Bootstrapping vs. Raising Money with Chris & Rob Taylor – EP 77

Interview with Chris and Rob Taylor

Bootstrapping vs. Raising Money with Chris & Rob Taylor

Today, I’m speaking with the powerhouse brother duo, Chris and Rob Taylor.

Here’s a bit of context…

Chris founded a company called Square Root in 2006 which helps automotive OEM field managers understand and act on unique data patterns and opportunities for retailers in their markets. The company was acquired by CDK Global, where Chris continues his journey as Vice President and General Manager.

His brother Rob Taylor is co-founder of Austin-based Convey, which was acquired for $255 million by project44. Convey powers direct-to-consumer delivery experiences for more than 2,000 of the world’s largest brands.

What’s interesting is that Chris & Rob took very different startup paths, but got to very similar destinations.

Chris bootstrapped and scaled a single startup over the course of 17 years and didn’t take a single dollar of outside money.

Rob on the other hand, leveraged venture capital to fund 7 different startups over a 20 year period. It’s a go big, go fast strategy.

Both paths have pros and cons that we dig into during today’s conversation.

These guys have had major exits, and major success, and I wanted to talk to them all about their experience building, scaling, and selling businesses.

We discuss entrepreneurship, acquisition deals, IPOs, bootstrapping vs. raising money, VC partnerships, and so much more.

Featured on This Episode: Chris and Rob Taylor

✅ What They Do:

  • Chris Taylor founded Square Root in 2006. Square Root is the creator of CoEFFICIENT®, which helps automotive original equipment manufacturer (OEM) field managers understand and act on unique data patterns and opportunities for retailers in their markets.
  • Rob Taylor is co-founder and former CEO of Austin-based Convey, which was acquired for $255 million in September. Convey powers direct-to-consumer delivery experiences for more than 2,000 of the world’s largest brands. Taylor is now president of Convey by project44, which acquired the company.

🔎 Where to find Chris and Rob Taylor:

Key Takeaways with Chris and Rob Taylor

  • Two different approaches to entrepreneurship
  • Bootstrapping vs. Venture Capital.
  • What makes a startup fundable?
  • How much money does a startup really need to raise? HINT: The answer isn’t “as much as possible.”
  • How to pick the right VC to work with.
  • Mentors, coaches, and board of advisors.
  • Transitioning from entrepreneur to investor—a whole different skill set!
  • Why a BIG exit isn’t the key to happiness. Find joy in the journey!

Chris and Rob Taylor – Bootstrapping vs Raising Money

Chris and Rob Taylor Tweetable

“Would you rather own 1% of a $100 million company or 100% of a $10 million company?” – Rob Taylor Click To Tweet “I went out and sought advisors that would shoot me straight and get me out of my own head. I had people that were giving me a little bit of perspective. – Chris Taylor Click To Tweet


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Read the Full Transcript with Chris and Rob Taylor

Justin Donald: Well, I’m so excited to be here with two of my friends. We’ve got Chris Taylor and Rob Taylor. And I’m excited because this is the very first time I have ever interviewed two people at the same time but their story is just so compelling and so fun. And you guys, I’m just so glad you could join. Thanks for coming on the show.


Chris Taylor: Yeah. Thanks for having us.


Rob Taylor: Glad to be here. Excited.


Justin Donald: Yeah. So, this is great. You guys have this interesting story. It’s almost like this rivalry in a way of like, “Hey, what is the best strategy to be an entrepreneur, to raise money, to grow and scale a business?” You guys are both successful entrepreneurs. You’ve both had successful exits. I’m really excited to discuss those in more detail. But before we do, I kind of want to learn the story behind this story because you guys weren’t always these tech and entrepreneurial mavericks that you are today. You grew up in West Virginia. Somehow, you made it to Austin. I’d love to hear more of your story.


Chris Taylor: Yeah. Thanks, Justin. Yeah. No, I wouldn’t say it’s a traditional entrepreneur path to start off in rural West Virginia. Rob and I grew up about a half an hour outside of Charleston. So, Charleston’s the capital, couple hundred thousand people tops, but it gets rural really fast. So, we basically grew up backing up to, I don’t know, a couple tens of thousands of acres of woods, and that’s kind of how our childhood was running around the woods growing up. Yeah. But I think we were, I know a typical first child, second child. Rob was very organized, go-getter. I guess we’re both go-getters but, yeah, very kind of typical interesting rivalry right from the very beginning.


Justin Donald: You know, that’s cool.


Rob Taylor: As you can tell, Chris is the extrovert in the room, for sure. I’m more of an introvert. But growing up in West Virginia it was sort of pretty evident to me that Chris was going to be an entrepreneur. I mean, we lived next to the woods and Chris used to go in the woods and he had a turtle farm so he would collect turtles and he would put the name. He would write in red ink the names of the turtles, put them in like a bin, and then he would charge the neighborhood kids to come over and hang out and pet the turtle. So, I knew at a very young age Chris was going to be an entrepreneur. I took a much more traditional path, which we can talk about.


Chris Taylor: Yeah. I think Rob was more the finance whiz. Yeah. So, Rob is four years older than I was. I was always the younger and shorter brother. Yeah, living in his shadow. And I remember distinctly at an early age Rob had convinced me that nickels were better than dimes because they were bigger. So, there was a good, solid year of my life where Rob like I was making money off of the local kids off my turtle farm and then Rob was tricking me into giving a lot of it to him. Through various ways, he took advantage of his little brother. So, I think we had a pretty strong sibling rivalry further in the beginning.


