Product Startup Podcast Episode 070: Finance, Scale, and Exit a Product Company

00:00:00 Kevin Mako: Hello, product innovators. Today we learn from a CPA lawyer and executive from the manufacturing sector on how to think about financing for eventual acquisition.

00:00:11 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, product developers,

00:00:23 Narrator: and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial idea to getting your product on store shelves.

00:00:32 Narrator: We're taking you step by step to build a functional product and scale your product business. Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses.

00:00:45 Narrator: Now, onto the show.

00:00:48 Kevin Mako: Welcome back, everyone. Today I'm excited to introduce Joe Sekela to the show. Joe is both a CPA and a lawyer from the manufacturing sector. He has worked with many emerging and established manufacturing operations, including a major turnaround of Jefferson Electroval.

00:01:02 Kevin Mako: Which, by the way, went on to go public. Since then, Joe has spent the past 10 years researching how to financially scale hardware companies and is now working to launch Dream Exchange, a way for small companies to go public. Today, Joe is going to share some valuable knowledge

00:01:17 Kevin Mako: in how inventors, startups, and small manufacturers can think ahead to how they will finance and scale their product, but also what an acquisition or go-to-public exit looks like, and why it's always good to think about that sooner in the product startup journey than later. Now,

00:01:32 Kevin Mako: on to the show.

00:01:35 Kevin Mako: Joe, welcome to the show. Happy to have you here. Great to be here, Kevin. Thanks for having me. Oh, I know. I'm really glad you're here.

00:01:42 Kevin Mako: I was laughing before the show because you said that you've got a hobby recently and I was really interested. Okay, well, what could Joe be up to? And amongst all the things that you're doing in your career. And,

00:01:52 Kevin Mako: well, you told me you had

00:01:52 Joe Cecala: six kids and that's the hobby. I don't know how you do it all and with six kids. Yeah, It leaves little room for anything else.

00:01:59 Kevin Mako: But, you know, and even the older ones, there's just, the dad hat is the number one hat that I wear.

00:02:08 Kevin Mako: I don't blame you. I'm new to the game. I've just got a, he's almost eight months old. But, you know, that's already been a mitful. So I can't imagine six.

00:02:16 Kevin Mako: Well, I'm especially amazed by how much you've accomplished and what's going on as well with dream exchange and everything else. We'll get to that in a bit. But first and foremost, Joe, why don't you just get? give us a bit of a background in your history. I know you've got a lot of experience in manufacturing.

00:02:31 Kevin Mako: Very excited to talk about that today.

00:02:33 Joe Cecala: Why you just kick it off with a brief background? And then we'll jump into what's going on in production and your insights.

00:02:41 Joe Cecala: Sure. Sure. I, you know, I opened an M&A firm about 14 years ago inside my law practice, really. And my real goal was to help people who make things.

00:02:52 Joe Cecala: That's the backbone of the country. And if you're manufacturing something and you make a product, I began to notice that there are a lot of tools that manufacturers didn't have because they're so concentrated on making more and selling more.

00:03:07 Joe Cecala: So really my background kind of relevant for our discussion today is, you know, I had many manufacturing companies that I helped to raise capital and I help them exit.

00:03:16 Joe Cecala: But inside of that, I create a lot of programs to help the owner and CEO kind of develop a plan to raise the capital and to successfully exit.

00:03:26 Kevin Mako: And, you know, I'm 30 years of CPA and a lawyer, so one or one or both of those. So that's, it's kind of the approach I brought to all my consultative work. Oh, that's great.

00:03:37 Kevin Mako: And, you know, we've got a lot of startups that listen to the show, a lot of product developers.

00:03:43 Kevin Mako: And I have always been a big fan of looking forward at the light of the end of the tunnel, really understanding, like you're, even if you're just starting on the journey, developing an adventure, even if it's just in the back of your head.

00:03:54 Kevin Mako: thinking down the road and realizing that, okay, first and foremost, if you want to succeed with a hardware product, you've got to get to production. But then when you're in production,

00:04:05 Kevin Mako: what options do you have? So I'm very interested, Joe, to talk to you today about the concept of manufacturing, getting sales, but all with a plan around exiting through acquisition.

