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Confluence.VC Podcast Interview: Alternative ways to build passive income

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Podcast Transcription

Clay:

What’s up? Welcome to the Confluence.VC Podcast. This podcast is meant to give you a personal glimpse into the next era of investors and operators. This week we had on Kenny Rose with FranShares. FranShares makes it possible for anybody to build up passive income through franchise investing. Their team is planning to open up access to the product soon, you can sign up for the wait-list for free using the link attached in the description. In this talk, we cover the appeal of cash flow compared to speculative bets, creating hype before a product launch, and unromantic parts of startup life.

Tyler:

Everybody, welcome to the Confluence.VC Podcast. Today we have with us Kenny from FranShares, pioneer in small business investing, and we’re not talking pre-seed. So Kenny, want to tell us a bit about FranShares? How we can start investing in franchises through a very easy means? And more importantly before all that, tell us about you and why you’re one of the dopest people that exists?

Kenny Rose:

Oh man, I appreciate that. You haven’t even gotten the full story yet. It’s great to be here, appreciate you guys having me on. Kenny Rose, founder and CEO of FranShares. I actually got my start off in the finance world. Ty, we were talking before about, we both lived in San Francisco at a point, I was actually a financial advisor at Merrill Lynch up there. And it was my big taste of, I get in the boiler room and dial in for dollars behind the big glass wall there, but this is also when Greece’s economy started going down the drain. And the economist in me is like, “Hey, that shouldn’t really affect our stock market much, it hasn’t before.” But then all the headlines starts sending everyone’s portfolios into a spiral, and it just drove me insane. And I was like, “You know what? I want to see what else is out there.”

Kenny Rose:

I also saw online brokerages coming up. I was like, “This isn’t the long term for me.” So I started talking to some family friends, looking at other ventures in life. And one of them was the CEO of a company that coaches CEOs, so no brainer for me to talk to. And I was taken away, he’s like, “What do you know about franchising?” I’m like, “Franchising? Like McDonalds? Subway? Taco Bell?” And he’s like, “Well, yeah those are some. But did you know my company’s a franchise? So there’s a franchise for coaching CEOs?” He says, “There’s franchises for everything.” And I’m like, “Okay, well that’s a big industry to not know that much about. So all right, let me hop in and check it out.” So he introduced me to a group of franchise brokers. Have you guys ever heard of a franchise broker before?

Tyler:

Dude, I get ads for them on YouTube all the time because I’m always-

Kenny Rose:

Oh really?

Tyler:

… looking up [inaudible] and get rich and [crosstalk].

Kenny Rose:

All right, so you’ve heard of a little bit. Perfect. So-

Tyler:

They try to charge you so much on YouTube, you know the real ones.

Kenny Rose:

Because the real ones don’t cost anything. So how it works is that most companies or sorry, most people don’t wake up in the morning and say, “Hey, I’d love to go buy a franchise. Let’s get after it.” And even if you did, there’s over 4,000 different franchises out there, they go 100 plus different industries. And so to find the right one, those companies are spending tens and tens of thousands of dollars to find a franchising. And so as a broker, you actually work with them, and the clients looking for the right franchise to invest in, you educate them on franchising. You get an idea of what their budget, their skillset, their goals are, recommend specific fits for them and coach them through the research process. And at the end, it’s free for the client because the franchise is paying you for it, because they want to save the time and money that is finding a franchisees.

Kenny Rose:

So literally you could skip talking to me, go straight to Super Cuts, it would be the exact same investment. And so that’s what I did for five plus years. And I worked with the world’s largest brokerage, started off doing business development for them, more in the ins and outs. And then eventually I took over LA County forum. And then while I’m doing this, every convention I’m going to, there’s seminars that are coming up on stuff I pretty much came up with. They stole emails from mine, through in the corporate training manual. And I’m a co-author on an Amazon bestseller I don’t get royalties for. So I got to this point of, I might be helping you more than you’re helping me. And it’s going to go to the larger company, I’m going to go start my own business. And so I moved out to Chicago, started my own brokerage called Semfia, and I had a big focus on what I was hearing more from clients.

