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The Future of Investing: Key Insights from the SXSW Panel

At the SXSW panel, The Future of Investing, industry leaders shared insights on how technology, funding strategies, and founder characteristics shape investment trends. Featuring insights from William Derrick (Creci Ventures), Anthony Rose (SeedLegals), and Scott Hansen (Maverick Brands), the conversation offered a forward-looking view of how founders can successfully navigate evolving capital markets.

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Key Themes Shaping the Future of Investing

The panellists emphasized three core themes for founders navigating today’s investment landscape:

• AI’s Growing Role in Efficiency: While AI has created powerful opportunities for startups to reduce operational costs and improve efficiency, founders must apply AI meaningfully rather than relying on it as a superficial selling point.
• Crowdfunding as a Strategic Funding Tool: Retail capital has emerged as a viable alternative to VC funding, enabling founders to maintain greater control while building a community of brand advocates.
• Founder Resilience and Storytelling: Investors are drawn to founders who demonstrate grit, a clear vision, and the ability to craft compelling narratives that inspire confidence

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The Future of Investing: Embracing Innovation and Adaptability

The panellists agreed that the future of investing is increasingly shaped by rapid advancements in technology and changing approaches to capital formation. While AI and automation drive efficiency for startups, there’s a growing shift toward democratizing investment opportunities through crowdfunding and retail capital models.

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The AI Evolution in Investing

AI continues to reshape the investment landscape, both as a business opportunity and as a tool for improving startup efficiency. William Derrick highlighted that 50% of VC funding last year went to AI-driven companies, emphasizing the sector's momentum. However, he cautioned that while AI is powerful, founders should be wary of relying on it as a superficial addition to their pitch:

"It can almost be a detractor. If AI isn’t core to the business model, it may feel like a distraction."

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Anthony Rose echoed this, emphasizing AI’s potential to reduce operational friction for founders. By automating repetitive administrative tasks, AI can enable founders to focus more on product development. However, Rose warned against over-reliance:

"Founders need to know when AI should enhance—not replace—the human touch."

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For founders, the key takeaway was clear: leveraging AI to improve efficiency is valuable, but claiming AI as a core differentiator without meaningful integration could undermine investor confidence.

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The Changing Capital Landscape

The conversation also explored shifts in capital formation, with a focus on crowdfunding’s rise as a viable alternative to traditional VC funding. Scott Hansen reflected on his experience raising retail capital for Island Brands:

"We had 9,000 investors support our company. They became our biggest champions, and that grassroots energy was a huge asset."

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This demonstrated how retail investors can offer more than just funding—they provide a built-in community of supporters and brand ambassadors. While retail capital was once seen as a fallback for startups that couldn’t secure VC backing, panellists argued that it now serves as a strategic growth tool.

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William Derrick noted that retail capital fills a critical gap in funding opportunities:

"VCs are looking for home runs, but retail capital allows founders to build on their own terms."

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However, panellists stressed that founders need to clearly define boundaries when engaging retail investors. While building a community of supporters can be powerful, companies must establish clear decision-making structures to avoid operational challenges.

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Founder Fundamentals and Storytelling

Despite the evolving investment landscape, panellists agreed that one factor remains constant: the strength of a founder is often the biggest predictor of success. Derrick emphasized the importance of resilience and grit:

"We assess founders heavily. We look for grit, resilience, and the ability to navigate challenges."

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Equally important is a founder’s ability to craft a compelling narrative. Anthony Rose stressed that storytelling is what draws investors in and inspires confidence:

"Your pitch isn’t just about facts. It’s about crafting a compelling narrative that makes investors want to join you on the journey."

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He shared a key insight from a legal pitch coach:

"Cases are hardly ever won or lost on the facts—it’s always the storytelling."

Founders who develop strong communication skills and clearly articulate their vision are more likely to connect with investors and inspire belief in their business.

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Looking Ahead: The Future of Fundraising

Panelists predicted that the future of fundraising will involve a blend of traditional VC models, retail capital, and emerging technologies like blockchain. Scott Hansen expressed optimism about tokenization creating liquidity for startups, while Derrick envisioned a future where crowd-funded VC-style funds could expand investment opportunities:

"We’re moving toward a world where the lines between traditional and retail capital blur. Founders who build strong communities will be the ones best positioned to thrive."

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Key Takeaways for Founders

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• Leverage AI to reduce friction in operational tasks, but avoid overselling it as a core differentiator unless it truly is.
• Explore alternative funding models like retail capital to build on your own terms.
• Prioritize founder resilience and storytelling—investors back strong leaders with clear visions.

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As the investment landscape continues to shift, founders who embrace innovation, authenticity, and adaptability will be best positioned to succeed.

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Transcript

Jon Stidd: Welcome to future investing. I'm excited to be on here with these three panelists. We've spent the morning talking about cleantech, going into the startup showcase in that last round. So founders talking about the nitty gritty of their business and running that in the day today. This next panel is gonna focus on the future and be very forward looking.

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We're lucky to have three very different panelists in terms of the industries that they're in. So we'll get kicked off and talk about the future of investing. So I wanna start with Will. Guys, just go around, introduce yourselves, give a little sort of elevator pitch and, maybe share a little bit about your position on the future of investing, just like where you guys see it as a VC fund, that sort of thing, and then we'll get into some round table questions. Yeah.

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William Derrick: Good afternoon. I'm Will Derek. I'm currently working for a company called Creci Ventures. We do generalist, seed stage investing and, from Austin. And I think that for our business, one of the most impactful things in the past, like, two years has been AI.

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You know, it's extremely hyped right now. We're seeing, last year, 50% of all VC money went to AI companies. And so what we think about a lot is, like, kinda how that's gonna land and what companies will end up being winners from that and what companies won't be, and then kind of how that will change the landscape of our investing going forward. Thank you. Yeah.

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We're gonna dive into all that.