Justin Donald: Very crafty, Rob.


Rob Taylor: I mean, you got to find your path, I guess. But yes, very, very different. And so, growing up in West Virginia, yeah, we both went to college and I think that’s kind of where our past diverged. You know, I took a very traditional path with college, engineering degree, went into a large company as a manufacturing engineer for five years, went back to graduate school to get my MBA and an engineering graduate degree, and then went into management, consulting for a few years, so very, very traditional. And it was not until 1999, so I’m aging myself now, where my entrepreneurial career really took off. And I’ve been building companies for the last 25 years across seven startups. There’s a fair mix of sputters, fails, and wild successes as well. And you hope along the way that you learn something and apply it to the next one.


Justin Donald: That’s so awesome.


Chris Taylor: Yeah. And I went to school and I actually studied computer science. Tech was kind of my thing although Rob very quickly caught up in 1999. So, I went to school for computer science, math, and psychology at Carnegie Mellon. Then I moved down to Austin to work for then a budding startup called Trilogy, which is both notorious and might be the right word here in Austin and spent 10 years at Trilogy. But in 1999 and you have to go way back, that was basically the tech boom, right? The dot-com boom was happening in ’99. And so, Trilogy at the time had spun out a bunch of dot-coms to try to take advantage of the market and I was on the leadership team of a couple of those. And in particular, I was working with one called Carter then went from 30 to 300 to one. I was the last employee over a period of nine months. So, I joined at ‘99 and by the time he had made it, the dot-com bubble had burst. And, Rob, maybe talk about what you’re doing with Quepasa at that time.


Rob Taylor: Yeah. My first startup in ’99, similar trajectory where we put some venture capital money into the business. We five months later did a public offering, took the company public, and we were in no way ready to be a public company. And so, we spent a lot of money really quickly to grow the business. And then as Chris mentioned, the dot-com bubble hit sort of in 2000. We downsized the business. But it was just this amazing experience of getting an entire business lifecycle over the course of, for me, it was about three or four years. And then I had the buck, then there was no going back to big companies. It was really about building companies at early stages, having that autonomy, being able to make impactful decisions every single day directed the business. So, yeah, I was hooked from that point forward.


Justin Donald: Yeah. That’s just incredible, guys, because whether the IPO goes well or not, that is like a foundation of education that is going to be so relevant, so applicable, it’s going to help in the next acquisition, IPO, whatever you end up doing because it steers the ship. It’s like even if everything went poorly, which I know it didn’t, there’s so much to be learned in that process for round three, round four, and wherever it goes. I just think that that’s so awesome.


Chris Taylor: Yeah. And so, Rob was in Phoenix at that time and I was in Austin, and favorite article ever published. I can’t find a copy of this but Rob’s company was public and all-star shows up, and I followed this. I was looking at the latest news and there was an article and this was probably March or April of 2000. And in the article, there was a line that said, “Companies like and are having massive layoffs,” and those were our two companies. So, our two companies were mentioned in the same article about a trend piece about how the dot-com bubble was collapsing. So, we clipped that, sent it to our mom, and told her maybe she shouldn’t retire just yet.


Rob Taylor: Yeah. Imagine how proud she was.


Justin Donald: That’s awesome. And so, how did you guys kind of get back here to Austin at the same time? And by the way, for those of you that are listening and you can’t see this gorgeous background that these guys have, they’re at Chris’s place, and by the way, Chris, your home is absolutely one of my favorite homes in Austin. It’s one of my favorite homes of any of my friends. And you’ve got this secret hidden door. It’s a trap door in a wall where you wouldn’t even know that you could slip through into this winding staircase down into what you guys call the bunker. And you have just the coolest man cave and bar and wine room, and old school, a record player set up. I mean, it is such a cool place to hang out and just talk about life and have fun together.


Chris Taylor: Yeah. Well, we love to host. Yeah. We kind of built this house to host and have fun and be extroverts, as Rob mentioned. So, yeah, we’d love to have you and your crew over here anytime. So, yeah, bring the mastermind, bring your friends, bring your listeners. We love to host.


Justin Donald: Oh, that sounds awesome. I will take you up on that. That sounds great. So, what got you both here? And when was it that you got here to Austin?


Chris Taylor: Yes. So, I moved here in ’95 after I graduated school and spent 10 years at Trilogy doing tech, doing sales, then running their dot-coms. And then so I left Trilogy in 2006 and started my – so my journey is a little different. I’ve had one startup for almost 17 years now. I just sold it, actually, our year anniversary. We just passed our year anniversary. So, I had a very different path than Rob. While I had a lot of startups, I had one for 17 years. And so, I have been running that. When did you actually get here? It’s like what? Six or seven years?


Rob Taylor: 2011.


Chris Taylor: 2011. Now, what? 10 years ago. Yeah. So, I’ve been running Square Root for five or six years at that point when Rob came to town.


