full day of all things private equity, how to get it, who needs, and let’s work together to make it happen.

John:

And what is your topic going to be, specifically, within that world?

Kimberly:

So, I will be moderating an equity crowdfunding panel.

John:

Oh, how great. So you get to ask the questions like I’m asking you? I love it. You’d be on both sides of the table. Yes, moderating a panel is quite challenging because you try to give everybody equal time and are there certain questions that you know you already want to ask?

Kimberly:

Well, certainly. One of the questions — one of the first questions I’m going to ask – because it’s a theme that I run into and that is, what are the one or two challenges that you, the platforms, run into when working with companies that are trying to raise capital? So, what are some of the themes – the global themes that we’re encountering. So, tell me one.

The others I would say a lot having to do more with what’s the roadmap to a successful capital raise? So, everybody’s going to have their own viewpoint there and then I want to also talk about the various security’s exemptions that are available to both investors, right? Investors of all flavors as well as entrepreneurs through which they can raise capital or which they can invest and, hopefully by that time, the SCC will have ruled on the Title III, the classic crowdfunding legislation.

So, we’re really looking forward to opening up the capital channels, the flow of capital to fund innovation and job creation in this country and create new investment opportunities for everyone.

John:

What I really love about this whole concept of crowdfunding and equity funding is it used to be your choices were much more limited, right? It was either family and friends, and then some seed angels, and then, maybe if you’re successful, you got to series A. Now, with equity crowdfunding put into the mix, a lot of startups are using that as proof of concept that people are willing to pay and that helps them get angels, right?

Kimberly:

Right, so there are four different crowdfunding models and this is not a crowdfunding conversation but the rewards-based model is a great way for businesses to get a proof of concept to your point and not only that, but also to build a community and a following which they can use a springboard then and demonstrated success to actually launch an equity based raise.

John:

We were talking earlier about one of your questions is there’s a lot of global issues now going on so can you speak to that? What’s going on outside of the US and how does that impact us?

Kimberly:

Are you talking about the regulatory front or you talking about just economics?

John:

Just economics, in general. When you’re talking about the global challenges, one of the questions that you’re going to ask at the panel, I think I’ve noticed that the whole event is global-based so I just think it’s interesting for everybody to get a perspective of, typically, angels, for example. I only like to invest with people who are within 150 miles of where they live but now with equity and crowdfunding, that geographic stuff sort of goes away a little bit, doesn’t it?

Kimberly:

Indeed. So, one of the benefits, I think, of crowdfunding is that entrepreneurs and business owners can convert their social capital into financial capital and it is a way for them to get introduced or to reach out to people, prospective investors who are aligned, that the values of the investors are aligned with the mission of the company raising capital and you’re right. There are no geographic barriers that might limit that opportunity of getting those two groups together.

So, the US is – you may well know – is way behind the rest of the world as it relates to equity crowdfunding so we are delighted that SCC is finally coming to the table and as you also may note, 25 states, to date, have enacted their own intrastate crowdfunding rules. So, it is good that the SCC is finally coming to the table because we’re likely to have 50 different interpretations of equity crowdfunding.

John:

I love that line you said. We’re going to tweet that out. “Convert your social capital into your venture capital”. That’s great. That’s such a great way of looking at it too. I have never heard anybody say that so thank you, Kim. That is really wonderful. So, what does a typical day look like for you? I think people would be very interested to hear what it’s like running Breakaway Funding from consulting to speaking to being a loan broker. I’m specifically interested in the consulting aspect of it of how do you help people figure out if this is for them and, if so, how to use it?

Kimberly:

Well, you know, they have that saying. “You have to know the rules of engagement in order to play the game”.

John:

Yes.

Kimberly:

So, really, a lot of what we do here at Breakaway is an extension of what we did at Circle Bank and that is more education and consultative in nature. So, what we do with our clients is we really try to understand, holistically, what it is that they’re trying to achieve, what resources do they have, what gaps do they need to fill, and spend a lot of time with their community. You know, I have particular philosophy as it relates to equity crowdfunding and that is that the entrepreneur and the business owner really stand a greater possibility of raising the capital if they have a community and let me just give you a real quick example.