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Anthony Rose: Alright. Hey. I'm Anthony. I'm, CEO and founder at SeedLegals.

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We're a 60 person company based in London, now in New York, and it's a legal tech platform. So if you're a start up founder, instead of paying huge amounts of money to lawyers, you'd get on our platform and do everything to get investment ready, to save, cap table, and a price round for a lot less. About 50,000 startups in The UK are on our platform. So I talked to thousands of founders and, like, more than half of all UK companies on the platform, and I'm looking to change that in The US. But because I talked to so many founders, I'm not here to pitch SeedLegals.

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I'm here to share the learnings I've got so you get there faster. And maybe the kickoff point from my side is that the standard problem is, founders going to VCs too early, and VCs say, I love what you're doing. Come back later, and you should be going to angels earlier. And I'm sure we'll get into a robust discussion on that. Right on.

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Scott Hanson: Thanks, Anthony. My name is Scott Hanson. I'm the former founder and CEO of a company called Island Brands, which I sold to private equity about a year ago. Have since started a company called Maverick Brands, which helps start ups and growth stage companies raise capital, online through equity crowdfunding, Reg CF and Reg A+. In our personal journey, as a founder, we raised $30,000,000, which helped scale, island brands, and seven of that was, on through Reg CF.

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We were pioneers in space, back in 2018, 2019, And, now we are spending all of our time evangelizing, how great this ecosystem is, and how dynamic it is, as we trudge into the future.

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Jon Stidd: Right on. Well, thanks for teasing me. These intro questions, we're gonna focus on the future. Anthony, I wanna start with you, both in terms of The UK, perhaps being a little bit more forward looking in some of the legislative landscape.

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Right? But also in your experience applying tech to solve these problems and remove friction. Right? When you look forward to the space, right, where do you see technology and, you know, please talk about sea legals as well. Right?

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Eliminating friction is it, you know, are you excited about technology applications? Is it mostly AI? Is it the combination of those two? Tell us what you're excited about in your domain as you look forward.

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Anthony Rose: So I used to think The UK was super liberal, and then I started reading Twitter, and I see, you know, Elon saying it's Europe's backward.

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I've gotta take issue with that. You know, in our day to day life, there's zero friction from government, from legal in building our business. What I've observed in The UK, there's a very forward looking legal infrastructure. We don't have to be a law firm. We can offer legal advice.

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In the US, it's a bit more difficult. The US also has got lots of states to keep things more interesting. Right? So it's not just one country. You have to pick which state you're gonna incorporate in.

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But what you want as a founder is you want to spend as close to 100% of your time building a product because that's the only thing that's gonna make you win. And all the time you spend on admin stuff, be it taxes, legals, accounting, whatever, you want to minimize. And so that's what our goal is. And what we've seen is, you know, my hypothesis is fundraising is kind of broken because you go to a lawyer and they create a Word document, and they send it to another lawyer with a Word document, and they go backwards and forwards and charge you $600 an hour to create and at the end, statistically, you're gonna close at exactly the same place as you kind of started because funding rounds, when you do a lot of them, you see, certainly in the early stages, they're very formulaic. You're raising 1 mil on a 5 mil post money cap safe and so on.

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And at this stage, the investor's gonna get a board seat. At this stage, they're not. And if you're doing a CF crowd round, no one's gonna get a board seat. So what we've seen over thousands of rounds is the standard patterns, and my goal is now to automate that. And, of course, you know, law firms have never wanted to change what they're doing, but now AI is forcing them to rethink that.

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And so, you know, one of the things we're gonna cover here today is how much AI do you have to be to be taken seriously as AI and at what point will it be a negative in your pitch deck mentioning AI or not?

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Jon Stidd: Right on. Anthony, thanks for that. It reminds me of a tidbit I heard recently. If it weren't for lawyers, we wouldn't need lawyers.

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So, appreciate the problems that you're solving out there for that, taking friction out of the process. Will, for you, right, so you mentioned AI and what you all are seeing. Anthony touched on it a little bit, you know, using technology to, you know, make things move faster for founders so they can focus on building the product. For you all, I can imagine you're looking at AI both as an investment opportunity and also something that helps with OPEX internally as companies leverage AI. Share a little bit about that with us on either side of that coin.

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William Derrick: Yeah. So we're seeing, like, startups are able to be, like, do more with less. Right? If you have a Sharp guy as your CTO, he can leverage AI to be much more efficient in this day and age than it used to be. It used to be teams of engineers creating software products, and now it can be much smaller teams.

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And from a CapEx, you know, perspective, that's pretty attractive, and it kind of changes the need for funding. In terms of investing, we, you know, our fund doesn't look heavily at AI. We're generalists. And sort of to piggyback off Anthony's comment, it can almost be a detractor if a company that we don't think of where AI has a core, portion of the business or product. It almost sounds like a distraction or something that they're putting in there to sound very sexy when at the end of the day they might not be that sexy.

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So I guess maybe that answers the question.

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Jon Stidd: It certainly does. Thank you. Scott, for you, so you've been on both sides. Right?

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So you've raised capital. Now you work with founders helping them raise capital, deploy that capital. Have you seen shifts in space recently? Was it brought about by AI? Was it brought about by, you know, the VC funding crunch that, you know, came out of these really high valuations that we saw?

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Just share a little bit about your experience and what you're seeing.

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Scott Hansen: Yeah. I think the evolution of technology has obviously changed how we raise capital online. The proliferation of, you know, more structured walled gardens in, whether it's Meta, LinkedIn, YouTube, those dollars that we spend, are typically harder earned in those walled gardens. So getting outside of those channels where we're actually finding more success in nurturing the communities that we're working with.

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You know, it's become more challenging, but it's also exciting because it's evolving to a place where I think we'll end up seeing some really exciting things in the future, including a lot of liquidity on blockchain.