00:04:17 Kevin Mako: And I can tell you, most of the clients that we have that come through Mako Design, starting just from a sketch and going all the way through to production,

00:04:24 Kevin Mako: basically anyone who's gotten to even kind of low six-figure sales numbers, most of them are getting acquired by big companies.

00:04:32 Kevin Mako: So that, you know, those companies are, because those companies are spending less in R&D, and they're spending more money on acquiring great new emerging technologies that have been tested in the market that have real users saying, I love this, right? So if we're thinking about a potential exit,

00:04:47 Kevin Mako: let's trickle back to even the first manufacturing run as we get going. We talked about this, Joe, behind the scenes a little bit. I'm really interested.

00:04:54 Joe Cecala: You talk about this automation and manufacturing.

00:04:57 Joe Cecala: What exactly does that mean? And how can a startup think about that as they're starting to get their product into market and starting to build their manufacturing pipeline out? Yeah, that's a great question.

00:05:09 Joe Cecala: So, you know, first and foremost in your mind, you have to take the viewpoint of the person who may be acquiring your business. And especially as it may pertain to automation.

00:05:20 Joe Cecala: what are they buying? And, you know, if you have processes in place, you have key staff, that may be very good, but they're really, like you alluded to, they're very much more interested

00:05:33 Joe Cecala: in concentrating on your idea, the novelty, the thing that enhances value to them, because especially if they're a big company, they may not need all your sales. They just may need

00:05:43 Joe Cecala: what you're doing that can enhance their sales a hundredfold. And if you had their abilities, you'd be able to do that. Well, you know, an automation process or a key acquisition where,

00:05:54 Joe Cecala: you know, you may want to raise money to buy another small company and get merged in. I've done that numerous times where you're kind of rolling up what is needed in your own environment to make

00:06:06 Joe Cecala: yourself more saleable and increase your value. Concentrating on the exit value is a really

00:06:11 Kevin Mako: important thing for a manufacturing company to do. It doesn't necessarily increase value. It doesn't necessarily you just because you made the next sale. If you've developed the process and you've developed

00:06:23 Kevin Mako: your pilots and you've gotten them commercialized, that becomes extremely valuable in an exit conversation. Absolutely. And I like how you mentioned kind of the automation and manufacturing,

00:06:35 Kevin Mako: but in other elements of your business too. You have to think about it from a buyer's perspective, right? Some of them may just want your technology. So you've proven the market. You've got some users. They love your product. They may just say, you know what, we're going to buy your technology.

00:06:48 Kevin Mako: and we're going to stick it into our ecosystem and it's all going to be figured out and off we go. However, more often than not, what they do is they acquire potentially you, potentially your staff,

00:07:01 Kevin Mako: potentially your processes, your back end. I've seen many examples where, especially in the manufacturing space, people think, okay, I'm going to exit and we're going to walk away from this thing. But the reality is that company, yes, they wanted your technology and they're willing to pay

00:07:15 Kevin Mako: a fair price, but they didn't have either the time. or the resources to essentially redo your entire business model. So they're not just investing in your technology, but they're investing in your processes.

00:07:28 Kevin Mako: So you want to make sure that you're not taking those buyers off the table. If you say, well, look, I don't have any processes. I have no processes. My staff, it's basically just myself. I haven't written down how I do anything.

00:07:40 Kevin Mako: My customers are all friends of mine or through my own direct network. And all of a sudden, you have no automation. you have nothing other than your technology, you're losing probably the largest part of that

00:07:52 Kevin Mako: potential acquire market. So the more that you can automate everything from your manufacturing to your internal processes, the exponentially more conversations you're going to have with

00:08:03 Joe Cecala: potential buyers that may have different ways of seeing your technology integrate into their business. So in terms of that, Joe, talk a bit about what happened with your experience.

00:08:13 Joe Cecala: You're with Jefferson Electric for almost five years back near 2006 and onward. You kind of took them through a major transformation. Now, this was a 90-year-old company, but they needed a lot of work to think forward to that acquisition.

00:08:28 Joe Cecala: Walk us through what happened there. Right. And you've nailed it. I mean, the fact is that there was a lot of strategic thinking. And when you're looking at exiting,

00:08:38 Joe Cecala: you can put the pools of your potential partners into two categories. financial buyer and a strategic buyer. And historically, a strategic buyer for all the reasons that you just outlined, Kevin,

00:08:51 Joe Cecala: is a far more valuable exit. So what we did at Jefferson was we created a strategy because they'd been operating well for 90 years. They'd sold great products. They were very well known.