At Circle Bank in 1990, when the bank was originally established, a group of community members got together, said, “We want to have a bank in town. We don’t want to deal with the big guys.” So, they created a business plan so they could figure out where they were going to go and how much capital they needed to get there and, at that point, they needed 3 million dollars. Well, they all looked at each other and said, “Hey, who wants to write that 3 million dollar check?” Well, nobody, of course, right? So, they said, “Okay, everybody open your Rolodex.” So, the board went to the community. They went to their social network, their social capital, invited the community to become owners of the bank, thereby raising the financial capital, converting the social capital into financial capital and, as a bonus, they were able to generate some strategic capital because those very investors became the first customers of the bank and then they went on to become the brand of Angel List. So, this is really the beauty and the benefit of harvesting, mobilizing your tribe, your community, and your social capital. We’re really about engagement.

John:

Everytime I hear someone talk about their customers become their investors, that is just music to everybody’s ears because it really shows A, you have proof of concept, but B, more importantly, they love it so much that they want to invest in it because they see the potential. That really gets a lot of people to want to join your party, doesn’t it?

Kimberly:

It does indeed, and I like to say it gives them an opportunity to double-dip. If they’re going to buy from you or they’re going to sell to you and they get to, hopefully, enjoy in the value created for the company and the wealth that it’s created, then they have the opportunity to double-dip and why not?

John:

Love it. Do you have any other examples you can share with us of your experience of what you’re doing at Breakaway with clients?

Kimberly:

Absolutely. So, in July of this year and July of 2015, the Cadillac Bar and Grill 2.0 opened. So, in the 80s and 90s, Michael Rodriguez of the Cadillac Bar and Grill owned and operated the restaurant for 17 years south of Market Street in San Francisco. Very, very profitable, very successful company. Well, his landlord was the city of San Francisco. So, when the city decided to expand the Moscone Center, they did not renew his lease. So in 2012, Michael decided he wanted to bring the Cadillac back because, again, it was a destination, it was a hub for community engagement as where people went after work for a drink and for great authentic Mexican food.

So, he developed a business plan, he determined he needed X dollars to open up the restaurant and so through harvesting his own social capital and really looking at some of the other resources in the community – his skin in the game, his community, and a community bank in San Francisco Trans Pacific National Bank, we were able to aggregate the required resources so that he could open up the Cadillac 2.0. They opened, like I said, in August of this year and have been doing very, very successful.

So, it’s not only that but there is a — you know, crowdfunding, we talk about, it’s new and it’s really the way that companies have been capitalized for many, many reason. There’s a great story in Petaluma County. There’s a hotel fancy enough; it’s called the Petaluma Hotel. In the, I think, it was the late 1800s or early 1900s, that hotel was actually crowdfunded. 100 community members got together to raise the 300 thousand or 350 thousand dollars to construct the hotel. Now, why would they do that? Well, they probably want a place for their family members to come, a restaurant to go to, a bar to go to. So, by becoming the financial capital providers, they could also become the strategic capital providers because when Aunt March comes to town or Uncle John comes to town, where are they going to stay? They’re going to stay at the hotel.

John:

Yes. Well, this whole concept of what you’re doing at Breakaway Funding really seems to support the community in a big way and I know you’ve written some great blogs about the sense of caring and everything. Can you speak a little bit about this sense of community?

Kimberly:

Again, I’m just going to go back to, really, the foundation and really the mission of community banks, which is the lens through which I see the world and it’s about engaging for mutual benefit. We are no longer living in a time where I get to benefit at your expense. You’re smart enough, there are enough resources to go around. If we’re willing to think a little differently about how we can engage, we can create relationships for mutual benefit and, really, at the end of the day, that’s what the mission of most community banks is – you know, being an integral part of their community.

John:

Kim, do you have any advice for the listeners on how to pitch their story? Whether you’re going to a bank or engaging Breakaway Funding to help them craft a story that people are going to want to help — like, for the example of the restaurant with the Cadillac, do you have any tips on the importance of getting people emotionally engaged and sharing your vision?

