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How To Raise Capital: Startup Funding Explained -Robert Kiyosaki


(upbeat music) – [Narrator] This is
the Rich Dad Radio Show, the good news and bad news about money. Here’s Robert Kiyosaki. – [Robert] Hello, hello,
hello, it’s Robert Kiyosaki on the Rich Dad Radio Show, the good news and bad news about money, and today we have a very exciting program for all of you out there
who are entrepreneurs or maybe have a great
idea for a new company, or you’re just out of money, just don’t know how to get
your idea off the ground. So every time I talk to an
entrepreneur they always say “Well, I got an idea but I got no money.” And so this program is for you, and I think it’s a timely
program, it’s much needed from many, many angles, you know, from socially
conscious to being aware, and being aware of all the changes that are going on in the world today and make sure that you’re participating in the changes and not being
wiped out by the changes. Any comments, Kim? – [Kim] Well, I’m very
excited about today’s show, and we’re going to get started right away, because you know we’ve often
said that one of the solutions to the whole economic
problems is entrepreneurship, and there needs to be more entrepreneurs, more small start-ups taking the lead. And our guest is very very well known, he is the co-founder of AOL, Steve Case, and he is now the chairman
and CEO of Revolution, and we’re going to talk
about what Revolution is, and it’s all about creating entrepreneurs from areas that most people don’t think entrepreneurs come from. And he’s really giving
them a shot to get a start. – [Robert] I’m very proud to
say Steve is a fellow Hawaiian. You know Kim graduated from
the University of Hawaii, and I’m, I grew up in a little
town called Hilo, Hawaii, where Steve’s parents
are from, I understand, but you can become an
entrepreneur even from Hawaii, that’s what we’re trying to say here. So Steve, welcome to the Program. – [Kim] Welcome, Steve,
thanks for being here. – [Steve] Mahalo, great to be with you. (laughs) – [Robert] Nice, thank you. So tell us, what are you up to these days? I mean after AOL and all that, I mean, what is driving you, what is that entrepreneurial juice doing inside of you right now? – [Steve] Well first of all
it’s great to be on the program, and thanks for all you’re
doing to talk about the topic and to educate people. Now for me, the AOL journey
which started over 30 years ago, we started the company in 1985, and only 3% of people were online, and those 3% were only
online one hour a week, so it was pretty early days, that whole idea was
leveling the playing field in terms of access to information, and education and communication, and obviously the
internet had that impact. The last decade I’ve
kind of shifted my focus to trying to level the playing field in terms of opportunity, so
everybody who has an idea kind of has a shot at the American Dream, and can take that idea and run with it. You said in your intro that the start-ups are the big job creators in this country, it’s not the small businesses,
it’s not the big businesses, it’s the young, high-growth businesses, but it’s harder for entrepreneurs in a lot of parts of the country to get the attention
they need, to raise the, you know, capital they
need to take their idea and turn it into a kind of real business and have real impact, and so
that’s what we’re trying to do, by launching this initiative
we call Rise to the Rest, trying to back the
entrepreneurs in the cities, and all around the country
that have great promise, but are not really getting
the same level of attention or the same level of
adventure capital that places on the coast are getting. – [Kim] And what Rise of the Rest mean? – [Steve] Well first of all
I should say the concept of Rise of the Rest was
popularized over 50 years ago by Fareed Zakaria, journalist who wrote about how globally there was
going to be a dynamic shifting where countries like China
and India would rise, and that the United States would fall, but there would be kind of
a shift in terms of where a lot of the investment focus was, and obviously that has happened
over the last 50 years, we see a similar dynamic
within the United States, where right now a lot of the focus and most of the venture
capital is in places like the Silicon Valley, right? The sense now is if you want
to do something innovative, you have to leave where you grew up, leave where you went to school, and head to California or maybe New York, or maybe Massachusetts,
and then the investors, the venture capitalists
have followed that. So last year, you know, believe it or not, 75% of venture capital in this country went to just three states, California, New York, and Massachusetts. The other 47 states fought over 25%. These are big states,
like Ohio, Pennsylvania, Virginia, Michigan, all got less than 1% of venture capital last year. California alone got 50% last year. So the entrepreneurs in California get every week, in terms
of venture capital, what the entrepreneurs in
some of these big states get every year, and the result is we’ve had a brain drain, a lot of people have left
where they wanted to be to go to the coast, because that’s where the
Land of Opportunity was, and we’re trying to shift that, if we can venture capital
backing entrepreneurs everywhere, and people can choose
where they want to live, or stay where they already are and build a great company there, and create a lot of jobs there, and drive a lot of economic growth there, that we think will create a more inclusive innovation economy where
everybody kind of feels like, at least more people, feel
like they have optimism about the future as opposed to feeling like they’re being left behind. It could help revitalize
some of these cities, so I think it’s both
an investment strategy, just because so few people are investing in these entrepreneurs, and in other parts of the country, valuations tend to be a
little bit more modest, so as investors, I think we
can generate a better return, as an arbitras opportunity, if you will. But there’s also an impact opportunity, because if we back these entrepreneurs and they do scale, they do have success, it can really transform the communities in which they’re serving,
slow that brain drain, create a boomerang of talent,
people coming back home because the opportunity
is back where they started as opposed to where they had to go. – [Robert] And you know,
Steve, for those of you who are entrepreneurs or
who are looking for funding, and all those, all the pains that an entrepreneur goes
through when they want to leave, you know, job security,