Kenny Rose:

And they say, “Hey, I don’t really want to leave the corporate world and be an owner operator. I want a side business, I want to have an investment there that’s semi passive cashflow on the side.” So if you think of Super Cuts as the example, you walk in, the owner’s not there cutting hair, they have a manager in place. And as an owner, they’re managing the manager. So I really focused on this side of it. It kind of mixed my background in finance and my background in franchising. And I also wanted to make sure people got education on franchising because most people don’t know anything about franchising, they know basics of the business model and it’s generally fast food. And so I started off writing on Quora, the question and answer site. And one of my answers, I got millions of views on it, but one of my biggest ones was on how much a Chick-fil-A costs.

Kenny Rose:

And that one got sent out to 40 million people. If you read the Hustle at all, they did a Sunday story and I was the main source for it. And then I just started reaching out to other journalists, talking within the network, got featured in Forbes, ABC. And in February this year, I had a whole Business Insider article on me and my work in the industry. But throughout my time doing all this, I kept getting a lot of the same questions like, “Hey, I love the idea of owning a franchise, but I don’t have six or seven figures of cash or I’m not leaving my day job. I don’t have spare time on the side. Or does my skillset actually transfer over to it?” You could be a great IT manager, but then when it comes to managing hair stylist, you’re in a totally different ballgame.

Kenny Rose:

And so the idea really kept brewing of like, hey, people should be able to passively invest in franchise ownership that’s managed for them and grouped together with other investors. And so I’d been sitting on this idea for a while and then the pandemic hit. And I was sitting quarantine and I read an article that people were gambling on the stock market because sports weren’t on. And I was just like, “Oh my gosh, I’m late. I need to get this going yesterday.” And so had a bunch of friends in the startup world, got connected with the lawyers and everything, and then we put FranShares together. And went out… It was funny actually, when I was fund raising [inaudible].

Tyler:

You got to give us an elevator pitch on FranShares.

Kenny Rose:

Oh the elevator pitch. Sure. So FranShares is an alternative investment that lets you invest in fractions of a franchise portfolio, that’s diversified across multiple locations, different geographies and different industries. You can invest for as little as $500 and you earn equity in the growth of the franchise value as well as passive cashflow from the income that those franchises produce. How’d I do? I’m working on it.

Kenny Rose:

Oh, I love it. Love it. He’s too good to me.

Tyler:

It’s beautiful.

Kenny Rose:

Yes. And then I went and started talking to VCs about this. And it was funny, I must have reached out to 300 plus VCs, I may have gotten two or three calls. And I was just like, “All right, well, let’s have these calls.” And they were just like, “Hey, great idea. But it’s early.” And I’d keep hearing that. And I wanted to prove them wrong because I knew this would work. And so I started reaching out to angel investors. Actually, as soon as I decided to start reaching out to them, in three weeks I raised a little under 600,000. And I was like, “Great. Now I need to go find a venture group.” I need some more prestige and credibility behind it.

Kenny Rose:

And so I started networking more with VCs again. And it’s amazing how much they answer your calls when you say I’ve already raised half a million. And then eventually through networking, I eventually got introduced to Chicago Ventures. And Chicago Ventures was just coming off one unicorn after the other, M1 Finance, Cameo, Project44, I think they had six or seven this year. And talking with a bunch of VCs, I got a lot of the same comments before. It was like, “This is a good idea. You’re definitely the guy to do this, but I don’t know anything about franchising.” And I’m just like, “I can’t really fault you for it.” And then I come to Chicago Ventures and Stuart Larkins, one of the founders of the fund, I find out after several calls with other people on the team, my first time about to meet Stuart, I hear two seconds before he hops on the call.