Kimberly:

So, sure, lots of little tidbits for one, practice. Practice pitching. I know it seems a little bit awkward sometimes to practice but it really will help you in that, maybe, moment of terror. The other is confidence. Really, people are attracted to confidence so you really need to have confidence and conviction when you are speaking about it. Passion, of course, there’s that word again. You have to be committed. It has to come from you. People can tell if you’re not authentic with your story. Be direct, right? Be direct, be really clear about what problem you’re solving, what is your unique selling proposition, how are you different, what your market is to the extent that you’ve had an opportunity to engage in a rewards based crowdfunding. Raise, point that out, and then the exit. You know, a lot of times when businesses are thinking about their company launching or expanding and they’re thinking about the capital they raised, sometimes they forget how they’re going to get their investors out.

John:

Yes, especially in the cases of restaurant. He’s like, “Well, that’s going to stay there another 20 years, right?” or, “It’s going to be 20 years before I get my money back?” Not necessarily, right?

Kimberly:

Exactly, exactly. So, I would just say be confident, be authentic, practice, be direct, and figure how your — one or more ways to get your investors out. They will be very happy about that, that you thought about them.

John:

Yes, I love that concept of being direct. One of my favorite phrases is the confused mind always says no and I work with my clients all the time on this is not clear and if it’s not clear, you’re not going to get a yes. So you need to come out and say exactly what the problem is and what the solution is because when people understand that in a clear way, then they can decide whether it’s right for them. But if you confuse them, then they’re like, “I don’t know if I want to say yes or no because I don’t understand it,” and that one thing can make or break it, don’t you think?

Kimberly:

Indeed, and you’re exactly right.

John:

Yeah, it’s really great. Kim, obviously, you are so influential, and so committed, and so passionate. You clearly walk your talk. Are there any books that you would recommend about business or even about life that you think people, as entrepreneurs seeking funding, should be reading?

Kimberly:

Well, one book that comes to mind is Startup Seed Funding for the Rest of Us: How to Raise $1 Million for Your Startup – Even Outside of Silicon Valley. I think you can get it for $4.95 on Kindle. So that will be just some — you know, there are a lot of resources out there that entrepreneurs can flip through and on the lifestyle, I would just say, sometimes get a trashy novel and just disconnect, right? We do need time to reboot and it is absolutely, in my mind, okay to take a timeout from the real world.

John:

Well, there’s been all kinds of studies to support that that if you constantly focus, focus, focus and don’t take a break, you’re not more productive. You’re less productive so that “take time to reboot” will be the other tweet from the show. That’s fantastic. Kim, how can people follow you on social media, reach out to you for future speaking engagements, consulting, et cetera.

Kimberly:

Fantastic. Well, certainly, you can visit us at our website at breakawayfunding.com or follow us @breakingfund, that B-R-E-A-K-I-N-G-F-U-N-D. That’s kind of our Twitter handle. You can reach out to me on LinkedIn. Find me at Kim Kaselionis. So, any of those options or you can call me: 415-729-9482. 415-729-9482.

John:

Great, and your own personal Twitter handle where can people follow you is just @kimkaselionis, yes?

Kimberly:

Indeed. Thank you.

John:

Nice. Well, it’s been a pleasure hearing from you and your expertise. I know you’re going to knock them dead moderating this panel and we look forward to seeing future speeches that you are going to get paid for.

Kimberly:

Well, I appreciate that and, John, it’s really — what a great service that you’re providing all of your listeners. You know, little tools of the trade and little tips that help them become even more efficient in what they’re trying to do. So, thank you for that.

John:

Thanks. My pleasure. It’s my personal passion. I love helping founders get their pitch really focused. Thanks again, Kim. It’s been a pleasure having you on the show.

Kimberly:

Thank you, John.

John:

Thanks for listening to The Successful Pitch Podcast. If you like the show, please go to iTunes and write a review and encourage your friends to write reviews too. It really helps get the word out. You know, people say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest but when it comes time to write the check, they don’t do it. So how do you get people to say yes and then follow through? Visualize yourself on the left side of a riverbank and you have to cross the river and on the other side of the river is where the funding happens.

So, first, you make up your idea and then you make it real and then you make it reoccur. Once you start dipping your toe into the water to get to funding, that’s where I can help. I get you across that river faster than you would on your own with a lot less frustration that you will get when you hear a bunch of no’s and you don’t know why. So, if you want some help getting funded faster with less frustration, go to my free funding webinar, sellingsecretsforfunding.com/webinar and sign up and get in depth information on how you can get funded fast. Thanks.

TSP061 | Angela Lee – Transcription
TSP059 | David A. Rosen – Transcription
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