Steve is the author of a book called The Third Wave, and it was, that was a very similar title to Alvin Toffler’s book, The Third Wave, and what Steve is talking about, this information age, is now finally, which is the third wave, first wave was agrarian,
second wave was industrial, and third wave is technology. And the third wave is finally hitting. People like you and me, people who are not necessarily techies, or Silicon Valley or New York type people, the third wave is now
hitting entrepreneurs, so I love it in your book,
Steve, The Third Wave, you talk about how the third
wave will have similar, you talk about how computer coders started multi-billion dollar companies, starting technology companies. But now the third wave finally
washes out of technology, and the third wave will
have similar stories, but for founders who are
not twenty-something, but thirty-something. Farmers, teachers, doctors,
chefs, and artists. In other words, regular people
will now for the first time be eligible or in the right position to take care of what Toffler
called the Third Wave. And this is when technology is applied to regular human beings. And so, Steve, your book is fabulous, it’s The Third Wave by Steve Case, for those of you that really
want to be entrepreneurs, see what’s going on,
please read this book. That’s basically what
you’re saying, right Steve? So like a schoolteacher
could become an entrepreneur, now, you think technology. – [Steve] Yeah, I think that first of all, as you had mentioned, one of
the most, the books I loved, when I was younger, was Alfin
Toffler’s The Third Wave, you know, I read it more
than four decades ago, I was still in college
in the late seventies, and I really, it really
kinda opened my eyes to what was going to come and stick with this
whole digital revolution of the Internet, things like that, and I had the opportunity
to spend time with him and even before he passed
away, he read my Third Wave, which was more of the
wave of the internet, and as you said, there’s opportunity now. The first wave was really,
the Internet was really getting everybody connected,
companies like like AOL, the second wave, most
of the last twenty years has been building software apps services on top of the Internet,
things like Facebook, and Google, and so forth, and so it really required
coding as sort of the key skill. And the third wave is the Internet kinda meets everyday life, and it
really does have the opportunity to improve how we think
about healthcare and learning and food and agriculture and smart cities, and all kind of things, arguably
the most important things of our everyday lives, that changed a little
bit in the first wave, maybe a little more in the second wave, but they’re gonna change a lot in the next ten, twenty
years, in this new third wave, but what’s going to be different, I don’t think a lot of
people fully appreciate it, having lived through
the first wave with AOL, and then the second wave
backing entrepreneurs at Revolution, I think the playbook for
entrepreneurship is changing, and that notion that
you have to be a coder is going to give way to the idea that having domain expertise, understanding how to help your work, understanding what happens in a classroom, understanding the food system, you know, some of the things
that farmers and chefs and others have to deal with, that’s going to become more important. The technology, the software’s
kind of the table stakes, just to get in the game, what’s going to really separate
the winners and the losers is having this expertise, having the ability to forge partnerships, I think in the third wave
it’s not just about the app, it’s about how you
integrate that technology, in systems, healthcare
systems, other kind of systems, there will be policy implications, you know a lot of these
sectors are regulated. I think that plays into the
hands of these entrepreneurs in what we call these
Rise of the Rest cities, because if you look at where
the expertise is in farming, it’s not in San Francisco
or New York City, it’s in places like St.
Louis, and Lincoln, and Omaha. You look at the expertise
in terms of healthcare, some of the most respected institutions are like Johns Hopkins in Baltimore, or the Cleveland Clinic in Ohio, or Mayo Clinic in Minnesota,
or MD Anderson in Texas, and so partnerships with
those kinds of companies are going to be more and more
critical in this third wave, so I think that the
mentality has got to shift from just writing code to really imagining a
different and better world, getting the right team
together, obviously, to implement that, and recognizing what happens around your company in terms of the network you build, the partnerships you forge, are going to be far more important in this next wave than
it was in this past wave. – [Robert] So you know, really, really, thank you for saying that, by the way, you know, Rich
Dad is a global company, and that means all over the world, people are listening to what
you’re saying right now, and I’ve always wondered why
these young people sit there, they go, you know, “I
can’t do what I’m doing “because I don’t have
any money and all this,” and I’m going, “You have access “to something I never had access to,” was the Internet and all this stuff, young kids have more in their iPhone than the big Sperry UNIVACs
I used to work on in college. And they still say I can’t do anything. – [Kim] So Steve, you’ve
got an impressive, impressive lineup of investors who are investing in these companies and these entrepreneurs. How do you go about it, Revolution, how do you go about finding
these entrepreneurs? – [Steve] Well, we hit the road, we launched Rise of the Rest, we’ve now done seven bus
tours across the country, 38 cities, I think it’ll be
something like 10,000 miles, and it’s really all over the country, places like you know,
Phoenix and Albuquerque, and Madison, and Minneapolis, and Atlanta, and New Orleans, and
Buffalo, and Philadelphia, you know recently we did a southern swing, cities like Memphis and
Louisville, Chattanooga, and we just spent time
meeting entrepreneurs, we just try to engage
people in the community, the mayors, the governors, the
CEOs of the bigger companies, the universities, you know, presidents, to really try to celebrate
entrepreneurship, you know, focus more attention on startups and try to get more venture capitalists backing those startups and so we did, as you mention, put
together a great group, forty or so of the most, you know, prominent and respected
entrepreneurs and investors and executives in the country. You know, people like
Jeff Besos of Amazon, or Howard Schultz of Starbucks, some of the private equity