Rob Taylor: Yeah. This is an interesting segue to sort of the differences in how we approach entrepreneurship. You know, Chris just mentioned he has worked on one startup for 17 years. He bootstrapped that startup, didn’t take a single dollar of outside money, and it owned the whole company outside of what he carved out for his employees. My approach has been very different really since the beginning, which is raise money, leverage other people’s money, in this case, venture capital, and use that capital to invest ahead of traction. And so, it is a go big, go fast strategy, and really have deployed that against the seven or so startups over the past 27 years. So, I actually worked on a few startups, was living in Los Angeles at the time, working on a company called TrueCar, which is actually now a public company. And TrueCar started to get a little bit large and I was ready to go build again. I just had my first child. L.A. was really never long-term for us. And so, really took that opportunity to be thoughtful about not only what was next from an entrepreneur standpoint but geography. And Chris was already here. Austin was and is even more so now such an amazing place to raise your kids, to build a company. There’s lots of experience, sort of early-stage talent here. Lots of capital here. And so, have the opportunity to come in and start a business here and did that in 2011.


Justin Donald: That’s awesome. I just love this whole idea of brothers who kind of have their own strengths, took their own path. You know, you both influenced each other a bit but at the end of the day, you say, “No, I’m going with my instincts on this. I’m going with kind of my experience, my circle of influence, what they’re advising, what my gut is telling me.” So, it’s totally different paths but you end up in the same place with companies that are booming. You both have exits within months of each other, which is really cool. And at the end of the day, the results were pretty similar. I mean, on paper, I think any time and by the way, I’ve had experience raising money for one of my businesses. So, I’ve done the bootstrap route and I’ve done raising money. And it’s amazing how quickly you lose equity as you raise money but it’s a bigger pie. You get a smaller piece of it but the pie just gets a lot bigger. And I haven’t done it to the level that you guys have but I’m curious to hear more of the ins and outs of that and kind of what that has looked like for you.


Rob Taylor: Yeah. I mean, there’s this saying, “Would you rather own 1% of a $100 million company or 100% of a $10 million company?” And that, I think, really captures the spirit behind a venture capital-backed business where over time when you raise money, you are deluded in your ownership but you are presumably building a company faster that is worth more money over time. And again, there’s lots of ways those things go sideways but that’s the math behind it versus Chris, who didn’t take any outside capital, never diluted, owns most of the business. And so, yeah, I mean that sort of captures the spirit of the difference.


Chris Taylor: Yeah. And I think ironically and trust me, we do this math. We do a bootstrap versus VC talk around town and people always ask, “Who’s winning?” And at any given time, it’s always very hard to tell. But we both just exited our companies, and Rob’s was massively larger than ours. He had measured in quarters of billions, let’s just say, and mine wasn’t nearly as big. But if you look financial over his last couple of startups and my one start-up and where we’re sitting right now, it is literally almost exactly the same, like plus or minus 5% to 10%. And so, we ended up in this very, very similar place financially with very different paths and very different stresses I can say kind of along the way as we’ve done that. And it is a choice, right? It is a choice about what is your idea and what is your passion and what are your skill sets and your ecosystem to truly make that happen, and we do a whole lot on that.


Justin Donald: Yeah. And the reality is, it’s not that one is right and one is wrong. It’s which is best for you, which is best for your business because there are pros and cons to both. And I just think it’s incredible that you guys ended up in such a close number that that delta is pretty small, even though purchase price. And by the way, you guys both did incredibly well. And I love how modest you are, Chris, where you’re both very modest but you’re like, “Oh, Rob did a lot better than me. This was a massive exit.” You both had massive exits but it is interesting to see what does that equity equal. And then when you write it down, you guys are very close. And I like that you can get there two different ways. It’s not like, “Hey, you start a business, you need to go the VC route,” or, “You start a business, you need to bootstrap,” because both work and both are great. One’s maybe a slower path and maybe there’s a little more control. One’s a faster path. You have a little bit more micromanagement in a lot of aspects, depending on the VC that you go with. But you know, at the end of the day, each can be very successful and I like that you have proven that out.


Chris Taylor: Yeah. And it’s interesting, like in the Austin ecosystem those folks that have that option, right? Not all businesses are made to have that option but those folks that have that option almost inevitably end up talking to us. People say, “Hey, you stuck to the Taylor brothers,” because we have that perspective and we do take a little bit of I’m team bootstrap, he’s team VC, and we have those conversations. And so, it’s with a lot of fun and we get a lot of energy from that helping entrepreneurs navigate those waters and really understand what those differences are.


Rob Taylor: But you hit it right on the head, Justin, which it really is a personal choice about the kind of company you want to build and the kind of life and sort of energy and speed and all of these things that you want to have and also how much risk you want to take. I mean, taking other people’s money can be stressful, right? I mean, you have a board of directors who are made up with your investors and you have to continually show progress and answer to those demands. And so, there are pros and cons and I think from a VC-backed standpoint, I think some of those key benefits are speed. You know, when you raise money, it allows you just to go faster in every way. You can use that money to go hire really, really accomplished amazing people who are expensive. You can use that money to build your solution and your product ahead maybe of where the market demand is. And so, it just gives you the ability to sort of move faster. I think along with that, speed can result in true disruption, right? Like if you have an idea or a business concept that is truly innovative and disruptive, you need to take advantage of that market opportunity really quickly. And we just talked about speed. So, if you want to take advantage quickly, really leaning in from an investment standpoint can be super important.