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Anthony Rose: Can I hop in with the Oh, please. Two things. So, you know, with AI in in your business, I think there's sort of two areas that you might use it. One of them is for coding, and the other one is for outreach, customer support, and so on.

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So let me talk about these for a second. So I'd love to know from the audience who's using Cursor AI or one of the others for coding enhancement. Alright. So a couple. So I'm always wondering, you know, my team is I've got, you know, a great dev team, but I have to, like, push them with a stick to use more AI.

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And, I keep wondering whether when I look on Twitter, it's like, oh my god. I could have built my entire platform in a weekend instead of seven years with, you know, 20 or 30 developers. So is it just marketing hype, or is it real? And I was at a panel a few minutes ago with The UK, government AI thing with some unicorn AI companies, and I would ask them the question. And I think they're all looking to use it, but later stage teams are not using it as much.

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So that's one thing. The second thing is using AI for customer support to create a persona. So, obviously, you've got somebody here. I'm sure he's, like, genuine. You're not gonna replace the guy with AI.

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Scott Hansen: But you're replacing me.

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Anthony Rose: Exactly. But, you know, you can always recognize you so you see a lot of AI start ups looking to do outbound marketing, LinkedIn, create three d persona views. But I think in the same way we've had a no, filters moment, we can have a no AI moment in a whole lot of outbound outreach and so on. And so I'm also interested in discussing how much you're using that, as am I or not to replace what humans are doing.

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Jon Stidd: Well, thanks for sharing that. We just had a team trip. So, something happened with the website while the engineers were in the air and somebody had to send it to me. It's been a while since I've played with HTML and CSS. It's great.

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I use a cursor. Problem solved. I looked like a hero. Yeah. So we're seeing a lot of code teams still have a job?

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There was a reasonable excuse. Yeah. And then, hopefully, they're also using cursors. You know? It's a real cheat code.

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It's incredible. Anthony, to you, I wanted to talk to you about some of those biggest trends that founders should be paying attention to. Is that where you'd land that question? Should they be really focused on decreasing OPEX right now? Are there other technological shifts that you would tell them to focus on?

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Anthony Rose: I think as a founder, sort of natively, when you look within, you're either going to be the next generation of the world's gonna be completely different than AI, and you're gonna rethink a problem in a completely different way, or you're sort of more traditional, but you're using AI to get there more efficiently. So in my business, my customers want to talk to a human. They don't want to when they call and go, listen, my investor, you know, I'm wanting to raise a mil on a 5 mil, you know, valuation. My investor says it'll be high. I don't think they want a chatbot to go, yeah.

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No. That sounds great. You know? Try it alone and see how it goes. They want to talk to an expert.

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So even though I've got a support team of 30 or 40 people, I want to use AI judiciously to help them but without replacing them. But maybe I'm not thinking it through far enough, and I need to go to the next step. So, you know, as the founder, you're always thinking, replace something completely in a really new way or use it. I think the last thing for me is I look at the legal tech space, and there are tons of companies using AI for legal tech. So here's one thing that's really, really important to know because it's gonna kill many businesses, which is for you as a founder, you want, like, a 70% chance that your business is gonna sell for $20,000,000 in a few years' time.

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If you get home and, sorry, for an investor, they invest often like a poker game or a roulette game. They might want a 30 x or a 50 x return on investment knowing that 10% will succeed and 50% will fail completely. So if you get home and say, hey, honey. There's a 1% chance we'll be a unicorn and 99% chance we'll go bust, your partner's gonna say, get a proper job. So when you are going to VCs, I think you should, or investors, you should be aware that for the investor, they might be investing in way more AI companies than your sector will support.

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And when I look at legal tech AI for law firms, I see 50 companies. I also talk to law firms. They're selecting, like, one. So recognizing that for an investor, it's worth pumping money into many companies doing the same thing knowing that there'll be one winner. But for you, maybe you're better off talking to angel investors or crowd, to to get your odds without having to be on this treadmill if you have to go faster and faster until you're dead or a unicorn.

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Jon Stidd: Thank you, Anthony. That made me think about capital formation, capital deployment. Scott, I wanna ask you about capital formation. Right? But capital deployment, talk to Will.

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When you guys are, you know, thinking about investing in companies now, there was the IPO backlog recently, you know, markets have tanked a little bit now, more recently, unfortunately. Right? Prior to that, you know, valuations were pretty inflated. What are you guys looking at right now? Are you hanging on to the capital?

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Are you keeping it close to the vest before you deploy? Are you, you know, doing that so you have some dry powder? What are you all thinking about right now in terms of the companies you're looking at and when to invest?

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William Derrick: Yeah. In short, it is absolutely like a case by case basis. I think that there's always gonna be winners out there and companies that you want to invest in immediately. But from the landscape, you know, venture's been really tough the past two years, and it seems to be getting better. But I think it's created a shift where as a VC, we're looking for more, we're looking for companies to have, like, a little bit more solid fundamentals even at an early stage. You know, we want efficient use of capital. We want founders to be thinking about, how or maybe why they exit, like, early.

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And that's understandable. And I think that the days of, you know, money is free and scale at all costs, you know, find a unicorn, they still exist in certain circles for sure. But I think a lot of VCs are taking a more disciplined approach and finding success with it. Yeah. I appreciate that.

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Jon Stidd: I mean, slightly different end of the spectrum, but I believe some of the back story with FTX was like they just didn't have a board of directors and people would ask them about that. And, you know, FTX would tell them to pound sand and everybody invested anyway. So, you know, a slightly different time that we're in now. So I can see how that would make you all look back at fundamentals. Right?

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William Derrick: You know, there are winners out there and I bet their fundamentals look good. Yeah. Yeah. I mean, I think everyone gets, like, definitely a little starry eyed if you see a pitch deck that looks really good. But you do want to, like, kind of, you know, go back to talking to the team and, like, analyze the founder.