00:09:02 Joe Cecala: But the strategy to get them to a next level and exit involve, A, getting processes in place, getting, getting, they had to do a key acquisition. They actually did a foreign acquisition in Mexico right after I started working with them,

00:09:17 Joe Cecala: which gave them manufacturing capacity, but it also gave them the ability to implement a certain amount of automation in their plant. And the strategic buyers were looking at going, wow,

00:09:28 Joe Cecala: we can fill a plant with these types of products. And that's very valuable to us to buy. And they didn't, you know, Jefferson at the time, they didn't have the sales. they didn't have the profitability.

00:09:43 Joe Cecala: They didn't have the things a financial buyer would be interested in. But they clearly were so much more strategic to the eventual buyer. And the eventual buyer paid significantly more than all the people we tried to raise capital from

00:09:57 Joe Cecala: because they were purely looking at a balance sheet and income statement.

00:10:01 Kevin Mako: So we definitely executed a really good plan on key acquisitions, automation of plan. We hired a chief operating officer. and that guy actually expanded sales because we didn't have these kind of, like you just described,

00:10:15 Kevin Mako: like, hey, I know Jim, he's my cousin, he's going to buy for me. But we got a national sales figure who ran a sales team. And that was, he went, he was sold with the company.

00:10:27 Kevin Mako: So those type of strategic decisions are really important to consider early on. Something that really stands out for me there that is very applicable, even to the earliest stage startups,

00:10:37 Kevin Mako: is that that acquisition took place not on financial merits. And that is the situation that a lot of startup product businesses will be in. You may not have great margins yet.

00:10:52 Kevin Mako: You may not have great sales yet. You may not have national distribution. You may not have your own production facility. You may not have your own sales team. But you're going to have certain core pieces that that company needs and can substantially amplify.

00:11:07 Kevin Mako: So that's, you know, it's interesting that even a 90-year-old company with that much history

00:11:13 Kevin Mako: still found an acquire that found more merit in their non-financial, their value than elsewhere. And I think for, you to think of innovators, your greatest value is obviously your invention. So the more that you can now shore up these other things that Joe is talking about in terms

00:11:27 Kevin Mako: of automating as much as you can to make as much about that business acquisition attractive to a potential buyer, the exponentially better off you're going to be.

00:11:39 Kevin Mako: So one of those things, Joe, that you talk about a lot is in terms of automation,

00:11:47 Kevin Mako: but comparing the short term to the long term. So automation is really, whether it's a staffing automation or internal processes or manufacturing or whatever else, generally it requires an upfront investment.

00:12:00 Joe Cecala: So, you know, it's one of those things where you're investing for. the long term now, you know, you're putting money forward and effort and resources, even personal time. All of that is considered an investment. But down the road, that allows you to create that

00:12:12 Joe Cecala: automation, which very much is, you know, increasing that attractability of your company. So why don't you talk a bit about how you kind of think about funding that automation? Like, how do you pre-fund it?

00:12:25 Joe Cecala: Let's say you don't have the money or the efforts or whatever to get in there. How do you create that stepping stone so that you can invest forward and then months or even years down the road then feel like you're in a good position for that strategic acquisition once you've got that automation ironed out. Yeah,

00:12:41 Joe Cecala: it's a similar conversation. You've got to get into the mindset of your investor. So if you're if you need capital to expand, my favorite expression is you've got to bite the bullet.

00:12:52 Joe Cecala: And here's exactly to Kevin's point. And this is why you have to bite the bullet. because if you don't go and retool, if you don't go and put yourself in a position, even software

00:13:05 Joe Cecala: engineering, where you're going to make an investment in software engineering, if you can persuade your investor that's spending a dollar, you're going to reduce your profitability, it's costly.

00:13:17 Joe Cecala: Anytime you change a process, there's the human element of it, not just the capital element of it, you're going to reduce your profitability. But the way a financial investor looks at your company is, they take your earnings and they have a multiple and earnings multiple.

00:13:32 Joe Cecala: Well, if you can show that a change in your processes can, for them, produce many more increased revenue dollars down the road, profitability dollars,

00:13:43 Joe Cecala: well, every $1 of profitability is going to give you an exponential increase in the multiple. So a company that has $2 million in earnings today, well, your multiple is running between four and five.