Kenny Rose:

So I just found out Stuart’s actually invested in franchising before and I’m like, “Oh my gosh, how have you never mentioned this?” We hop on the call. I just bull my way through. I’m Stuart, “Tell me about your investment experience with franchising?” And he is like, “Oh, I rolled up 500 KFCs to be the largest franchisee in their system and then sold it to private equity.” And I’m like [crosstalk]… Yeah, only.

Clay:

That sounds like peasant activities to me.

Kenny Rose:

For us in the future. Don’t get me wrong. All of a sudden, remember when you were talking about 500, that cute little thing, but-

Clay:

[inaudible] it’s not at least six digits, come on.

Kenny Rose:

Yeah. So I write that, I’m just like, “Oh, so you get this.” He’s like, “Yeah, I get it.” Right then I’m like, “Oh, we’re done here. This is great.” And then we finished out the round. And this whole year leading up to, we’re launching next month. But we just start doing paid ads literally Thursday last week, and all this… so this is a live update. You’ve probably seen it flipping behind me. Whenever someone signs up it live, goes on there. I got this little in-person counter for it, I like taking the offline with the online together. And but so really just through word of mouth. I emailed a bunch of people that I was close with and then I started posting on LinkedIn. Posted in two Facebook groups and now we’re just shy of 3,500 on the wait-list. And it’s great, man. Also the support we’ve been getting has just been incredible and super happy with where we are so far and just getting warmed up.

Tyler:

We love this. And so break down to us really quickly. What do I need to do to get ownership in a franchise on your platform? [crosstalk] Do I… Yeah.

Kenny Rose:

The great thing, right now, it’s as simple as go to FranShares.com and hop on the wait-list. And we’ve got 3,500 on it, it really depends on how high the average investment level is. Because when you sign up, it’s been great. Because there’s a survey that pops up now of, “Hey, where do you live?” And a bunch of demographic stuff, including, “Hey, if you’re thinking about investing in this, how much would you want to invest?” And it’s great because since this hasn’t existed, we’ve gotten everything from your 18 to 24 year olds that want to do 500 bucks to a couple grand, all the way to your 55 plus that want to do 100,000, 200,000. We’ve gotten a bunch of 500 thousands. And we’re also talking with a bunch of family offices about getting in the first fund too.

Kenny Rose:

So it could be a 1000 investors, it could be 3000 investors, it could be 500 investors. That’s the beauty of when we go to launch time. So good to get on it now before we really start investing in the marketing and also launch it.

Clay:

Everybody’s got to sign up with my referral link though. I’m going to link that everywhere.

Kenny Rose:

Yes. So Clay, I moved you up the wait-list. I gave you credit for 50 on there from your e-blast out. And thank you so much for that. But got to use your referral link, because we’re going to give everyone 50 bucks for every referral that ends up investing with us. We actually haven’t even that to our… we haven’t announced that to our wait-list yet. We’re suiting that out next week. So we got a little early insight here.

Clay:

Let’s go. I’m going to shoot that over to you right after this Tyler.

Kenny Rose:

Oh yeah [crosstalk].

Tyler:

I’m not going to lie, when you said that the counter just went up, that was me. So-

Kenny Rose:

I love it.

Tyler:

All right, Clay.

Clay:

I was looking at that in the background and I saw it go up, I was like, “Oh, I wonder what that’s for.”

Kenny Rose:

It’s funny. It’s the little hidden elephant in the room. You’re like, “What is that?” My favorite is, we’re going to be doing another race for the company itself after the first fund, and so whenever I’m talking to the VCs, I just don’t even mention it. And then it starts flipping in the background eventually. “Well, what is that? ‘Oh, that’s our wait-list.'”

Clay:

Yeah.

Tyler:

I’m looking at the annual returns on here and it’s pretty crazy. 26 to 33%, 42.7 to 98%, 50 to 150%. Breakdown for us in our community who are typically investing in illiquid, highly speculative, high return upside potential companies. What is the reason they should be jumping onto this versus what they do today?