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Founder fundamentals are so important. You know, is this person gritty? On the last panel, they talked about all the lows they went through and, like, if your founder is not in it for the right reasons, then that investment, no matter how good the idea, might just fail because he quits or she quits.

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Jon Stidd: Yeah. Certainly.

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Scott, for you, in your experience, right, incredible success, at Island Brands. Right? I always remember seeing all the collateral from the raise, that sort of thing.

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Scott Hansen: They'll still stop me in the airport. I'm sure.

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Yeah. I sprayed myself all over Meta.

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Jon Stidd: Yeah. Scott had this incredible ad. He opened up the fridge in the beer aisle, and he was, like, kinda peeking down the barrel of it.

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So, yeah, I'd stop you in the airport too as a fan. For you right now, you know, so you've raised retail capital before, you work with founders raising retail capital now, equity crowd funding, or just raising online. Right? What are some of the hurdles that you see for those founders now? Is it the investment landscape?

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Is it the ability to position themselves? Do retail investors want to invest right now in the current climate?

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Scott Hansen: Well, we are seeing a shift, at least in the consumer product space to a lot of investors looking at the wellness space, which there's a proliferation of a lot of investors looking for wellness related products. But in terms of, you know, some of the challenges, you know, AI is great for data deployment and trying to retarget audiences and trying to find those communities out there. But where we see a lot of challenges is where people are trying to use AI, for the actual marketing piece.

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People are still just a lot smarter than that. And, you know, there's nothing that beats a founder that can, you know, provide their potential community with a really great story with passion. That really is what we look for. You know, we're in a fortunate situation where there's a lot of people looking for capital, and so we pick the companies that we work with. And one of the first things that we look for is the founder's passion.

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You know? Can they articulate and communicate, you know, what they're looking to do? Because, ultimately, you're selling a dream that in large part will probably fail. And so, you know, you wanna be able to, articulate that dream with passion and grow that community. The key to the communities that are out there of the people that invest in these opportunities are really the gold.

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Like, we don't we don't focus on, you know, let's let's let's go get you capital. We focus on messaging, raising awareness, and building that community. The capital is the residue. You know, if you do that successfully, the capital shows up. Yeah.

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Jon Stidd: Certainly. Well, I can imagine that some of the same you know, you talk about fundamentals in the deck, but, you know, you're also working for, you know, somebody who has the personality of, you know, the racehorse that's gonna be the winner.

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William Derrick: Yeah. The fundamentals at the stage we're looking at are pretty dubious. We have invested in companies that, like, you know, on paper, they're not, they're not super good.

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But I think that you can always look at a founder and after several meetings, you know, you can start to assess, you know, who is this person, why are they doing what they're doing, and do I think they're gonna bring some intangible to this company that's gonna increase their chance of success, you know? Is there an arbitrage opportunity there? So, yeah. With the seed stage, of course, the fundamentals get wonky, but I think for series like a and beyond, it's a little bit more disciplined.

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Jon Stidd: Anthony, please.

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Anthony Rose: Yeah. Just on the founder persona and pitching and so on, this is really vital because I talk to thousands of founders and, you know, some of them stick it, jump out. Like, I wanna invest in that. And you're always trying to figure out as you talk to people yourselves, what's that sort of intangible thing? Is it that you kind of want to go on this ride with them because they focused on some big picture outcome with, they've kind of dialed it up to 11, but you still think they can get there.

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And the challenge is most founders are, you know, if you know your Myers Briggs profiles, they're INTJ or INTP. They're probably tech founders. They'd love, like I do, to sit at a computer and do emails late at night instead of going talking to people. But you have to reinvent yourself, and you have to learn the art of the pitch. And that is gonna be the difference between getting investment, getting people to join you and your team, and getting people to build, to go and buy your product.

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And until AI can replace you no. It's not gonna happen. Then that's the key skill to learn, and then to analyze. So when you go to pitch competitions, you know, to go to pitch events and so on, and you'll see people pitching. And in most cases, you have at the end of it, you have no idea what they pitched.

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And, you want to start with something powerful. You wanna explain the problem you're solving, and then you work from there. So, I do webinars and so on. My favorite one was a barrister in The UK, a criminal barrister who's now a pitch deck coach. Why pitch deck coach?

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She said, well, years of being a criminal barrister, cases are hardly ever won or lost on the facts. It's always the storytelling, which is a bit worrying, but she now brings storytelling to pitch deck creation and to tell your story about the problem you solve. So that's the key thing to focus on.

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Jon Stidd: Love that. Thanks, Anthony.

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Don't let the facts get in the way of a good story. Scott, for you, right, so you've had the success raising retail capital, sold to private equity. Right? You know, so you have that sort of view of the capital stack where it's, you know, there's retail, there's institutional based capital. Right?

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Do you see a world where founders bypass traditional capital? Do you see them working in conjunction in the capital stack?

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Scott Hansen: I hope so. I think that the democratization of capital is where we're headed. You know, I've met with, some other, founders in the tokenization, you know, universe and where blockchain sits.

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And I think that once we can create, you know, standard liquidity for these opportunities, I think the world's gonna open up. And I think we're closer to that than we realize. I mean, some of what we're doing right now, I think, if you know, it's funny. People just don't know what they don't know, and I speak a lot about crowdfunding and trying to evangelize this for founders because I think it's such a tremendous opportunity to go find your people and and and get them to support you before you let the pariahs, you know, into your cap stack. You know, my bloodline.

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The, you know, the opportunity, to be able to, you know, have your community support your efforts, and grow that over multiple rounds, I think it is where it's headed. And, you know, it's exciting. It really is.

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Jon Stidd: That's great. Well, I can't imagine a world, I don't wanna speak for you, but where you wouldn't want sort of an army of community members involved in a company who are, you know, this grassroots support for them that is this retail investor and being able to invest alongside that.

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Do you see any friction there?