00:13:56 Joe Cecala: You might be worth $8 or $10 million on paper. But if you can jump from a two to a three by getting capital in,

00:14:04 Joe Cecala: you can increase your multiple valuation multiple to $7, 8, 10. So just getting that extra few dollars of earnings because you bit the bullet and you got

00:14:14 Joe Cecala: yourself automated and you remove these risk factors for that future investor, it's going to give you exponential increases in value. It gives you so much more leverage when you're exiting especially if it's a strategic investor.

00:14:29 Joe Cecala: A great example, I can give you one really good example is WebEx. I mean, they were obviously a tech company, but they never made any money. They had $100 million in sales and they literally lost money every year. But when they were acquired,

00:14:41 Kevin Mako: they were acquired for $3.2 billion on $100 million of gross revenue and zero earnings. But they were so incredibly valuable. They had invested so much in the engineering of their audiovisual

00:14:55 Kevin Mako: communications technology that in the hands of others, they were like, yeah,

00:15:00 Kevin Mako: it would cost us more than $3 billion to build this. Let's just buy it. And the other fact it was before someone else comes and buys these guys. Right. So those are putting yourself in the mind of that

00:15:14 Kevin Mako: strategic investor, even after you're asking for capital early on. But bite the bullet, get your capital or invest your profitability in making those changes. And your value on exit is going to go way up. Those are great points.

00:15:28 Kevin Mako: And I think it's even more amplified when it comes to manufacturing because not only do you have the investment. Yeah, precisely. You get you to this point, right? Manufacturing is really a long-term play, right? You're investing in tooling and infrastructure and scaling and whatever else, whether

00:15:42 Kevin Mako: you're, you know, even from that first sketch that you have through to getting your prototype, then to getting into production, then to getting your first sales. then to scaling, right? It's almost an exponential effect. I've used that word a few times on purpose

00:15:54 Kevin Mako: because hardware is very much like that. It's a big investment up front, but then it has a massive scale down the road. So if you're looking to exit, not only are you looking to ramp up the amount

00:16:05 Kevin Mako: of sales that you're making down the road, but that when you're showing that increase in sales, like you were saying, Joe, you're increasing your actual EBITDA value, which is a multiple

00:16:15 Kevin Mako: on a sale. If you go for four to eight times ebid to multiple on a sale, right, not only have you made twice of money, but if you've doubled up revenue at the same time, now you've quadrupled your income there, right? And you've also made yourself far more attractive. You've shown that

00:16:29 Kevin Mako: interest in terms of scale and growth, which is, you know, whether it's a financial buyer or a strategic buyer, they all love to see that, but it's very capitally intensive. So it helps, even if you're at the very first sketch stage, think about those moments down the road. Think of

00:16:44 Joe Cecala: where, and it's okay if you want to start a product and slowly grow and scale. But if you say, look, I want to make this thing 10 times a size, you have to invest now and you won't see that return tomorrow. It'll take a year or two or three years for that to then amplify for you to get

00:16:58 Joe Cecala: the value from that return. And then that's the very benchmark that you're using there. Look at where I was three years ago. Look at where I am today. Look at how that money stretched. Look at the sales that

00:17:08 Joe Cecala: are now made. Now I'm worth multiple times more. And that really is the beauty of hardware. Nothing can really quite scale like hardware. You find the right buyer. You can go from 5,000 to 50,000 sales overnight, right? If they like what you're what you're selling, right? You get that first

00:17:22 Joe Cecala: deal with Home Depot or Walmart or whatever else. And all of a sudden, you go from zero to hero. But I can tell you, none of those deals happen without infrastructure investment, especially in hardware, especially in manufacturing.

00:17:36 Joe Cecala: Right. And getting to that little bit of extra profitability growing is far more important than getting to the actual big, big number. If you're growing, that's your leverage. When the buyers look at you and investors look at you,

00:17:51 Kevin Mako: your leverage is, well, if I don't invest now, this guy's going to be at double his earnings in two years. I'm going to pay twice the price in two years. So it makes them much more malleable

00:18:03 Kevin Mako: to negotiating in the present time if you've done those things. If you haven't done those things, and you're looking at getting capital, they're going, well, he's flat, he's been flat for

00:18:13 Kevin Mako: 10 years, which is why it was so interesting to use Jefferson as my model, because we actually did that with Jefferson. And it took us about three years of making smaller investments in,

00:18:25 Kevin Mako: in the hardware, in making sure that things could be built and scaled in a way that they started growing. And as soon as they started growing, it was like, okay, we better do this now because in two years, we're going to have to pay twice the price.