Chris Taylor: Yeah. And then on the flip side of that, yeah, completely losing our speed, right, as always. You know, and we talked about this on a couple of our talks like I think the way to think of it is Rob was always going top-down planning, right? He’s like, “Hey, I’ve got, you know, pick a number, $5 million, $10 million in the bank from the latest round. So, we have a plan we’ve got to present to the board and we’re going to go ahead. We’re going to go spend all that money to this outcome.” I was doing the exact opposite. I was like, “I’m going to have a deal that may or may not close in a month. And when that closes, do I spend that dollar on sales? Do I spend it on our operations, doing it on engineering?” Rob’s moving all the levers up and I’m choosing which lever I’m going to go. So, that kind of top versus bottom planning results in speed but on the flip side, it also results control. So, I had all the optionality and control that I could have ever wanted. I chose the exit ramp. Frankly, had I been VC funded and hit COVID and we hit some stumbles on the business, I probably couldn’t have sold because the exit wouldn’t have been big enough for the investors. They would have wanted to take more risk. Let’s work through this and go, and maybe that works out and you get a much bigger outcome. Or maybe it doesn’t and it goes to zero. And I got to the point where I had a bunch of off-ramps that probably wouldn’t have been available to VC including cash flowing the company, right? So, I had years where I just cash flowed the company and built this lovely bunker and had money along the way and wasn’t quite as all in as you might be.


Rob Taylor: Yeah. Control goes out the window the second you raise somebody else’s – using somebody else’s money, and I mean absolute control. I mean, you have a board of directors that really govern the business and there are certain expectations and you have to align on the speed at which you’re going to grow the company, where you spend the money. And so, that optionality and that control really is one of the downsides of raising venture.


Justin Donald: Yeah. And another interesting component of this, I like the speed, I like the control type of dynamics here. I think that’s really important. But I also think that having the end in mind as you kind of figure things out as an entrepreneur is important. You know, if you know that you want to have an exit in a shorter time frame, you’re going to make different decisions with the profit of your company and how you reinvest that, how much money you raise or would like to raise, what that whole marketing campaign might look like, which VCs you might go to. Versus if you just want to have a lifestyle business or if you want to build something slowly over time, you’re not sure if you want to exit. You want to have a business that’s maybe built for impact, whether it be your deliverables or the influence you can have building a team and employees. And the whole idea of like getting clear on what that looks like is also going to help steer the ship as to whether you should bootstrap or whether you should go VC and raise money.


Chris Taylor: Yeah. That’s absolutely right. And that’s a lot and not all ideas are built for the other, right? You know, people always ask me, “Why did you bootstrap?” The reality was I didn’t have a lot of choice. At the beginning, the idea wasn’t fundable and then we had enough traction kind of with some early products. We’re kind of consulting products, and we turned into test products down the line. But we have enough money coming in on a cash flow basis, well, why would I take a couple of million bucks? I don’t need at this point. And then by the time I need it again, the business has slowed down and it was like a horrible time to raise money. So, it’s a little bit of a win-win and if do you have a choice. Not all ideas are created equal, and not all timing is created equal. And that’s some of the stuff that we talk to entrepreneurs is, “Is the timing right? Is the idea right? What type of traction should you have?” to decide win. And the other thing is it’s a win, not if. I sold my company. I’m now part of a much larger company. I bootstrapped it a very long time but all companies start off bootstrapped, right? When you’re an idea in your garage, you think about what you want to do, you’re bootstrapping. You’re working your way up. And then eventually do you turn on some source of capital at some point?


Rob Taylor: Yeah. It’s a great point. I mean, this notion that not all ideas are investable is really important. Venture capitalists and those who take the risk early really are betting on a number of things. They’re betting on the entrepreneur, of course, first and foremost. But the idea has to be big enough. It has to have the potential to really, really be a big company. And so, not all ideas really are investable. The other thing that’s I think interesting there is once you raise money, once you go the venture route, you sort of can’t go the other way. You can’t then go back into bootstrap mode. I mean, there is a growth imperative that continues over time because you raise a round of funding and that funding is used to get you to the next round of funding. And in order to get to that next round of funding, you have to manage the growth in the right way and meet that imperative. And so, you really are on this path of getting bigger and bigger and going faster and faster.


Justin Donald: Yeah. And that’s an art in itself, Rob, where a lot of people think, “Oh, you just raise as much money as you can.” No. Actually, you just raise as much money as you need to get to the next round and that next round is a whole different animal and it comes with its own unique set of pros and cons and circumstances that you have to work through, right?


Rob Taylor: Yeah, absolutely. This idea that you should raise as much money as possible is false. Absolutely. I think there really is an informed equation around how much do you think you need to get to the next set of milestones that also make your company more valuable so that the next time you raise money, you can do so at an enhanced valuation and have less dilution. The problem with raising as much money as you can at a really, really high inflated value is then you’ve created a hurdle for yourself that can oftentimes be impossible to overcome if you have any hiccups in the business. So, I coach entrepreneurs on this issue all the time. It’s very, very important. You have to really be thoughtful about how much money you raise and the valuation at which you raise it.


Justin Donald: Yeah. And, Chris, you had talked about timing. It’s interesting, though, because in the world of timing, you’re not just timing what’s going on in your company. You’re also timing what’s going on in the economy. Like, there are two and other sets of timing that you’ve got to balance because your business may be flush but the economy’s not right. I mean, recently, during the beginning of the pandemic, there was a big freeze and hold on VCs investing money in companies. And so, your business could be booming but you might not be able to get money. At other points in time, maybe you just had one crazy month that was horrible, messed up your P&L, but that one thing is going to totally cripple your ability to earn money with some VCs if you were to raise, if you had the ability to raise. And that brings me to another point, which is the partnership with the VC really matters, and picking the right VC. We had an unbelievably bad experience with a VC and an unbelievably great experience with a VC. And it was interesting. So, for the company, IFM Restoration, that I started with a couple of friends, this company has done very well and in our first, I want to be careful not to use any names, but the first VC group that we worked with basically on the day that they were supposed to wire money, tried to re-trade at like half the amount.