investors like Ray Dalio, and Henry Kravis, David Rubenstein, some venture capitalists like Jim Breyer, and John Dore, Meg Whitman, Tori Burch, Sara Blakely, it’s a great list,
of some of the real leaders in innovation of the past several decades, who all agree that
innovation is dispersing, it’s not just going to be on the coast, it’s going to be all across the country, it’ll be all around the
world, and wanted to join us, in backing this next
generation of entrepreneurs. And we’re excited to hit the road again at the end of April into early May, we’ve got a trip with
four cities in Florida, Orlando, and Tampa, we’re
going to the space coast, so Miami, and then we’re also
going to fly to Puerto Rico, and really shine a spotlight on what’s happening in those places, if people listening want
to learn more about it, we have a website, riseoftherest.com, where you can get more information. Now if there are any entrepreneurs who are particularly
interested in space technology, or drones, or any kind
of aviation technology, we’ll be doing our visit to
the space coast in early May, we’re inviting entrepreneurs
from anywhere in the country who are focused on that
sector to apply to pitch, and then we’re going to fly
them to the space coast, have a Rise of the Rest
pitch competition there, and the winner will invest in. So it’s very exciting to
see the diversity of ideas out there, the diversity
of entrepreneurs out there, and to see firsthand
what’s happening in cities all across the country,
it gives me great optimism about the future of the country, but we gotta back everybody
and not just a few, there’s a saying I’m sure you’ve heard, that talent is equally distributed
but opportunity is not, we’re trying to change that paradigm, we’re trying to level that playing field. – [Kim] And as these
pitches are being done, what do you look for? What makes one pitch better than another, or why do you choose one
company over another, one entrepreneur over another? Is there a formula or is it
just, are they all different? – [Steve] Well they’re all
a little bit different. We back 110 companies in 60 cities over the last several years through this Rise of the Rest initiative, and it cuts across a lot
of different sectors, of course there’s a lot of tech companies, we’ve also backed food companies
and clothing companies, and all kinds of different
things, so it really shows that there are a lot of
innovations happening, a lot of creative
entrepreneurs doing all kinds of different things. What we’re looking for, obviously, is a great idea, something that
really can change the world, something to improve people’s lives, we’re looking not just for an entrepreneur but the team they’re building around them. We’ve learned that
entrepreneurship is team sport, we’re looking for some evidence that, you know, the mice
are eating the cheese, that people actually are, you know, there’s product market fit, there’s some interest in this, and we’re really looking for
a mindset around partnerships, because of the importance
in the third wave, of working together, there’s
a great African proverb that I think will define this third wave, it’s that if you want to go
quickly you can go alone, but if you want to go
far, you must go together, so we’re looking for entrepreneurs who, it’s not just about what they’re
doing within the company, although obviously that’s important, but the other things they’re doing with partnerships they’re forming, networks they’re building
around the company, to take their idea and
really give it the scale. – [Robert] Yeah that’s fantastic about team versus individuals, it’s one of the hardest concepts
I have talking to people. And by the way, you know, congratulations, your book is the third
wave, and your website, I have down here as revolution.com/ROTR. – [Kim] Rise of the Rest. – [Robert] Rise of the Rest. So it’s revolution.com/ROTR, for those who want to find out more about what Steve is doing, to give entrepreneurs
all over this country, and ultimately all over the world, a chance at the ring, as they say, so all of you, you don’t
have to be a techie, you don’t have to be a coder, you don’t have to be a programmer, but you do have to have a great team. And that’s one of the
biggest mistakes people make. Wouldn’t you say that’s true, Steve? They don’t have a team behind them. – [Steve] Absolutely. And a diverse team. You need different perspectives. If you just bring together
people that look like you, and think like you, and act like you, then you’re not gonna really understand the broader opportunities
on the marketplace, so having a team that really in some, some, obviously, if it’s a tech startup you need some of the engineering talent, but you also need people that are good at sales and marketing, and storytelling, and you
need people that are good at the operations side, good
at the customer service side, good at the finance side, so it really requires,
just like in any game, you know, winning sports teams, not everybody is the
quarterback, you know, the quarterback in this
case is the entrepreneur, the CEO, but the winning startup teams, just like the winning sports teams, have a mix of different skills. Some are playing offense,
some are playing defense, some are running the ball,
some are passing the ball, some are blocking it, you
need everybody on the field to win in sports, to win in startups, frankly to win in life. – [Robert] I have one quick
question before we go on, okay? It’s been my question. What is the thing with Shinola,
you know, Detroit company. Every time I see that
brand I go, “Who the heck?” Then I find out you’re behind of it. – [Steve] Yeah, it was the great
entrepreneur Tom Kartsotis, started this company called
Fossil and then exited that, and then was, this was
five, six years ago, was reading Detroit, one of
America’s greatest cities, you know a hundred years ago, arguably kind of like
Silicon Valley is today, when cars were the hot
technology of the time, Detroit was rocking and rolling. It kind of lost its way
in the last half century, sixty percent of its population left, and it went bankrupt. You know, Detroit was
fighting its way back, the downtown area was getting revitalized, and he decided to start
this company, Shinola, to basically retrain auto
workers who had lost their jobs, at the Ford plant or the GM plant nearby, and retrain them to build watches and other kinds of products, and that’s turned into
quite a significant company, it’s an example of a
company that obviously is trying to build a big business and having to be a
profitable, valuable business, but also sees the importance of having purpose and having impact. – [Robert] A mission. – [Steve] In this case, creating jobs in a city that needs jobs, and creating hope in a