00:18:39 Kevin Mako: And you might only get one and a half times, okay, but you're still getting more than you got by staying flat. Well, I also think this is a bit of a hidden, you know, let's call it an investment hack or a life hack.

00:18:49 Kevin Mako: Because the funny thing is, when you're looking at these things and you say, hey, look, I grew this much in the last three years, they're far more excited about that and saying, well, yeah, but how much did you invest to get that growth?

00:18:59 Kevin Mako: that question may come down the road, but that's not, it doesn't have nearly the impact of your growth in sales. So you've got this opportunity to say, okay, let's leverage up, let's build up,

00:19:11 Kevin Mako: let's show top line growth, which is the number one thing that an acquire, especially a strategic acquires looking for, right? They say, okay, well, because your small time generally and

00:19:21 Joe Cecala: the acquires big, for the most part, obviously is exceptions to that. But the biggest thing is they're interested, not really in the fact that, sure, maybe you've only made $100,000

00:19:31 Joe Cecala: in sales, but if you took that from $50,000 to $100,000, heck, even if you invested $50,000 in order to get that growth, what they see is, okay, if you took from $50 to $100, we're now 100 times the size of a company.

00:19:43 Joe Cecala: So we are going to be able to use that same growth curve, but with our infrastructure and make it a hundred times the size of a product, possibly even more for if we're using that to leverage up or grow some of our own technologies or to help sell some of our technologies

00:19:58 Joe Cecala: or to package with our technologies or products or whatever else, right? So that's why it's so important to get that investment as early, you know, as you can, especially when you're scaling, leverage that. And especially if your intention is exit, which we're talking about

00:20:13 Joe Cecala: today, right, that will really amplify your ability to get a much, much bigger exit number and simply to be more attractive at the same time. Yeah. And if you're getting,

00:20:23 Joe Cecala: getting capital as an intermediate step to the exit. That's what you're selling. You can't sell them on your financials. So what you're going to sell them on is the scaling. You're going to

00:20:32 Joe Cecala: sell them on the plan that if they do this and they invest at the higher valuation, that that higher valuation will produce an even higher exit because you're

00:20:44 Joe Cecala: spending money on things that are going to remain behind. That's what people want to buy. You know, and the multiple is very interesting if you look at this and you look at your lane, look at your company and what lane it's in, and look at what are the

00:20:58 Joe Cecala: potential public company acquirers and look at their price to earnings on the stock exchange. Right. And you'll begin to see that there's 20 and 25 and 30 times earnings in the public markets.

00:21:11 Joe Cecala: Well, they're not going to pay you 60 times your earnings to get you to your valuation, but they might be willing to pay you 10 or 15.

00:21:19 Kevin Mako: Why? Because if they buy 15 times your earnings, when they trade their shares, they're getting 20. The day they buy you, they've increased the value of your company to them because your earnings

00:21:29 Kevin Mako: are worth more to their shareholders than they are to you. So that financial mechanics, you got to start early though. I'm giving that advice, which is go look at that

00:21:40 Kevin Mako: now. Go see now where your lane is and where those kind of financial metrics play out. then you can decide, okay, this is how much money I really need to set aside to put that new

00:21:52 Kevin Mako: machinery, new equipment, new automation, even sometimes new staffing.

00:21:58 Kevin Mako: Staffing's a bit of a question mark, but not so much so, because outside consultants can actually substitute for getting

00:22:05 Joe Cecala: you over the hump and it's not permanent payroll for you. So getting outsourced help is extremely valuable to including that hardware and that automation process. If you can get outside help to put it there. It's not a permanent expense.