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William Derrick: Yeah. I mean, there's an issue, I think, if you are in some sort of retail investing model, like, if you were crowdfunding a company where, you know, you need to be very clear, like, who gets a say in the direction of the company. Right? Like, you don't want too many cooks in the kitchen.

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You don't wanna be able to, like, hosting votes on the next decision of the company where everyone gets to, you know, based on how much they invest, you know, cast their vote on where you think it should go next. I think that crowdfunding is absolutely the right capital, funding option for a lot of companies. You know, VC is incredibly particular. We look for home runs. That's how this business model works, and the failure rate's pretty high.

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And there's really high barriers to entry, which I think are all negative things. So the idea that retail investors can get involved in, you know, supporting and then eventually seeing returns on companies they believe in and support is a great idea. But, yeah, I think that you have to definitely be very clear on the kind of the rules upfront. And I will also add, if you guys don't agree with this, I'll have an existential crisis. But VCs add value in some way to their, like, the companies they invest in.

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We like to think that, you know, us being on the team and, like, part of the table can help companies, you know, survive and grow and achieve their goals.

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Jon Stidd: And I think if from a crowd funding model, that might be a harder, you know, value proposition to, like, come examples of companies, you know, an IP lawyer comes out of the woodwork. Yeah. Should we have changed this format to a debate? You know, we've seen IP lawyers kinda come out of the woodwork that our investors and, you know, they help them with patents and that sort of thing.

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But certainly, at a larger level, you know, Teague spoke about it earlier, you know, GM is an inventor, investor in them now. You know, that's a sort of strategic partner, that's, you know, incredibly important to them, you know, commercializing their technology, that sort of thing. So, you know, I certainly see both worlds there. Anthony, please. Yeah.

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Anthony Rose: I am literally sitting in the middle here. You know, if you're looking for money, you, you sort of the spectrum. A few hundred dollars each, or you can go to one person investing a million dollars, or you can go in the middle, which is to angel investors, and get 20 people investing $50,000 or $20,000 each. And that's kind of the area that I focus on. But, you know, when you think about what's best for you, I spoke to interestingly, crowdfunding is a lot more popular in The UK, I think, than The US.

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And people, you know, will flip between one and the other. So a friend of mine was doing data at one of the crowdfunding platforms, and one of his goals was to predict which crowdfunding rounds would be successful. And he said that the predictor was, do you have a big social media following? So it seems like if you can work the crowd in real life, you can work the crowd in a funding round. And also its retail brands that people identify with.

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So it's often gonna be microbrewery things and so on. Whereas if you're doing some defense AI thing, you know, your average, you know, investor putting in 10 k or $500 isn't gonna know about it. So what you want is you want to have a set of tools available that you can pick that 's right for you. If you're raising $5,000,000, it's an awful lot of crowd folks and quite a few angels. So you're probably gonna start with angels slash crowd initially and then work to VC later.

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And the other one thing, by the way, I should mention is that if you have a VC, the VC is gonna have investor consent rights and a board seat. If you have lots of angel investors, they're not gonna have any board seats and they're not gonna have any consent rights. So I quite like to have a spread population because you avoid a veto power from a VC. I should add, I've got index ventures as a VC in my series a round. So when you get to the point, it's not something to avoid.

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It's something to embrace, but you can grow your business faster in the early stages by just reaching out to a retail or a smaller number of angels.

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Jon Stidd: Certainly. In this last segment, I wanna focus on the next ten years. Right? So looking way ahead here, this first question is for Scott and then Will.

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Scott, something that you see now that you think in ten years, founders or investors will look back on and think, you know, hey, it's crazy we were doing it this way. Is it how they raise capital? Is it how they run their company in the absence of AI and using AI? What do you think about the future for companies there, whether it's founders or investors?

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Scott Hansen: I think the proliferation of technology is gonna allow us to see a faster route to market for these equity crowd funds.

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And and and, you know, I wanna make a note that all you know, VCP can add value, but it depends on the stage. Right? Like, when we're looking at a company and you talk to a founder, that founder has a dream. It's very personal to them. And in order for them to maintain that dream and control, equity crowdfunding allows for that.

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We had 9,000 people invest in our company, and they were championing us, and they were highly engaged. I think that that'll never go away. I think that the proliferation of that will grow as it makes it easier to technologies that make it easier to actually get on the platform and actually grow in that space. I think that, you know, Rebecca's CEO DealMaker was lobbying Congress last week. And if you haven't heard her testimony, Google it, look it up on YouTube.

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I mean, very powerful. And, you know, the way I see it is that the future is gonna be where Will and I are gonna be locked in arms to help brands, you know, grow, at a certain age stage, and then VC and PE comes in to help with, you know, an accelerated exit. That's just you know, I see that happening. And when Rebecca talked about raising the caps and allowing for more synergy between the CF and the reg A+, going from 75 to a hundred and 50 million, allowing institutional investors to come into those rounds. I think it's the combination of both that's really gonna create, you know, the future for founders to accelerate their dreams.

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Jon Stidd: Love that. Will, for you, anything, you know, ten years from now, we're gonna look back and say, hey. This is crazy. Are we gonna have, you know, an under 10 person team, you know, unicorn? You know, are they the billion dollar team because they did it with AI?

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You know, what are your thoughts on space?

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William Derrick: I wouldn't bet against it. I think that in the next ten years, I kind of like to elaborate on what Scott's talking about. As a venture firm, you know, we have investors as well. And we go out to institutions and endowments, and we ask for, you know, big checks from companies and entities that can afford to give away millions of dollars, with no liquidity for, like, ten years and it's really high risk. And that is why, you know, venture has existed and how it's, like, you know, gotten so big.