city that needs hope, is really as much of what Shinola’s about, as the actual product, which
is the watches themselves, so we’re very proud to be
associated with that company, that’s an example of a
Rise of the Rest company, a city like Detroit, that as I mentioned, has a glorious past, it’s had
a difficult couple of decades, but it’s really fighting its way back, it’s really starting to show
signs of a great resurgence, and it’s companies like Shinola that are helping lead the way, which proves that a
startup, a young company, when they scale, end up
really creating a lot of jobs, every big company, every
Fortune 500 company, starts as a startup, so we
have to think of these startups almost like the seed corn,
you have to plant them, and fertilize them and love them, and some of them are going to end up being your iconic, gigantic
companies of tomorrow, and if we don’t do that everywhere, we only do that in a few places,
particularly on the coast, we’re going to create
a more difficult divide in this country, from people who feel like they have a shot at the future as opposed to people feeling
kind of left out, left behind. – [Robert] You’re so right,
and I agree with you wholly. When we come back we’ll
be talking more to Steve, along with one of those startups. He’s going to talk about
how it was to meet Steve and how to get his company,
you know, off the ground, and become this multi-multi-multi-million
dollar business, not just with money, but with support from great entrepreneurs
like Steve Case and his team. So when we go back we’ll be
going further into Steve Case, and once again his book is The
Third Wave, came out in 2016, his website is revolution.com/ROTR. (upbeat music) – [Narrator] You’re listening
to the Rich Dad Radio Show, with Robert Kiyosaki. (upbeat music) – [Robert] What is your
number one expense in life? Your number one expense? It’s taxes. And I get asked the question, how come there’s no financial
education in school, but why isn’t there
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advisor Tom Wheelwright, we’re talking about revision
for his book, Tax Free Wealth. Welcome, Tom. – [Tom] Thanks, Robert. – [Robert] So what’s the
Tax Free Wealth about, what’s different this time? It’s a revised edition. – [Tom] Well, so, what we did was, this is the first major tax reform we’ve had in 30 years, 2017. – [Robert] Right, was ’86 the last one? – [Tom] ’86 was the last one, back when I was in Washington DC. – [Robert] So many guys got wiped out because of that tax reform. – [Tom] They did, they did, it
wiped out an entire industry, savings and loans. This new tax lot is just as big, but in a very different way, it affects different industries, you know the tax laws always
a series of incentives, and the question is always, which ones apply to me, and so the key to revising
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take advantage of and, I mean, seriously, the amazing incentives, for example I mean,
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corporatedirect.com (upbeat music) – [Narrator] It pays to listen. Now back to Robert Kiasaki
and the Rich Dad Radio Show. – [Robert] Welcome back to
the Rich Dad Radio Show, the good news and bad news about money. You can listen to the Rich
Dad Radio program anytime, anywhere on iTunes or Android, and all of our programs are
archived at richdadradio.com. We archive them because
repetition is how we learn best, you can’t learn to play golf
swinging the golf club once, so you listen to this program
once, twice, three times, you learn even more, but most importantly, share the Rich This
program with Steve Case to your friends, family, and
especially business associates. Very important program. So today, again, our guest is Steve Case, and he is the author of The Third Wave, please get his book, especially
if you’re an entrepreneur, and his website is revolution.com/ROTR. And Steve is now joined with Craig Fuller, he is one of the startups that
Steve and his team funded, and Craig is the founder
and CEO of Freight Waves. – [Kim] So welcome to the show Craig, Steve, why don’t you introduce, why don’t you introduce
Craig and why he became– – [Steve] Yes, as I mentioned earlier, we’ve been doing these
Rise of the Rest bus tours for five years, we’ve visited 38 cities, our most recent tour included
a stop in Chattanooga, we were interested to see
what we were going to see firsthand on the ground there, and we did a pitch competition of some great, great
entrepreneurs doing great things, but the one that really stood out, and outweighed the pitch competition, is Craig’s company, Freightwaves. And what was surprising to me,
and it goes back to the core of our Rise of the Rest secrets, is what they’re building at Freightwaves is sort of a Bloomberg platform, a data platform for the freight industry. And the surprise to me was that many of the largest trucking
companies in the country are based in Chattanooga and most of the freight
goes through Chattanooga, or near Chattanooga, and so
having the domain expertise that we talked about
earlier as so important in the third wave, is key, and Chattanooga is the
best place in the country to build a startup focused
on the freight industry, so that’s why we backed Freightwaves, and it’s grown quite rapidly
since we invested last year, and it’s great to have Craig join us. – [Robert] Welcome to the program, Craig. – [Craig] Oh, glad to be
here, thanks for having me. – [Robert] So what’s it like to work with Steve and his team? – [Craig] You know, Steve and
his team have been fantastic to work for, I think they’re
big champions of businesses that are in non-traditional
startup communities, and I think they have a playbook not only for the company they invest in, but also the community
that they are a part of, that helps to create the ecosystem that encourages the business
and helps it develop. And I think that’s probably
been most beneficial to us. – [Robert] So I’m going to
ask a politically incorrect, how much money was raised for you? – [Craig] Oh, in, in what
Rise of the Rest that we won? – [Robert] Right, right, right. – [Craig] 100,000 is what we won, and then there was an
additional adjustment made on top of that. – [Kim] And Craig, were you
looking for capital before, before Steve and Revolution came along? Were you having trouble getting funding, or making your pitches, because
you were in Chattanooga? – [Craig] No, actually,
we had the opposite. We actually had closed our Series A, and we happened to win the
Rise of the Rest competition, and actually our round was
in the process of closing, within the next week, and so actually, Rise of the Rest was a late