00:22:20 Joe Cecala: And then it really helps your profitability down the road once it's implemented. Yeah, great advice, Joe. Look, you've done a ton of research. I mean, to the point where you have a white paper published in the Oxford University handbook on IPOs,

00:22:36 Joe Cecala: you've really studied for many years, 10 years and more beyond in your history before that. But really, you're aggressively targeting 10 years research into how companies increase their value. How do they grow from being ultra startup, you know, a home inventor with a

00:22:51 Joe Cecala: new gadget that they're just starting to sell? How does that company, you know, essentially jump forward and accelerate quickly towards those public valuations and then even into those

00:23:02 Joe Cecala: public valuations? So why don't you just tell everybody a bit about what you're working on with Dream Exchange because it's very exciting and how that ties into what we're talking about today. Right. So we are creating,

00:23:16 Joe Cecala: there's actually new legislation in Congress called the Main Street Growth Act, which will allow for a brand new type of stock exchange really dedicated to this very market. I actually call it the Rust Belt.

00:23:29 Joe Cecala: All these Midwest manufacturing companies, there are thousands of people who make things, and they just don't really have access to any public capital. So when we did our research, we were looking at what are the character

00:23:42 Joe Cecala: of these smaller companies that do make it. So let's look at all the success stories. They obviously did something right. And actually, everything we've talked about today, I would say, is number one.

00:23:54 Joe Cecala: The number one thing is making sure that you actually put your processes in place, get your hardware and your equipment in place, and get your staff and your planning in place. That's number one.

00:24:06 Joe Cecala: After that, there are other things that factor in, like, do you have outside director Do you have key people who are in your industry that are willing to serve on a board, even if it's an advisory board, find those people.

00:24:19 Joe Cecala: Make sure that you write down your financial data and your business plans so that you can be transparent with the market eventually, because eventually you might need to file securities filings. So there are a number of those types of characteristics in the white paper that will tell you

00:24:34 Joe Cecala: if you are, and Jefferson is a perfect example. It's a very small company.

00:24:39 Kevin Mako: we implemented these plans. They graduated.

00:24:44 Kevin Mako: Eventually they became a public company, graduated to the NASDAQ Stock Exchange, became part of the Russell 2000. And those owners who held their private company and didn't have any liquidity, like that negotiated sale when you're going to go exit

00:24:59 Kevin Mako: and you're really looking at Big Co buying you, well, if you're a public company, you really remove all their leverage. Because if you want to sell some shares next week and get your liquidity so you can put a deck on your house or buy a car or pay for your kids

00:25:11 Kevin Mako: college well that market doesn't exist the dream exchange is creating that market we're we're the inventors of what's called the secondary market for the very small company and we're really

00:25:23 Kevin Mako: targeting the small business manufacturing sector so that public equity is going to give you more leverage than just dealing with big co or just dealing with uh you know your private equity

00:25:35 Kevin Mako: your VC or some other strategic buyer. This is another lane that no one's playing in that we're going to open up. I see in just the area I can drive to from my home.

00:25:47 Kevin Mako: There are 6,500 companies that would fit into the manufacturing eligibility for our new exchange. This is amazing. Thousands of companies, yeah. And I think what's so incredible, too, even if you're just at the early stages of

00:26:01 Kevin Mako: developing a product or you're just starting to get to market, what's happening is,

00:26:06 Kevin Mako: is like something like dream exchange, but also all the other infrastructure things that are coming around, financing coming down, companies acquiring more small companies, all this sort of stuff,

00:26:16 Kevin Mako: is accelerating, rapidly accelerating that growth trajectory for great products or great manufacturers, great companies, that sort of stuff. So this is amazing that even if you're at the early stages, what's very exciting, what you should be looking forward to is saying,

00:26:30 Kevin Mako: like, okay, I'm building this thing from scratch. I've got my new hardware product. do I start to look forward to say, look, let's start when it's easy, when it's just one person and their product. Let's start thinking about these processes, thinking about these investment

00:26:44 Kevin Mako: rounds coming forward, starting to get the customer reviews and all that sort of stuff, making sure people love your product. And I'm thinking, okay, well, if I'm going to scale and

00:26:54 Kevin Mako: grow this product, what are the steps that I need to take? And how do I do that in a way that is,

00:26:59 Joe Cecala: as we talked about earlier, automated so that I get more and more attractive to bigger funding rounds, which are then going to lead to high growth, big scalability, and potentially even