Kenny Rose:

Well, diversification, that’s the main one. As a former advisor, I got to say, they’re always supposed to be diversified between your regular, your alternatives, cash producing, dividend paying, a little bit of everything. And these days everyone who wants a balanced portfolio that does have cash production, there’s only so many options to get that cash production these days. There’s dividend paying stocks, which can be inconsistent. And then the other main one’s real estate. Which with real estate, look at the last year or two especially, the price’s have gone through the roof. You list the house, people come at you at 10% over all cash offers. And now you’ve got institutional money coming in, you’ve got international money coming in. I read somewhere that one in seven single family homes is owned by institutional capital now. So when you’re trying to invest in cash producing real estate, the prices are going up, which means your returns are going down.

Kenny Rose:

And franchising is just this great avenue where we’re building the assets because their locations of new businesses, but have the predictability that we can see the track record of what the other locations have done. And they are higher production because they’re cash producing businesses that are in these very different areas. So most people think about fast food when it comes to franchising. And that’s why you’ll see all those different ones you’re looking at, only one of them was in food and that’s not a fast food one. Fast food’s a really… it’s not a great area to invest, to be honest. It’s what franchising’s known for because food is the most competitive industry known to man. But they have the highest startup cost. I call it the war for pennies, the finished margins, highest number of employees, highest employee turnover. It’s a nightmare, I don’t want to deal with that.

Kenny Rose:

So instead we look at things that are predominantly service businesses. So things like hair care, automotive, fitness. We’ve got waste management in the first fund. And so these are things that don’t have inventory, have very few employees, a lot of them don’t have a storefront. And it’s like, this might not be what people think of, “Oh, that’s not what franchising is,” but they’re franchise businesses that make healthier margins. And so this is what I felt people on [inaudible] is that like, “Hey, these are the smart business to invest in.” And we were talking before about how I said I was told that they franchise everything. I have seen absolutely everything. There’s the traditionals, hair care, automotive, fitness. Even fitness, there’s 20 different subsections of boutique fitness now. I’ve done clothing recycling, custom tailored suit franchises. There’s even sex shop franchises, Adam and Eve franchises.

Tyler:

Yo, I [inaudible] all the time. Wow. Okay.

Kenny Rose:

I had a client come in and say, “Hey, want something that’s got a lot of e-commerce aspect to it.” And I’m like, “Honestly there’s some, but I got a really good one, but I don’t think you’re going to like what it is.” He’s like, “I don’t care the industry. It could be any industry.” I’m like, “I’m really going to push you on that. Are you sure?” He said, “Yeah.” I sent him in an email, my whole outline of what I like and everything. And I’m just like, “Man, I’m probably going to piss this guy off, but hit send.” And he comes back and say, “I love it.”

Tyler:

We got to dive into the numbers here a little bit. Because the whole piece of I don’t care is basically saying, “I need my money. I want the premier asset to this type of thing.” So from a principle investment perspective, I’m not going to say how much Clay and I invested in a Confluence versus how much we make from it, but you can have pretty good of returns, right?

Kenny Rose:

Yeah.

Tyler:

What are the average principal payback period for some of these types of companies when you’re consulting? What are the returns? What are the cash flows that come out of them annually or monthly? Or just generally, how does it work?

Kenny Rose:

Yeah. So Tyler, I have to choose my words careful here, because we are regulated by the SEC, because we’re registering as a fund.

Tyler:

Okay.

Kenny Rose:

So I can always say so much, but what’s great [crosstalk].

Tyler:

Okay. Fair. That’s [crosstalk] fund versus individual.