addition to the cap table, and we sort of looked
at it as an opportunity to expand our brand, and
I think one of the things that’s sort of
underappreciated about Steve, and the tour that’s done,
is it’s not so much for us, about getting national recognition, because we already had that,
had high-quality investors that were already part of the cap table, but it was more getting
the community itself, the city of Chattanooga
to understand what value we were bringing to both the
city as well as our industry. – [Robert] And how many jobs have you created in Chattanooga? – [Craig] We’re at 85 today, according to the Chamber of Commerce, we’re the highest paid employer
in the city of Chattanooga, on average, and so I
think it’s a testament to having a high-quality business, that our customers don’t
care where we’re located, they’re not going to pay us any less because we’re located in Chattanooga, but there is a bit of an arbitras, where we can provide
Silicon Valley benefits and salaries that may not
be Silicon Valley level, but the quality of life
and what it can mean to the individuals is greater, because the money goes a lot further here. – [Robert] So Steve, how
important is that to you, what Craig is talking about? – [Steve] It’s very important. Our whole goal is to invest in companies that we think are going to be successful, because we obviously have investors in our Rise of the Rest fund, and we want to generate great returns, and if we do generate great returns, that way other venture capitalists who are mostly focusing on
entrepreneurs on the coast, will start paying
attention to entrepreneurs in other parts of the country. You know, as I mentioned before, the venture capital gap between the coasts and the rest of the country
is still pretty significant, you know, Tennessee
last year, for example, and not just Chattanooga
but also Nashville, and other parts of Tennessee, got about 1% of venture capital, and so
we have to figure out ways to get more capital to
Tennessee to back more companies like Freightwaves, and for some companies, our investment is a catalyst
that helps them raise money from others, and in other
cases it’s a catalyst to get more national attention,
customers and others. In the case of, as Craig
said, with Freightway, they had good progress
on both those fronts. But they actually were
not as known and respected within their own city as we
thought they, they should be. It was one of the companies
that was really growing but most people in Chattanooga
were unaware of it. And many parts of the country
including in Chattanooga, you know, tend to be a
little more cautious, almost risk-aversive on entrepreneurship. And we need to create more
of that sense of possibility. And so that’s what, you
know, the success of, of companies like Freightway
in places like Chattanooga lead to and in the future, the next entrepreneurs coming behind Craig hopefully will have a little easier time because more people in
the Chattanooga community recognize the importance of entrepreneurs and really believe their city can birth the next big company as much as, you know, FedEx was birthed in Memphis, Tennessee. And turned into a
gigantic, global company. So it’s not just the entrepreneur’s place like Silicon Valley or New York City, it’s not for everywhere like in, like Craig in Chattanooga. – [Robert] So what you’re saying
is success creates success but it also creates a, a brain pool for other entrepreneurs to tap into. – [Steve] Absolutely,
momentum begets momentum. We saw this in the Washington DC area when we started America Online, AOL, there 34 years ago. It was not a very entrepreneurial area. It was mostly government,
government contractors and law firms and lobbyists. But now there’s a pretty
strong tech community, pretty strong startup ecosystem in the greater Washington area. And indeed, that’s part of
the reason Amazon picked it for their second headquarters. And that’s because of the
dynamic you’re mentioning, you know, momentum begetting momentum. As these companies get
larger, some people then leave and wanna start new companies. Or some of them make
money on stock options and can fund new companies. And so you need to get that momentum going to really create strong– – [Robert] Yeah, so what’s
fan, what’s fantastic, you’re a hardcore capitalist. A very, very hardcore,
I’m glad to hear that. So Craig, thank, you know, congratulations on your success for Freightways. You brought up the name Amazon. I gotta ask you this. What did you think about
them leaving New York? (laughing) – [Craig] Well it’s, it’s complicated. (laughing) – [Robert] You got 20 seconds
to explain why it happened. (laughing) – [Craig] Well I think, I
mean, from my perspective, it, it wasn’t, I was
surprised they picked, Amazon picked New York to begin with. And so places like Tennessee are gonna, are gonna welcome Amazon and
the economic growth they bring. – [Robert] So, but they went
into socialist headquarters. (laughing) – [Steve] Yeah, there is, there is, there was some, there was some backlash that they hadn’t expected. But I, I agree with Craig. The fact that they started the search for another headquarters, 238 cities all around the
country focused on that bid. You know, there are a lot of cities where I think it would have done, it would’ve been better for Amazon and better for the, you know, the city. But hopefully the cities that
didn’t get Amazon headquarters will take half of the money they were willing to put
on a table to get Amazon and half of the energy they
put in their bid to get Amazon and re-focus on their startup community. If they do that they can
create the next Amazon. – [Kim] There you go. – [Robert] Yeah, so Craig
Fuller and Steve Case, I wanna congratulate you on your hardcore capitalistic venture via
education and money and expertise. So thank you for what you’re doing. – [Steve] Thank you Robert
and Kim and thank you, Craig. – [Kim] Thank you Steve, thank you Craig. And please go to revolution.com/ROTR,
Rise of the Rest. And if you wanna be, get,
have Steve hear your pitch, start practicing. – [Robert] So thank you guys. – [Kim] Thank you so much. – [Steve] Thank you, too. – [Kim] Really appreciate it. – [Craig] See ya soon. – [Kim] All right, see you on the road. (laughing) – [Robert] And when we come back, the most popular part of
our program, Ask Robert. – [Narrator] You’re listening
to the Rich Dad Radio Show with Robert Kiyosaki. (upbeat music) – [Spokeswoman] Don’t be like Charlie. Charlie is that do-it-yourselfer
who does himself in. Do it yourself is good for tile and grout, it is not good for asset protection. Charlie thought he’d save a few dollars, forming his LLC online. With no guidance, he did it wrong. When he sold the property, he