They literally came in knowing that we needed funding and we needed it ASAP, and they tried to lowball us at like half of what was literally signed in the term sheet. You know, totally bush league. And we had another VC, S3 Ventures, here out of Austin, the largest VC in Texas, who we just had this incredible experience with. And by the way, it’s really funny because the VC that tried to re-trade with us massively re-trade. That’s not like a little negotiation, like that’s egregious. And so, we walked and they didn’t realize that we had good relationships and had other abilities to get financing in place. And they’re like, “No one’s ever walked on us.” And we’re like, “Well, here’s a first. You don’t treat people like that,” and they’re like, “No, no. Just counter us. Give us a number,” and we’re like, “No, we’re out.” And they said, “No one’s ever done this.” We’re like, “Well, all right. Now they have.” And so, we went with S3 Ventures, and they’ve just been a delight to work with and really awesome partners and I just have so many positive things to say about them. And even when they knew we might go with someone else, they were still adding value and saying, “Hey, let us connect you to this partner, these people.” And so, that relationship matters so much in my opinion. I’d guess you’d feel the same way, Rob.


Rob Taylor: Yeah, absolutely. I mean you really want to be in a position to pick your firm and even more specifically to pick the partner and have chemistry with the partner at that firm that’s going to be on your board of directors. It really, really is important. And I’ve been in venture now for 20 plus years and have really observed a change in that space. I think we’ve really been in a ten-year-plus stretch now where the entrepreneur really has the leverage relative to the prior 10 years. When it was 20 years ago, incredibly expensive to build a company. We didn’t have all the cloud-based architectures today and so really expensive to get a company off the ground. Venture capitalists have a lot of leverage, and I think that resulted in a lot of bad behavior. But I’ve really seen a shift over the last 10 years where when the entrepreneur has the leverage and the venture community is competing, it really does lead to some innovation and changing behaviors there. I’ve been really fortunate. I’ve worked with my client company, Convey, and my last company before that, BlackLocus, I used the same lead venture capitalists, Silverton Partners, here in Austin and the partner there I’ve been working with now for over 10 years and we have an incredible relationship.


And when that’s tested is when times don’t go well and that happens always along the journey. And I will tell you that there were times when my venture partner was more bullish about the business than I was as I was having my moment. So, yeah, that relationship really, really does matter. You need to find somebody who is equally supportive in the troughs as they are on peaks.


Chris Taylor: Yeah. And so, I think one of the things that is also firmly in the VC camp on the benefits is what I call the ecosystem. And it is the fact that the VC is not only they’re sitting on board and you’ve got all that direction coming and there’s a cost to that but they also have a whole ecosystem around them of operators and introductions to get to potential customers and that view from the top and all these things they’ve seen. On the bootstrap side, it’s really lonely, especially I was the sole founder and I didn’t have anybody sitting in my camp. And I think if there’s one story there that summarizes this the best, I’ve been in Austin for 15 years when Rob moved here and my company was on 6 million or 7 million at that point, pretty decent sized company here in Austin. And Rob comes into a VC company and literally like two months later, he’s inviting me to all the parties. Like, he’s inviting me to even for VCs that weren’t his VC, I’m getting invited to the A sale via the Austin Ventures. I was like, “How the hell are you inviting me to all the parties? I’ve been here for 15 years.” And then this happened so many times and actually happened two weeks ago. Still, it’s unbelievable it’s still happening.


I would go to some startup event and I’d be sitting there and somebody walked up to me and they go, “Gosh, I feel like we’ve met before,” and I’d stop and I’d be like, “Yeah. Was I taller and skinnier?” I’m like, “Oh, I’m Rob Taylor’s brother.” And they’re like, “Oh, I didn’t know Rob had a brother in town.” I’m like, “I’m the f*cking brother in town?” It was like, “I’ve been here for 15 years. He moved here three months ago,” but he walked into this whole ecosystem, right? And he was almost a brand, and he came in very quickly, had an exit, and start his next one. I didn’t have that. I was trying to build that all myself. And so, my number one thing that I talk about when I work with entrepreneurs is whether you’re VC or bootstrap is you have to build a good system. It’s harder if you’re bootstrapped. I do it through groups like we’re in, Justin, and groups like the Entrepreneurs’ Organization or YPO are fantastic groups to go out and get peer-to-peer advisory and have people in the boat with you or go build your own board of advisors. I never had a board except for my wife but I went out and sought advisors that would really kind of shoot me straight and get out of my own head and make sure that I had people that were kind of giving me a little bit of perspective. You know, it’s hard, especially 15 years in.


Justin Donald: Chris, that’s an incredible point that even if you’re not forced to have a board of advisors like you will be if you go to the VC route, you really need to take the initiative and really take it upon yourself to build your own board of advisors. And this can be in life also but specifically, it should be for the business because you want people in your camp that have played the game of business and life and investing at a higher level. They’ve walked through it. They’ve had the experience, and they can truly give you advice not based on, “Hey, I think I would probably do this based on a gut feel.” You don’t want that. You want, “Oh, yeah, I’ve been through this. In fact, I did it this way and it was a really bad result. And then I did it this way and we had a much better result. So, I recommend learning from my mistakes and taking this path.” You need that wisdom as an entrepreneur. You need it as an investor. You just need it. I think you need it in life, even if you’re not an investor or an entrepreneur or anything. You just need smart people around you that have the experience that you don’t have.