Kenny Rose:

Yeah. So that’s part of why we’re doing the regulation A plus process for raising, so that we can work with accredited and non-accredited investors. But what’s great about franchising is that franchising itself is regulated by the federal trade commission as a means of consumer protection. And so part of that means we get a lot of transparency in franchising. And when you hear about people who make a bad investment in franchising, a lot of times they don’t read through this whole document. But so what’s included in it, it’s everything from who the management team is, what their background is, what the franchise’s background is. Has anyone on the team or the company had bankruptcies? Is there any legal action against the franchise? And then the parts that you only care about and most people want to care about is how much does it cost and what can I make?

Kenny Rose:

And so included with all of these is that you get a wine item of every cost to start up the franchise, from signing the agreement to opening the doors and your working capital afterwards. And it’s also comes to the form of a range because Tyler, you’re in New York, it’s going to cost a lot more to open something there than in North Dakota. And so just saying, “Here’s what it costs,” would be misleading. So that’s why they have to put it in a range. But then on top of that, there’s another section that is their financial performance representation or their earnings claim. And so not every franchise has one, but I only work with ones that do. And so it’s, “What information can you give me?” And this comes in… some do, “Here’s our average revenue, here’s our top third revenue. Here’s our average number of members if you’re a gym, or here’s what our average net profit is.”

Kenny Rose:

And so, especially for this first fund, I only wanted to work with ones that have net profits involved because again, people want to know and I can’t just make up numbers for you. I want stuff that is transparent and you know what you’re getting yourself into. Because this is a brand new asset class, and people tend to hop in without looking through the numbers. This is why… did you hear about the Squid Game, crypto coin?

Tyler:

I saw memes about it, but I didn’t know it was real.

Kenny Rose:

Oh yeah.

Clay:

Didn’t it blow up within 24 hours?

Kenny Rose:

And they stole $3 million from people. Because people were looking [crosstalk]. Yeah. I think they got caught on [crosstalk].

Tyler:

… ICO and people are running off of way more than that.

Kenny Rose:

That is a good point. I forgot about the ICOs. God. I remember someone asked me about doing ICOs back then, I’m like, “It’s too soon. I don’t trust it. And then people abuse the hell out of it.” Which is why I love the way we’re doing is that, franchising is FTC regulated. And then we’re in the process of registering as an SEC registered fund. And so there is layers and layers of transparency here. And so I want to make sure that you’re come with a new asset class, let people be able to look at it and make a smart long-term decision. But yeah. So as far as cash flows actually, if you look at that waste management one and the food one on the website, those are the first two that were including in fund one.

Kenny Rose:

And food, it’s a company called Teriyaki Madness. And the guy who started it, Michael Haith, he is a Maven in the franchise world. He started Doc Popcorn, which grew to 300 locations, got acquired by Dippin’ Dots. Then he started Maui Wowi sandwiches, huge on the west coast and the Southwest. They got bought by a private equity company. And then he came on to be the CEO for Teriyaki Madness. And just such a great food franchise because when you get the Asian food, who comes to mind? That was a question for you.

Tyler:

I don’t know who is a franchise versus who isn’t.

Kenny Rose:

Okay. Well, Panda Express is the main one that comes to mind and the Pick Up Stix. Those are the two big Asian food, either fast or quick-

Tyler:

I was seeing Panda Express. I didn’t know whether or not they were franchised.

Kenny Rose:

Yeah. And so it’s funny because those are the only two that you think of versus how many burger places are there, how many chicken places are there. And Asian foods is such a massive market. And also no one is ever going to accuse those two of being healthy versus Teriyaki Madness does quick, fast Teriyaki bowls. It’s a much healthier alternative for the Asian food market. And they’re doing incredible numbers, which is obviously what anyone cares about. But I look at the management team, the process, the structure, they’re marketing, all these things. And then the other one is in waste management. And it’s just a brilliant business. I’m hoping I’m not giving away too much and there’s still availability for the fund. But again, I like to show people the breadth of the franchise world and how you can make money in very odd places that aren’t sexy, but they’re cash producing.