lost thousands and thousands of dollars, he did himself in
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attorney for asset protection. He and his team will do it right. Visit them at corporatedirect.com, or call 800-600-1760. Mention Rich Dad, and receive $100 off of your formation fee. That’s corporatedirect.com,
corporatedirect.com. (upbeat music) – [Narrator] Financial freedom begins with financial education. Now back to Robert Kiyosaki
and the Rich Dad Radio Show. – [Robert] Welcome back, Robert Kiyosaki, the Rich dad Radio Show, the good news and bad news about money. You can listen to the Rich
Dad radio program anytime, anywhere on iTunes or Android. And all of our programs are
archived at richdadradio.com. We archive them for one reason, it’s so you can listen
to this program again. Because repetition is
how you’ll learn best. And today’s program, if
you’re an entrepreneur, is essential to listen to again but more importantly with friends, family, and especially business partners. Because if you listened to
this program with Steve Case, founder of AOL and author
of the book The Third Wave, which everybody should get
if you’re an entrepreneur. It’s a great book. Get the book, read it, discuss it, and you’ll learn 10 times
more than you just did in this last hour listening
to the Rich Dad Radio Show. Any comments, Kim? – [Kim] Well, I just
wanna thank Steve Case. I love what he’s doing
with revolution.com. It’s like, it’s like Shark
Tank but on steroids. (laughing) I mean, he’s got an amazing team of investors that are backing this. And you know, one of the things that we didn’t talk about is, he also partnered with J.D. Vance, who wrote the book Hillbilly Elegy. And Vance was a Silicon
Valley venture capitalist who also wanted to help the
people like Hillbilly Elegy and so they, they linked
up together to really make a change in a part of the world that’s not seeing a lot of change. – [Robert] Just what Trump
called fly-over country. – [Kim] Yeah, fly-over,
yeah, fly-over states. – [Robert] So there’s a lot of people focusing time and energy on them. And Steve’s been there
for a number of years now. That’s why his company,
Shinola, out of Detroit, which I thought was very interesting, as he says it’s one of
his biggest investments. But there’s also a social cause to it, which is important to note, it’s because he’s there not just for the money but to make jobs for out of place workers. So all you socialists
and communists out there, not all capitalists are bad. You know, I got so sick and tired. I was in Hawaii, which is a communist republic of the United States. You know, there were talk, this guy was so angry at rich people. His, in his mind every,
every rich guy was a crook. I’m saying, “No, that’s only in Hawaii. “The politicians are crooks, you know?” And they go, well, it
was almost a fist fight and we were at a luncheon,
you know, good grief. – [Kim] Well you know– – [Robert] So many people
are angry at the rich, like you know, Howard Schultz
had to change billionaire to a person of means, I mean, what the hell is going on in America? – [Kim] And if you, and if you go back and listen to this
interview with Steve Case, he talks about the
things that he looks for. And there were like four things. The first was an idea, a team, but the third thing he
looks for is a product, an idea, a company that wants to change the world and wants to make a difference. – [Robert] Yeah. – [Kim] So there is that social aspect, that social capitalist inside of him. So it’s a, it’s a huge beast. – [Robert] And I had
to ask him about Amazon leaving the communist
republic of New York City. And I’m going, “You know
what that cost that city? “You know what that cost them?” But no, the socialism and
communism are winning. You know, I was in Vietnam
fighting those people. I didn’t have to fight them in Vietnam. I could just come home. So once again, that’s why I’m
really happy with Steve Case, what he’s doing, a fellow Hawaiian. His family comes from the same place I grew up in, Hilo, Hawaii. It’s not, it is not, Hilo’s definitely not an entrepreneurial
startup country, city. But anyways, great place to live. – [Kim] And also, thanks to Craig Fuller, who was the CEO and the
founder of Freightwaves. And he was one of the companies that Steve and his team invested in and they’re doing really, really well out of Chattanooga, Tennessee. – [Robert] So you can submit
your questions to Ask Robert at richdadradio.com, so Melissa,
what’s the first question? – [Melissa] Our first question, Robert, comes from Kaitlin in San Diego. Favorite book, Rich Woman. Oh, hello, Kaitlin, good choice. Says, “Robert and Kim, I enjoy your show “and learn something
new every time I listen. “My question is really
about overcoming fear. “I started my business six months ago “and I’m worried that my growth
isn’t happening fast enough. “I’m typically not
someone who lives in fear “but in my business world I find “I’m constantly battling the
negative self talk and fear. “How do you deal with self
doubt in your business?” – [Robert] Kaitlin, that’s
probably the best question anybody has ever asked us. That is the only challenge
you got is that self talk. And the reason most
people are not successful in any aspect of life, you
know, is that self talk. Like, every morning I get
up and my first thought is, “I’m gonna go to the gym,”
and then self talk goes, “Nah, 10 more minutes of sleep.” Now, if you can’t control that
little voice in your head, get a job with the post office, you know, because you can
stand there for 50 years, not do a thing, but you’ll be safe, protected by the US government. But the major challenge of an entrepreneur is that self talk, right, Kim? – [Kim] Oh absolutely, and you
know there’s a great saying. I forget who said it right now, but if you’re not facing
something you fear, if you’re not facing
something you fear every day you don’t understand the secret of life. – [Robert] Yep. – [Kim] Because the fear is
where the growth comes from, overcoming that fear or
dealing with that fear. And it’s gonna be there
as an entrepreneur, I mean, you got problems every single day that you’re facing. And we face it all the time. – [Robert] Every single day. – [Kim] Every single day and
you gotta listen to that mind and you gotta hear the chatter and you gotta really get
that mind under control. And, and we do a lot
of, of personal growth, work on ourselves to get
our mind under control. – [Robert] Yeah. – [Kim] Or to deal with
that negative self doubt. It’s, it’s part of the program, part of the process of being