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I could see in the next ten years a situation where you have a fund that might look like a venture fund, but it gets its investment from a crowd sourced, you know, methodology. And so you have people who believe in investors, who believe in companies, and I think it is more like a vehicle to just deploy capital in a different way. It kind of reminds me a little bit of how I think access to just general equities, you know, the stock market has increased so much in the Internet age. Now that we have things like Robinhood, I think that access to alternative investments could be sort of the next big wave.

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Jon Stidd: Fascinating.

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Yeah. I'd love to see the different large language models and get out of the investment space. You know, it's like, llama from Facebook versus, you know, chat GPT sort of thing. Anthony, for you, you've done incredible work at SeedLegals as a pioneer in, you know, legal tech in the space, making it easier, more transparent for founders and investors. Is there anything in the regulatory space that you see, you know, needs to shift in order to unlock this next wave of growth?

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Anthony Rose: I'm not sure there's gonna be much. I mean, we all know that regulatory stuff moves glacially compared to everything else. So I don't think you're gonna see much. I mean, there are some rules changes. You can raise more with, reg CF from crowd and a few things.

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But, you know, most of your business is about finding customers and building a product, and everything else is just noise. So, you know, if you if I get to say ten years from now, we're all in the metaverse doing this panel session in the no. Because of the Texas beef barbecue, you can't get in the metaverse. So we're all gonna be here still, and take shit in the metaverse. But, I think to me, a key existential thing for a start up for every one of us to think about is how do we grow our business using AI.

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And once upon a time, it used to be a badge of honor. The more employees you had, the better you were, and that suddenly changed. And certainly, my Twitter feed is filled with, you know, people saying you can build the next unicorn on one person. I think that's all bullshit because as soon as you have a successful business, you add salespeople and you add others because you go faster by having these other people. Plus, as a solo founder, you can't do taxes in 50 states and do all this other stuff that needs to run the business.

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So you're going to have a larger business, but you're gonna figure out how you can get there using AI to test it, validate its scale, need fewer support in sales team members, and so on to get a leaner business so you don't need to raise as much. But also, because your competitors are gonna be doing the same thing.

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Jon Stidd: Thank you for that. Quick aside, I owe some payroll tax in Idaho and, yeah. Yeah.

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It's not gonna get that done for me. Yeah. Yeah. About to wrap here shortly. This is the last panel.

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Are there any questions from the crowd?

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Attendee: Well, I wanted to ask one question selfishly and then I'll pass it to anyone. So think of your questions. So at EnergyX, we're obviously very bullish and have been quite successful raising capital from retail. I think we've raised close to $90,000,000 from 30,000 investors.

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But ten years ago, when I was in the startup landscape, the idea of raising money, hundred dollars, 5 hundred dollars at a time, was, you know, unfathomable and also, kind of had a yucky stigma to it. Right? Retail capital has come such a far away, but it still seems like there is some type of stigma in raising capital from retail investors. Like, it's not as prestigious as a venture capital firm. And I'm curious, each one of you probably have a different perspective, but why do we think that it has such a bad retail capital and has such a bad rap, and what would need to change in order for that perception to change?

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William Derrick: I can start. It might be just VCs gatekeeping and talking shit. I yeah. I think that it's new. It's always, like, pretty easy to criticize what's new, but it works.

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And when success stories start to come out about it and people see it as, like, a very good alternative or an alternative that maybe fits their business better and they have success with it, I see a world in which they coexist and it's just two different options. One's not better. They just have trade offs.

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Anthony Rose: Once upon a time, the only way to get money was to borrow it from a bank. And then equity investing started, I think, largely in New York, and that's what people would put money in.

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There were funds, and there was nothing else. So VC was the starting point. So then when crowdfunding and angel investors came along, I think people saw it as a second best. You couldn't raise from a fund, so you had to go to the crowd. But you should invert the narrative.

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There's nothing wrong with it. It's a new tool. So what you want is, without any embarrassment, you've got various tools you can use to grow your business. And if you are the kind of founder that can reach out to a crowd and tell a great story, you should use it. And, you know, if you've got an investor that, you know, one of the things you might hear is, well, VCs don't like crowds on your cap table.

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I think that's nonsense, and I wouldn't want a VC that doesn't want that kind of thing on my cap table. So, you know, my last round, I was thinking, should I go to VC or should I do a crowd round? I've got lots and lots of founders on our platform. I can just write to them saying we're raising. And we debated it.

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Eventually, it turned out that actually Index Ventures wrote a nice check, and I didn't need to. But I was flirting with it, and I, you know, in retrospect, I kind of would have liked to do that. So see it as all options, and you don't need to be embarrassed about the one you take. Whatever you're doing, you wanna put the least effort into finding the investment needed to get you to the next step.

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Scott Hansen: I would agree with Will.

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I think some of the stigma comes from VC themselves, and and just unknown. When we were raising capital and we were going the institutional route, you know, everything they told me not to do, I did, and that was my North Star, which included doing the crowdfunding. But I think that, there's this misnomer still because there's just not a lot of people that really know what it's about. When you talk about it, you know, and you stop somebody on the street, they think it's like Kickstarter. There's still that misnomer.

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They just don't know what it is. So I think the stigma is just, not knowing. But I will say the PE firm that ended up buying Island, you know, they were like, what do we do with all these people? And I was like, you keep them because they're the ones that are running around buying the products. They're your biggest evangelists.

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And, I'm proud that we were able to do what we did to get where we were, you know, with that ecosystem. And we wouldn't have been able to do it without it because consumer products are a heavy lift.

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Attendee: Open it up for questions. Who has a question for us probably has two or three questions. Okay.

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Hello. My name is Sotiris. It actually feels pretty nice not to be the startup founder pitching up on the stage, but asking the VC the questions the other way around. So, with AI, the main difference that we're seeing in startups now is we need to move a lot faster. What we needed twelve months before now, we'll have to accomplish in two months to remain first movers out there.

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So I feel like money is pretty easy right now to raise, but, to move even faster, we need strategic investors. How does a VC will help me strategically to open more doors for me, to open maybe three more countries, and not just by getting money?