Kenny Rose:

And if you think about any apartment building, any commercial building, manufacturing, construction, everyone’s got dumpsters outback. Cost a ton of money to haul those dumpsters off to the dump every time. This company’s called Smash my Trash. They literally drive this giant rig up, mash everything down so that the business owners can keep filling it back up. Saves you 20% on your haul off expenses and they literally do everything for you. You don’t even have to talk to the guys. And they make money handover fist, it’s amazing. Average location costs 350 to 400,000, and average location net is 600,000. This company’s five years old.

Tyler:

What?

Kenny Rose:

Yeah.

Tyler:

Dude, what’s cool about this is these are effectively early stage startups.

Kenny Rose:

Yeah, kind of. At the same time they’re not too [crosstalk]. Yeah.

Tyler:

And they’re profitable. It seems like people should do… actually, what you should do at some point is start finding the ones that actually have potential to scale based on TAM, investing early at very low multiples and then getting VCs to dump money in. You should just do a partnership with Confluence, we’ll go help them raise money.

Kenny Rose:

Tyler, come on. Don’t pretend I’m not thinking of this.

Tyler:

All right. Clay, you want to be LPs in this fund? You want to do a syndicate to invest in this company?

Clay:

Dude. I just told you, absolutely. Kenny, I’m emptying my brokerage account and [crosstalk].

Kenny Rose:

I love this. Awesome. The support’s been so… it’s been my baby. I came up with the idea six years ago. I heard a fundraise do a series A and I’m like, “I’m going to do that for franchising.” But I was much younger man and I wanted to build up myself as a business owner. That’s why I started the other brokerage first instead of raising money for this.

Tyler:

Patience. And do-

Kenny Rose:

And the market really matured for alternative investments. This is the perfect time to be lunching. A year ago was perfect, this is the next best.

Tyler:

Well, another thing is you could have a completely separate business line at some point where you start these for people on top of a marketplace.

Kenny Rose:

Oh, we’re going to have debt offerings too. A good way to think about this is like, actually-

Tyler:

Well, I’m going to [inaudible].

Kenny Rose:

Hey man, we got another round coming in the next few months after late Q1, early Q2.

Tyler:

And you’re going to raise as a fund or as a startup?

Kenny Rose:

As a startup. So we already did our first company raise and then we’re doing our first portfolio raise in January or February. And then another company raise afterwards. Especially looking at what happened with Masterworks, they just became a billion dollar company. And frankly, I think they’re a great company, I just think we have a superior offering. But also, we’re not competitors, we’re complimentaries. Everyone who’s ever studied finance will tell you, you should have 20% of your portfolio in alternatives as a mean to diversify and have that upside. And I’m not going to pretend we’re going to get all 20%. I’m partners with Fundrise and Masterworks and [Valley]. And here in Vince, these are the guys that are really bringing that 20% to the masses.

Tyler:

We got to introduce you to our buddy from MicroAquire. Either you all can partner or you could kill each other or something, but like-

Kenny Rose:

Oh man, I’m here to make friends until someone tries ripping up my business model, that’s a little different.

Tyler:

Dude, no. They’re like any startup, whether it be SaaS or a coffee shop, they’re just letting [crosstalk].

Kenny Rose:

Oh, I know MicroAquire, I love those guys. I’ve just never met them.

Tyler:

Oh yeah. They were on our podcast too. So-

Kenny Rose:

Really?

Tyler:

You all should friends [crosstalk] Confluence crew.

Kenny Rose:

I started a round table monthly of fractional CEOs, so… Sorry. Fractional investment CEOs. So if you’re running a company that’s this new wave of fractional investments, we meet once a month, we share best practices and ideas and stuff. I don’t pretend to know everything but I surround myself with people who do.

Tyler:

Yo, that’s super, super dope. Okay. So to be clear in joining the platform, because I’m sure a ton of people on our platform are going to join you all-

Kenny Rose:

Love it.

Tyler:

… we’re investing in your fund, not individual businesses?