00:27:10 Joe Cecala: getting you to access to public markets. As that happens, valuations all the way down, you know, trickles all the way down to the very early startup, their valuations are going to increase because these tools are helping them get further ahead. But this also helps you

00:27:25 Joe Cecala: paint the picture to say, look, you can be a great organization. If you want to, want to be the next big product, the next big thing. There's a lot of tools, a lot of resources,

00:27:36 Joe Cecala: as long as you're planning ahead and using some of the best practices of today, 2021, not the best practices of 20 years ago or even 10 years ago, things that are happening today. So stuff like

00:27:46 Joe Cecala: Dream Exchange, being able to give very small companies access to that public funding, I think, is a double-edged sword. One, the public gets great opportunities to invest far earlier in great

00:27:58 Joe Cecala: companies and be part of that scaling growth. It's not just reserved for private equity or angel investors or all your series investors. Now,

00:28:06 Joe Cecala: regular people can get involved, right? And then secondary for these companies, it gives them much more fair valuation so that they are getting valuation, so they are getting an ROI that is getting at least closer to some of those big corporate

00:28:18 Joe Cecala: EBITDA numbers and whatever else, EBITDA multiples in addition to that, right? So, Joe, amazing what you're doing? What's the easiest way that people can follow what you're up to with Dream

00:28:28 Joe Cecala: exchange and everything else that's going on going on to to track us i mean obviously our website excuse me is dreamex d r e x.com so everything we're doing can be access there but another thing

00:28:42 Joe Cecala: you can just look up is called dream x connect uh we built a social media site for the small business company and the small business investor where you can go and put your company profile there you can

00:28:55 Joe Cecala: upload videos you can upload uh you know powerpoints we have a menu driven environment just like facebook you know you select down and you know what school did you go to well we've designed for the small

00:29:08 Kevin Mako: business um and and some of it you'll see there are specific questions to manufacturers where you can just pull a menu down put your company profile there and then you can also do a bullion search

00:29:19 Kevin Mako: you can search for investors angel investors uh for strategic partners and

00:29:24 Joe Cecala: meet each other and we have a messaging board you can go offline it's a free social media site for for the small business that i think is the primary way if you're a small business owner today

00:29:36 Joe Cecala: to get started in this kind of the dream exchange movement i mean the dream exchange is kind of an idea whose time has come for everything kevin just outlined it's like you know how do you even

00:29:45 Joe Cecala: find that small company if you wanted to invest in it and if you're the small company you know your rolodex or your relationships are really

00:29:54 Joe Cecala: limited by who you know and who you can call to get access to investors. So even DreamX connect as a social media platform.

00:30:04 Joe Cecala: And I think right now we've eclipsed like a thousand users and you know, we're probably out. It's probably 90 days old. But we're going to have a thousand identities. We will have thousands of identities in the social media platform where if you're

00:30:17 Joe Cecala: looking for capital or you're looking for a strategic partner and you want to do it in a safe environment where you choose how much information you give and get in communication. That access,

00:30:28 Joe Cecala: the word access is kind of our middle name. So DreamX Connect is one of the best ways to start participating in the Dream Exchange kind of movement. And you can find that through our website as

00:30:40 Joe Cecala: well. Well, Access is key. So much appreciated for all your efforts and putting all this together. It's quite an exciting platform. I just Google it here, Dreamexchange, dreamex.com, or just Google

00:30:52 Joe Cecala: Dream Exchange. It was the first thing it popped up. Joe, thanks so much for sharing your insight with the hardware startups everywhere. Appreciate you being on the show and I hope to hear from you again. Yeah, great meeting you. Hope I helped your folks. Absolutely. Thanks, Joe. Take

00:31:06 Narrator: care. You too, Kevin. Bye-bye. Bye-bye. Thanks for tuning in to this episode of the Product Startup Podcast, the show that teaches you what it really takes to bring your product to market and turn it into a big

00:31:18 Narrator: success. This podcast series is brought to you by Mako Design. and invent, the original and leading firm in North America to provide global caliber

00:31:27 Narrator: in-to-end physical consumer product development to startups, inventors, and small product business clients. If you're looking for product development help on your invention, head over to Mako-design.com.

00:31:40 Narrator: That's m-a-k-o-design.com for a free consultation from one of MakoDesign's Ford Design Studios from coast to coast. Thanks for listening and see you next time.