an entrepreneur, I think. And it’s one of the most valuable because that’s really where growth and transformation happen. – [Robert] Right, some
member of our team was, for lack of better words, a therapist. Not really a therapist, but
you may call him an emotional, spiritual coach to get us
through our own negativity. Because we all have it, sports fans. There’s nobody that doesn’t have it. And to think that only you
are the only one with it is really silly, another
thing I get really upset with, Steve covers it in his
book The Third Wave, he talked about he’s in
school and it’s the teachers that really force that
down your head, you know. You must have academic success and you know, don’t look, don’t overlook academic opportunities because you might make mistakes outside. And they’re punishing
you for being afraid. And you know, most school
teachers are great people. But the reason they’re school teachers is because they’re afraid, they don’t know how to
go out in the real world. That was my poor dad. And so I can gradually,
because you’re facing the number one fear of all
entrepreneurs, it’s you. And every morning you look in that mirror and you’re yapping away
at yourself saying, “Holy moly, I’m a million dollars down. “How am I gonna pay for this?” You know, I mean, I tell ya. It’s hard to brush your
teeth when you’re looking in the mirror staring at
a million dollar, think. Think, I mean, we face it
all the time, don’t we? – [Kim] Yeah, oh, all the time. You know, and one of the other
things that we’ve done too and I think of Frank Curreri
as one of our mentors, if you can find a mentor
who’s in your business, that’s priceless because
they’ve probably been through a lot of the things that
you’re going through now and faced those fears and
they could probably be a great, great resource for you. – [Robert] Yeah, and
don’t ask a school teacher about facing fear because
that’s all they do. No, I mean, my whole family,
they’re great people, wonderful people, have a new
book coming out called Fake, Fake Money, Fake
Teachers, and Fake Assets. And the number one reason
people listen to fake teachers and the number one reason
people are teachers is they can’t face that little
voice inside their head. You can do that, you got it made. So meditation works,
personal development works, having a coach, having mentors. That little voice is either
your, your greatest asset or your greatest liability. – [Kim] Amen. – [Robert] Next question, Melissa. – [Melissa] Our next
question comes from Troy in Des Moines, Iowa. Favorite book, Rich Dad, Poor Dad. Says, “Robert and Kim, I’ve been working “on my online side business
for a couple of years “and am now in a position
to officially launch. “My question is with being mindful “of how best to spin my start up capital. “I’m wondering if I should
focus first on a good lawyer “to button up my company
from the legal perspective “or invest first in a good CPA. “What’s your advice?” – [Robert] Well, I, congratulations. You’re doing that, I think wisely, keeping, to having a part time business versus a full time business. But you gotta have both is the answer, and it goes back to the first question about how you control your voice. It’s not either or, if you’re going to be, and Steve Case said also,
you’ve gotta have a team. And that’s one of the
biggest complaints I have about school teachers. They’re the lone, lone rangers. They’re gonna go out there
and do it on their own. Nobody does it on their own, but of course there are
a lot of guys that do. But you’ve got to in business have a team. And on your team, number
one is an accountant and a book keeper, you
gotta have good records for all your numbers. You have bad records, you’re in, you’re behind the eight ball from day one. So all the expenses you just went through getting the start up should’ve been, should be in your book
keeper’s office right now. They don’t cost that much. Secondly, get an accountant who can take the book keeper’s numbers. And thirdly, need an attorney to make sure you’re not gonna get sued and ripped off and your contracts are tight. So it is a team sport. You heard Steve Case
said, it’s a team sport. And the trouble I have with schools is they think you have
to do it on your own, you have to be the smartest guy in the room and you can succeed. I’m living proof that you don’t
have to be smart to succeed. You have to have a smart team though, Kim. – [Kim] And you know when we started, when we started Rich Dad Company, we had a book keeper, number one. Always had a book keeper. – [Robert] Betty, Betty. – [Kim] Betty the Book
keeper, then we had the CPA. And you know, and we had the attorney to set up our corporation the way, and our entities, business entities, the way they needed to be set up. And here’s the thing, when we started, you know, we were just starting out. So they, they were not expensive. We did what we needed to do
and as the business grew, we needed more sophisticated CPAs, more sophisticated attorneys,
so as your business grows, you’re gonna need that, but you’ve gotta get that
foundation in tact now. – [Robert] And it goes
back to the first caller, or first question about your little voice. “Oh, I can’t afford it.” – [Kim] Yeah. – [Robert] “I can’t afford it.” Let me tell you something, sports fans, the more successful you get,
the bigger problems you have, the louder your little voice gets, not only that, the more
successful you’ve become, the bigger attacks you get. There’s always somebody
that’ll oppose you, attack you, try and steal from you. So as Steve Case says, you
don’t have a good team, and it starts with Betty the book keeper. You better have your numbers, you better have your documents in place, better have agreements in place, and it’s just how you play the game. ‘Cause in this game, all
games, you’ll have opposition. And somebody will come after
you, I promise you that. If not legally, via social
media, via anything, they’ll come at you, it is
the nature of life today. That’s why I don’t call
social media, “social media.” It’s anti-social media. Today they can pummel, they
can accuse you of anything and you’re out of business. So you’d better get your team in place. So once again, you can submit
your questions to Ask Robert at richdadradio.com. I wanna thank Steve Case, founder of AOL and chairman and CEO of Revolution and chairman of Case Foundation,
the book The Third Save. Get that book, and his website
is revolution.com/ROTR. Comments, Kim? – [Kim] So if anybody’s out there, wants to look for funding,
venture capitalists, I would get to the website, revolution.com/ROTR and
see what’s going on. Because that might be a great opportunity for you as an entrepreneur. – [Robert] So thank you for listening to The Rich Dad Radio Show.