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Anthony Rose: So that's it. I'll go first if I can. Yeah.

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So, you know, when you go to a hotel or you go to rent an apartment and they go to show you how fantastic the lobby is and the bike racks, you know, the more they sell the wonderful lobby, the shittier the room's gonna be. And I think with VCs, the more they upsell how they're gonna help you, the lower the valuation they're gonna lowball you on. But the reality is, you know, VCs mean well. But two or three, funding rounds later, they've gotten bored and moved on. So they're all the things they're promising they're gonna help.

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Of course, you want your VC to evangelize you and talk about you at any opportunity. But to rely on them doing a lot more than bringing money, I think it's tough. So for me, I see an advisor as someone I pay money to, and when they stop giving me advice, I terminate it. And an investor is someone who gives me money, and I don't necessarily want to talk to them. I want to give them a good return on investment in a few years' time and kind of leave me alone to run the business.

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If they help and evangelize, that's awesome. But I know they're gonna have done five more rounds, flirted with five more people in between, and gotten bored with me, and I should just expect that.

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Attendee: Thank you so much. That was a wonderful panel. This is a question for Scott.

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I'd love to hear more about your strategy for island brands. Clearly, you're a pioneer in space. We'd love to hear more about what that success looks like and how you're able to accomplish it.

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Scott Hansen: I'm sorry, Camille. One more time.

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Attendee: Your strategy for your reg CF, what that looked like, and how you're able to achieve success with crowdfunding?

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Scott Hansen: Ours? Yeah. Our personal one? Yeah.

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I think, really, it is for us, it boiled down to really cultivating the community early on. You know, we had a really great engagement with the people that were buying our products. And then, boy oh, boy, I prime that pump. Like, leading up to the Reg CF that we initially launched, people were, like, waiting in line. I had the line, like, down the street into another you know, it was so when we turned it on, the cap at the time was a million 70.

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We raised that in thirty four days, and it cost us about $23,000. So that was pretty good. And I was like, let's do this again because it was like 66% or thereabouts ROAS. Those days are kinda gone. But the reality is that the ones we see now, it's not like one thing that does it.

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It's like everything. I liken it to, like, an orchestra. You know? You need, you know, all the sections playing to hear beautiful music. You know, meta might just be the drumbeat.

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Right? But the reality is it's like you have to invest in this thing too. You know? The marketing of it, you know, EnergyX didn't raise $90,000,000 without spending some money. They spent millions of dollars, but the return and the efficiency of capital was there.

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And a large part because of the great technology that DealMaker has and and and a lot of other platforms has as well.

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Attendee: Thank you. I think we have one more question after this. So I'm big on analogies and things, and people remember the movie Gladiator, and he goes into the tent. And he says, you know, or, Richard Harris says, you know, Maximus, I want you to take over the Republic.

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And he's like, I can't do it, but he has the army. He commands the army. And this is kinda leading towards, crowdfunding in the fact that if you can command that army and cultivate that army, you can lead I mean, you're not only just bringing in the funds to build your business, but you're creating a loyal army that are gonna run out there to the supermarkets and the bar rooms and whoever whatever, space you're in. And that's where I see the beauty of crowdfunding because you're hitting on all different cylinders of growing your company, the brand, the marketing of it, and ultimately, gaining the capital you need to grow the brand even further. My question is the fact that how do you wear where does the equity part of it of the crowdfunding take part?

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Like, you know, I know there's no equity and then there is equity. Where do you find that balance to what you can get away with to then position it, you know, to your In terms of valuation? Valuation and how much you give up, you know, like you said, with your PC that came in. What do we do with this army? Right?

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How much do you know, what's that balance?

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Scott Hansen: Yeah. I mean, I think deal by deal. And to your point, the reason why we called our company Maverick Brands is, you know, if you have a you know, you know the waves that are hard to the Maverick waves, the out in California, but also a horse you can't put a saddle on. So those brands that are fighting against convention are a David and Goliath that otherwise wouldn't be able to get to where they wanna go, that's why we named Maverick brands Maverick brands.

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But to your point, you know, every deal is different. You know, we actually, now structure deals, that, you know, we what we talk about with founders is, what do you wanna get out of this? You know, you have to really look five and ten years down the road. Is it raising equity? Is it straight, equity, or is it a convertible note or a safe?

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I mean, there's so many different ways to structure a deal. Why I'm a huge proponent is because the founder and the board can get together and really craft something that is tailor made for the journey they're going on. You know? It's like, what are we gonna put on this, on this ship before we go where we're trying to get to our destination? And part of that is how you structure the deal.

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I'm a huge fan of convertible notes, particularly with valuations being a little dicey in the space. You can kick the valuation down the road, and, you know, it's, it's a good way for investors to clip a coupon, you know, along the way.

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Anthony Rose: Can I just add that, you know, crowdfunding is a double edged sword because you see the gladiator movie of the thousands of people doing your bidding? The reality is they put $500 in and a little while later, you know, they've invested in other beer brands as well. But the problem is VCs know the power law of fundraising.

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They know that things don't work out and they, you know, take that into account. But when you get retail investors, they don't understand this. My value has gone down. I want my money back. Dude, you can't have your money back.

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That was the whole point of the convertible note to a safe. So, you know, if the value is if business is going brilliantly, the crowd's on your side. If business is not, it might be a tough crowd.

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William Derrick: Yeah. Adding to that a little bit too, if you take VC money and fail, you know, you're letting down VCs, so no one's gonna cry.

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But I think if you take crowdfunding money to this point, you, you know, you're losing money from people who might not be professional investors. You know? You're not losing money from an endowment or a massive institution. You're losing people's money, and that can be, I think, heavy on a founder.

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Attendee: Okay.