Chris Taylor: Yeah. I think it’s the most important thing, and it’s hard to do. It’s hard to find but it’s worth the investment in both time and equity or money. I’ve given my advisors equity. And I think it’s important for your team too. I had coaches going down through my executive team that, basically, my personal advisor then became an advisor on our team and really kind of worked with us all to be a better team. And such well-invested money.


Rob Taylor: Yeah. 100%. Nothing else to add. Absolutely. That kind of surrounding yourself with advisors, mentors too, right? Like even folks that have nothing to do with your business who can help you personally and professionally, especially as a CEO entrepreneur, because it’s the loneliest job on the planet.


Justin Donald: Yeah. There’s no doubt. I mean, the saying of being lonely at the top of the mountain is so true. And you just want to find other people that are there at the top of the mountain, whatever their mountain is, whatever size it is, so that you can kind of connect. And I do think that peer group matters more than people realize. I think mentorship and coaches matter more than people realize. And I say this all the time. We’re living in a day and an age where everyone’s a coach, everyone’s a life coach. Everyone, I guess, is certified to give you life advice because they’ve lived life. I don’t know if that is a – I want a higher benchmark than like, “Yeah, I’m alive. I can coach you.” I really think you need to hire people that have done exactly what it is that you want to do or maybe they’ve done at a higher scale than you even want to do but they have the expertise to be able to get you there. But I can’t even for a second begin to soften up the importance of my peer group in different stages of my life professionally and the impact that’s had on me, the impact that it’s had on my mindset, my thinking, what’s possible, what’s capable.


Just hearing the way people think and talk and communicate will shift the way that you do because basically we take beliefs from other people, beliefs that our parents instill in us, beliefs that our friends instill in us, the beliefs of the people that you spend the most time with, whatever they instill in us, that’s kind of what we walk around with, often not even proving whether it is inaccurate or a true belief or not. Now, we live oftentimes on other people’s projections. And so, taking the time to get clear on that or even better yet or as well let’s hang around people that have a much stronger mindset and much more successful like a path or a track on everything, not just entrepreneurship, not just investing but health and relationships and strong family values and whatever else it might be, I think that that is so important. And by the way, Chris, I’m so excited. You and I are going to get a chance to kind of upgrade our peer group because we’re going to Necker Island, Richard Branson’s island, to hang with him for a week. So, I am really excited to glean all kinds of wisdom and nuggets from him and add him as you know, let’s call him an “advisor.” I use air quotes on that. We’d love to bring him on the team. But even if I just get him for a week, I’m pretty happy with that.


Chris Taylor: Yeah. And we get to be roommates. So, looking forward to that.


Justin Donald: That’s right.


Chris Taylor: No, it’s great. And it’s very cliche but I think it’s that you’re kind of the average of your five closest people you interact with. I think that nothing is more true when you surround yourself with people who are aspiring to be better or in a direction you want to go. It’s so eye-opening. And so, as I transition from entrepreneur to kind of investor at this point, I haven’t really figured out what my next move is yet, getting involved with you and your circle and really understanding this kind of whole new world that I knew nothing about. Yeah, it’s pretty easy to think that I’m being successful over here. I’ll be successful over there. It’s pretty obvious when you start interacting with folks from TIGER 21 and folks from your circle that, yeah, it’s a whole different world. There’s a lot to learn and a lot of opportunities. So, I’m excited about that journey.


Justin Donald: Yeah. It’s a different skill set. A lot of entrepreneurs don’t understand this because they have had a lot of success, especially if you get into an ecosystem with a lot of other successful entrepreneurs. It just greatly increases the odds that you will be successful, right? What they’re doing, you’re going to copy. Success really breeds more success. And so, you’re just going to have things rub off on you and you’re going to see things, do things, think about things in a different light. And so, as a successful entrepreneur, I see this all the time because you’ve experienced so much success that you think in your next chapter, whatever it is, that you’re going to have just as much success that it’s going to be bigger and better. But when you transition from an entrepreneur to an investor, it is a whole different skill set. This is not the same by any stretch of the imagination. Now, there could be some truth in the fact that you may have an inside scoop, you have expertise in an industry where you know it like the back of your hand. So, you may have some inside baseball to be able to help from an investment standpoint but overall, the decisions to invest in vetting companies, vetting opportunities, vetting the worst-case scenarios and playing them out, it is just a different ballgame than running a company.


And I really hope as entrepreneurs keep having exits and keep doing great things that they can pause and get the education they need. They can join a mastermind like The Lifestyle Investor Mastermind or whatever mastermind is out there. I don’t feel like there are many that teach this stuff but this is what people need to learn so they don’t lose all the money that they’ve made on these big exits. And I see that unfortunately all the time.


Chris Taylor: Yeah. No, I think it’s almost a different way of thinking of risk too, right? Entrepreneurs are kind of the ultimate risk-takers and then you get this pile of money and then you have this massive appetite for risk. And the reality is that you’re thinking about the right way. You don’t need to take all that risk with that money, right? Certainly, a portion of you might want to or you put a portion of it back into yourself to go do another one but there’s no reason that you can’t have great outcomes with relatively low risk, which is not how I live my last 15 years. So, it’s a very, very different mindset as I’ve kind of made that transition.