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48 thoughts on “How To Raise Capital: Startup Funding Explained -Robert Kiyosaki

  1. I like your YouTube channel because it has inspired me to start my own YouTube channel. I am motivated by โ€œYOUโ€. The passion that you have helps me to keep pushing!!! Great content as usual๐Ÿ’ช๐Ÿพ๐Ÿ’ช๐Ÿพ๐Ÿ‘๐Ÿพ๐Ÿ‘๐Ÿพ

  2. I read somewhere that large cities will eventually become unnecessary due to all the innovations, some mentioned here

  3. I want to start a business and can't find a lender. ..I just came from a meeting at a business called "score" business development office and this old man just put me down and didn't even give me a chance . He prejude me and showed discrimination towards me. His energy was so low and I have 2 business idea's but don't have the funds to start a business. I need $24000 to set me up .

  4. I need a TEAM but this is not easy to find. Really I need 24 people each donate a 1,0000 and that will give me the $24000. To get my business started. You have 2 side the RICH and the Poor .I am on the poor side so how do I make friends on the RICH side with people who will give me some funds.

  5. Why doesnโ€™t this show have millions of likes? There is a video of a man falling down in snow with 1 million likes but not this?

  6. I'm going to keep watching your videos to help me on the next level of evolution. ๐Ÿ˜Š๐Ÿ™๐Ÿพ Thank you

  7. Great stuff guys.. Im dying to start up and there is a huge market for my idea, im currently investing in crypto which will hopefully fund my business.

  8. I am so happy i came across lutherangrants/ org .They helped me with a grant of $45,000 to finance my business .

  9. Hey Robert do you really depend on the few cents you make on advertising? You always brag about how you made your money and now just want to teach others. Well guess what the stupid interruptions every few minutes don't help.

  10. Mr. Kiyosaki. Very informative stuff. Love your channel. Me and my brother have been working on a platform that does just what you are talking about in this episode. It is a company life cycle management ecosystem. It allows the third wave of entrepreneurs to do just what you're talking about. From the creation of the corporation to the formation of bylaws, raising capital all the way to selling the company. Would love to get in touch and discuss in further detail. Thank you

  11. Entrepreneurism is Fantasy in a Monopoly rigged system. It's all fake phony innovation by the rich. Have fun hooking suckers.

  12. We have a very unique strategy that is proven, precise, and entails no risk, no selling, and no MLM's. A great opportunity for entrepreneurs in all 50 states. Can be self funded. Contact me for details:
    James H. Hatland
    [email protected]

  13. The thing that gets completely glossed over is the amount of capital it takes to raise capital. I did my first capital raise last fall and it was no joke. The retainer alone to open the legal file was $8000. The legal fees to raise capital, for a good securities lawyer START at $40,000.

    How does a person with limited resources ever do such a thing? Let's say I didn't have those resources but wanted to raise capital for my first deal. How? You can't legally get caught pitching even accidentally to a non accredited investor or you could go go jail. How? Honestly it pissed me off about all this raising capital stuff last year. They make it sound like raising capital is the answer to poverty.

    I very, very nearly went bankrupt because I thought oh I'll just raise the money. I'm a good salesperson so I thought it shouldn't be that hard. I had $50,000 for the whole startup and blew $40,000 on one lawyer. I lucked out. What if I was someone making only $30,000 a year? How on Earth do you raise capital to raise capital? The rent seeking crap is astonishing. Accredited investor laws, downpayment laws, certification requirements, net worth requirements, experience requirements. Combine that with price gouging and low wages and the system is 100% rigged against the poor common person. Want to advance civilization? Try cutting out the rent seeking red tape and giving people a chance to succeed.

  14. Did i miss the discussion about raising capital explained?? Seems like a click bait title with little useable content.

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