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I have one question for Jon since he hasn't answered any questions today. I was avoiding them. I know. So as the chief marketing officer at DealMaker, you've seen the evolution of how marketing deals, how it can be the make or break between a successful campaign. What do you think or in your experience when you were actually not on the deal maker side, but helping issuers raise capital, what do you think was the formula for success for raising capital with marketing?

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Jon Stidd: I'll take that one. Yeah. The marketing aspect's really interesting. Right? Like, I think about distribution a lot.

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You know, distribution has changed. Right? You know, it used to just be newspapers and then it was social media and then you have, like, mister Beast and Kim K. It's like, yeah, they own the distribution now. Like, they have that power.

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And, digital capital raising is very much the same. Right? It's like, you know, if you were gonna reinvent raising capital today, you'd for sure use the Internet. Right? So, you know, I love that brands have taken what was purely an e-commerce tactic, like, you know, how do you grow your business online to how do you raise capital online.

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And some of the tenants of what we see be successful in this space are, things that are, visual and visceral and in the zeitgeist. Right? It's, you know, part of EnergyX's success is, you know, everybody got to hear about lithium and the cleantech revolution. Nobody got to invest in it. Right?

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And then they hear about EnergyX and they say, oh, you know, this could be the next Tesla. I want to invest in that. So, some of those things that we see there are really just retail investor appetite affecting or reflecting what I think is, the, lack of access to those private investment opportunities where then that comes around and they say, oh, I saw, you know, this company that looks like Palantir and Palantir does this. I didn't get access to Palantir. So really around the democratization of that and giving everybody access to it.

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So yeah, those companies that are leading the charge. Right? You know, that retail appetite, shows its interest in those companies, that are the next change makers in those spaces. So, you know, companies that are innovative and visual and visceral, you know, that's one shade, but you, you know, you look at what Scott did at Island Brands, it's, you know, people also wanna own the companies they love. Right?

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Like, there's a reason, that Reddit, you know, before their IPO gave their power users, you know, stock. Right? It's like they recognize that your brand strategy is now your capital strategy. Right? And I think we're gonna see a lot more of that where people want to have a one to one relationship with the brands that they love.

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So, yeah, really two answers there. That sort of, like, brand aspect to it too, but also this world of, like, oh, I never had access to this private investment opportunity and now I do.

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Attendee: Great. I have time for one more question. Does anyone have one more question for the group?

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I have a, like, double question. How does DealMaker decide which companies they want to work with? And then how do investors decide which platform they want to use?

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Jon Stidd: Good question. Yeah.

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We think about that a lot. You know, VC's role is to pick winners. Right? That's really hard to do. Right?

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That's why they have portfolio theory and, you know, they've invested in a lot of companies. Our job is to provide the infrastructure for companies to raise capital. What we try to bolt on top of that is, an analysis of, you know, your likelihood for a successful outcome and what that outcome may look like for you really in terms of cost of capital. One of those factors Anthony mentioned is the social following. Right?

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So when we think about somebody turning their community into investors, right, obviously, a big social following is a component of that. But we look at sort of, an aggregate of data points. What industry are they in? You know, what stage is the company at? What is their following like?

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And, see if it matches any of the companies that we've been successful with in the past and say, you know, hey. We can't guarantee anything, of course, but, like, we think you fit in sort of, like, this tier of that. And we try to take that really seriously. Right? Yeah.

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Attendee: Do you wanna answer the second part of the question?

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Scott Hansen: We've we've, you know, we used to take a lot of different companies on, and and, unfortunately, not every founder is gonna be as energetic or exciting. You know? We actually developed Maverick brands and developed a very structured process, now that we go through. And, you know, it's really now becoming more quality over quantity.

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If you know, I'm personally connected to the founders, and I don't wanna let a founder down. So I've had tough conversations with founders where, you know, I feel like, you know, just give them my truth, you know, like, maybe wait. Fix this and do some of these things and come back. Because sometimes, even companies aren't ready for crowdfunding, and you really kinda get one shot. You know?

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And the earned media and their stage, you know, in the in the in in growth, the reach, there's so many factors that we take into account. And, you know, we've leveled up now over the last year that we've had Maverick brands. Happy to say that, you know, this is now a crop of, you know, eight that we have launched on, we're platform agnostic, so we launch on various platforms. You know, we're really excited about all of them because they all have, I think, that x factor that EnergyX has that could go the distance. And we really look at companies that we want to bring through the reg CF and then graduate them to a reg A.

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That's kinda more our our, you know, focus now is not really now it's become more bifurcated. WeFunder is a platform that's like a public pool. All you have to do is show up. As long as you have a bathing suit on, you don't even need a towel. You know?

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But, you know, you get one shot at it. And I'm not sure, you know, there's Charlemagne's out there still, you know, that are taking advantage of the situation, which is not necessarily who you wanna work with in that space. So we've taken a much more disciplined structured approach, and we're excited about the future of, you know, some of these brands that we believe are gonna scale and thrive, and then we can hand them off to Will to, to blow them up even further and sell them.

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Anthony Rose: I think if you look at the ecosystem, you've obviously got investors who are gonna pick for themselves the right companies, the right stage to fit their investment thesis, and they might pick one in a hundred that come their way because tons are coming in. And then you've got the matchmakers, the people who are helping you get your pitch in front of investors and finding investors and connecting you.

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But they want to have a decent batting average. Otherwise, it's not good for them, and it's not good for you, and not good for the investors. So they're gonna do some picking. And then, you know, on my side, I'm here to do the legals. But my goal is not just to do legals, which is boring.

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It's to help everyone get investment ready so you have the best pitch deck and the best opportunity to go and put a great pitch in front of people so that whether you find investors yourself or you go to somebody to help you do that, you're gonna have a winning pitch and legals.

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Jon Stidd: I think we're done. We took it to OT there. Thank you guys very much. That was a lot of fun.

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I appreciate it. Thanks, y'all.

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