Justin Donald: And I’m curious your experience, Rob, and even some of your thoughts reflecting on what we’ve talked about because, again, your path is a little different. And though it may be a riskier path, as an entrepreneur, I do think to a certain degree because of the expertise and wisdom, there’s more of a calculated decision. You’ve got money that can kind of help protect some of the risky moves where you have kind of a war chest. That doesn’t mean it’s not risky but in a worst-case scenario, you can pump more money in and put a Band-Aid on until it’s actually fixed so it’s structurally fixed.


Rob Taylor: Yeah. I think there are really two sides of that coin. You’re right. When you do raise venture and you have a very strong balance sheet, it does allow you to weather storms. But keep in mind, success for venture-backed business is not to grow slowly or not at all. You have to have that growth imperative, whatever that is, whether it’s 50% to 100% a year and you can weather short storms but it’s hard to weather long ones without really destroying the business. And that’s again, kind of endemic quality of a venture. You have to keep growing but you certainly do have some more flexibility to weather short-term storms.


Justin Donald: So, I’m curious, are there any other pros and cons? I mean, I’m sure there are. Any that would make sense to get into today with regards to bootstrapping versus VC, venture capital?


Chris Taylor: What are the top thing we’ve covered? I mean, I think that optionality is one we touched on. Yeah, that’s probably kind of the other one that I focus on is just your timeframe, the cash flowing versus going big and then having to go versus not having to grow, building off on Rob’s last comment. I had a couple right here, right? Frankly, like five years ago I was doubling every year and had a couple of good years. It would’ve been a great time to exit. It would’ve been a great time to raise money. And then things slowed down, right? And I never had to do layoffs or fire my team or do anything that, frankly, if I was VC, I probably would have had to because of the slow down. But I had that optionality to kind of control culture and control things that I wanted to do through those lean times to kind of where, again, a couple of years to work our way back through it to the point where we started kind of growing again as we kind of focused on the right thing. So, I just think that I really valued that optionality both on not only on exits but on how to kind of run the business along the way and how to kind of protect the things I cared about in the company along the way.


Justin Donald: Yeah. Anything to add, Rob?


Rob Taylor: I think that’s right. I mean, optionality I think directly relates to my comments before which is as a venture-backed business, you do have some optionality but not really, right? Like in Chris’s instance, where he had a couple of bad years and he just stopped investing back into the business and got conservative and didn’t have to do layoffs. I mean, at Convey we went through some tough times, too. And when I say tough times, our growth rate went from 100% to whatever, 50%. So, we’re still growing and we did over the last seven years, we had to do, unfortunately, two separate reductions in force to make sure that we could preserve that balance sheet and continue to aggressively invest in the areas that we hope to be successful. So, it really is a different lens.


Justin Donald: Yeah. That’s great feedback. And another question I have for you, this is an interesting one because I meet entrepreneurs all the time that have had a massive exit. I would say many of the people in my ecosystem are either entrepreneurs on the verge of a massive exit or entrepreneurs that have recently or sometime in the past had a pretty good-sized exit and in some cases, very large. But the one commonality that I find is that having the big exit isn’t the emotional experience that everyone thinks it’s going to be, that it’s not like you just arrived. It’s kind of like, “Oh, okay. This is cool. What’s next?” And so, I’m wondering how long each of you experienced like this joy of accomplishing having this big payout versus like, “Okay. I’m kind of bored. What’s next?” So, what’s that like for each of you?


Chris Taylor: Yeah. Since I exited a little earlier I’ll start, and Rob can jump on. So, I think he probably articulates it but I was pretty – it’s an exhausting process like I sold my company during COVID to the year leading up to it was tough, just kind of managing through all that. And then the process itself was really, really difficult. So, I was pretty toasty burnt by the time it got done. Everyone was asking me like, “What’s next? You’re going to do another one?” I was like, “Hell, no. Like, I am so done. I’m not doing another one.” And then I just had my year anniversary yesterday, and people are like saying, “So, you’re going to another?” I’m like, “You know, maybe.” And so, I’m pretty sure if you asked me six months from now, I’ll probably be like, “Hell, yes.” So, it is both a journey on the, “Hey, that was a great outcome,” and there’s that kind of emotional release but I would say most of it was exhaustion. It was kind of hitting the finish line and Rob used to run Ironman. I can only imagine it’s like this, right? There’s a joy and elation that comes out of that but you also just want to sit in a chair and have a glass of orange juice or wine in this case and relax.


So, yeah, I don’t know. I think it’s been a very pensive year about what’s next and what I want the next chapter to look like and both of us have a true F-you money at this point. We can do whatever we want. So, for me, it’s got to be a combination of giving back but also helping other people build or maybe in a direct role, maybe in an advisory role but we’ll see. Never say never. It is changing every day as I get a little bit farther from the exit.


Justin Donald: Yeah, that’s cool because that’s the truth where it changes. It’s like if you talk to women sometimes that had kids, if they don’t have their minds made up often in that moment, they’re like, “No way. I just had a kid. I’m not having any more kids.” And then in six months, it’s like, “Well, maybe,” and then all of a sudden they’re pregnant, ready for their next child. And this has happened with a lot of our friends that are like, “No way. I’m not having any more kids.” And now some of them are at four, five, six. And so, yeah, time changes. You know, you get out of the heat of the moment and you’re able to reevaluate, make some decisions. And you said something really important. You don’t have to run a business to contribute and use your gifts and get some of the thrill of the business because you can advise. You can coach. There are so many different things that can be done. So, I think that that’s a really good point, Chris. Rob, what about you?


Rob Taylor: Yeah. I mean, I agree with a lot of what Chris said. I mean being an entrepreneur, people self-select into entrepreneurship but the personalities that we have, high ambition, high drive, want to make an impact every single day, a high-risk tolerance, these characteristics don’t go away just because you sell your company. But Chris is right. It is exhausting. It can be an exhausting journey. And the other thing I coach entrepreneurs on and even my leadership team, the other thing about entrepreneurship is that it is a roller coaster of highs and lows, the highest of the highs down to the lowest of the lows over the course of that journey. And you have to find joy in the journey. You can’t be obsessed with the destination. You have to find joy in that journey and just remind yourself of all the learning you’re going through of the mission that you’re on and the purpose of your company. That requires constant reminding yourself because it is hard. And so, it can be an exhausting process. And similar to Chris, like Convey was a little bit seven-year journey. It was a very difficult company to build. We were pioneering really a new category in logistics and supply chain technology.


And so, it was very difficult and exhausting. And ultimately, we got a great exit at the end, partially because we did a great job and partially because we were lucky. And by the way, luck is required every time in whatever dose you get it. It’s always required. So, don’t let your ego get in the way of thinking that it was 100% you. But I’m going to transition right now where I’m part of the company that have acquired us. I’m still sort of running our business. I’m deeply committed to making sure that this acquisition is successful, that my team lands in great roles within the business. And we took equity, we took some equity into the new business and so I’m financially incentivized to make sure this goes well as well. And so, I’m committed for some period of time here and beyond that, I don’t know. I’m not sure I’m going to start from scratch again but certainly doing some board work, advising, getting re-energized while also taking a bit of a break is sort of my strategy right now.


Justin Donald: I love it. Well, I can tell you just from my experience that it’s very refreshing to go from running a business, being in charge of everything to, “Hey, I’ve got a board seat and I advise or I’ve done some consulting,” that, to me, is just so much easier. It’s better. It’s more fun. If you really like it a lot, you can bring on multiple advisory agreements with different companies at the same time to kind of supplement whatever amount of hours it is or exposure that you want. So, I love that you guys both have that as an opportunity, a possibility. And I also love that you guys are no strangers to having some great wine. The last time we hung out, we got into just some incredible wine and just shared some fun stories. And I know there’s plenty more of that coming up in the chapters ahead for you two but also for the three of us, which will be fun. Question for you in wrapping things up here. Are there any last words of advice or wisdom that you would offer those who are watching or listening to our interview?


Rob Taylor: You know, I think we, gosh, we’ve covered a lot of ground today and talked about a lot. I mean, reflecting back on some of the things we’ve discussed, I mean this idea, especially if you’re a first-time entrepreneur or really trying to figure out your path forward, assuming you have an idea and it’s about how to fund it, surround yourself with really strong mentorship of people who have been there before you and all these regards. I think that’s probably some of the most important things we talked about today. Don’t feel like you have to do this on your own. There’s lots of accomplished folks out there who, by the way, all did this too. They all surrounded themselves with really strong mentors, and now we are ready and have been giving back. And so, the people who are out there, take some initiative, find out who they are, and get connected.


Chris Taylor: Yeah. Now, it’s my number one thing as well. And I think you’d be surprised. Each ecosystem and community is different. I think especially in Austin, it’s a very rising-water-lift-all-boats your kind of city. There’s great resources like The Capital Factory or Techstars for growth mentors here. But ask. You’d be shocked about how one conversation about, “Do you know anybody who knows about this?” or, “I’m having trouble mentally getting over this issue. I’m having a really hard time,” you know, very quickly and the seven degrees of Kevin Bacon way, you’ll get to the right people. And you know, it’s pretty much even as I’m thinking about what’s next or how I can help, I’m mainly doing that by just reaching out to my network and having conversations and starting to really reconnect with folks and having these kind of deep conversations about what’s really going on in my head and being really open and transparent in those conversations.


Justin Donald: Yeah, that’s great. And I’m sure there’s also a lot of travel and experiences in your future as well. I know between you and I, Chris, and maybe we’ll talk Rob into this as well, you know, we’ve got our Golden Visa Program going for Portugal, which is nice and getting a chance to be able to spend extended time there as well as the rest of the EU. It’s just going to be a lot of fun in the future and it’s always fun with more people. So, Rob, we’d love to have you join us.


Chris Taylor: I’m working on him. Glasses of port on the beach sounds like an amazing way to spend a couple of summers.


Justin Donald: Yeah. That’s so cool. Well, gentlemen, thanks so much for joining. This has been a blast. You know, I just love our time, I love our conversations, and I look forward to many more here in the future. For anyone who wants to get in touch with you, what’s the best way for them to reach out?


Chris Taylor: Yeah. I’ve managed my network through LinkedIn. I’m squarerootceo at LinkedIn, and look me up, connect with me. I mentioned the podcast. I keep a pretty tight network but mention this podcast and I would love to continue the conversation.


Rob Taylor: Yes. Same for me. LinkedIn is the best, robertjtaylor on LinkedIn. And, yeah, look forward to connecting.


Justin Donald: Very cool. Well, I’d love to end this episode the way I end every episode, which is this, what is the one step you can take today to move towards financial freedom and a life by design that you truly desire on your terms, not by default but by precision and intention and really just creating it by whatever is best and whatever you see most fitting for you. Thanks. And we’ll catch you next week.

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