Kenny Rose:

Yep. In the fund. Down the road, we’ll have individual ones, but for a first investment in franchising, I think everyone should be diversified. You’re already getting into a new asset class to be able to diversify and that makes sense. It’s like, if you were to pop into investing in stocks for the first time, you wouldn’t be like, “Oh, I’ll take that stock and that stock.” Really the best move is getting an ETF, see how it works. Get some exposure to the broader market. And so we’re doing the same thing to start off. But really in the long run, what we’re going to do a lot of is more geographic based funds. And so, you’re in New York, where you get your hair cut, where you go work out, where you get your oil changed, those are things you should own. And also as an investor, you’re going to be a customer, you’re going to be an evangelist. And you it’s the circular economy. It’s this really-

Tyler:

About Kenny, he’s just trying to become Cathie Wood of franchising. That’s what you’re trying to do, if you know who I’m talking about.

Clay:

Yeah.

Tyler:

She runs Ark Invest. It’s this person who ran up a huge investment fund that all people on the internet are obsessed with.

Kenny Rose:

That’s all right. People can be obsessed with me, I won’t be that [inaudible].

Tyler:

That’s my point’s. That’s exactly my… [crosstalk] Clay is a fan of Cathie, I think. He was at least.

Kenny Rose:

Yeah. He’s been quiet.

Tyler:

Yeah. Clay’s managing his crypto portfolio on the background.

Clay:

[crosstalk] I’m scared to jump in and out just because I think my audio’s choppy.

Tyler:

Whoa. Okay. Tell us, you went down the regulatory path, but things are going live soon. What day, if you have one? And then-

Kenny Rose:

We don’t have a specific… Oh, sorry?

Tyler:

I was going to say, what did it take to get to this point?

Kenny Rose:

Yeah. We’re waiting on our final SEC approval. So we have to submit another document or two and then it’s 30 days from there. So it should be late January. Ideally, also nothing ever goes according to plan, but we didn’t have to push back as long as I predicted a year ago. And as far as what we had to do to get here, man, I never talked to so many lawyers in my life. I was very fortunate though, because when I first got FranShares started, I talked to my good friend, Cody Barbo, he’s the CEO of Trust & Will, which is like turbo tax for trust and wills. And he introduced me to the guys over at DLA Piper, which is one of the bigger law firms in the country. And basically I pitched him on this idea, I didn’t have a company formed yet. And they deferred all my legal fees. “Oh yeah. We know you’ll get funded, pay us back.” And so got funded, paid them back. And then right after, he gets poached to start the new Cooley office in Chicago.

Tyler:

Whoa.

Kenny Rose:

Yeah. And so I’m like, “Take me with you.” And then basically Cooley came in and poached all the top attorneys in Chicago, including Christina Rufus who’s one of the top, if not the top securities attorney in the country. They nabbed her from one of the top firms here. And so we basically put together a dream team of creating this regulation A plus for it, which is again, it’s like a mini IPO, but let’s anyone, that’s whether they’re accredited or unaccredited investors get into the fund. And to me, it’s important to get a mix of the two. Because I got a lot the questions of, why not just do institutional only, or why not accredited investors only to start? But it’s really the combination that makes this more successful. You’ve got your big check writers, and honestly your big check writers don’t talk as much about what they’re investing in, versus your small check writers, A, it’s access to more investments they didn’t have before, but it’s also investing in their local community. Plus it’s more built in customers and evangelists for everything in the fund.

Kenny Rose:

And so I think it’s that combination of everyone that makes this work. Plus you’re creating a new asset class, make it available to everyone. It’s going to make everyone happy in general. You make it more profitable, location’s available to more people.

Tyler:

Dude, I think that’s brilliant. I think you should attack everyone. Why would you make your TAM smaller? And you can just tailor the offerings and with this legal squad, you can just chop it up how you need to. That’s dope.

Kenny Rose:

Yep.

Tyler:

Okay. I want to position you to be able to get a lob into your next round, assuming me and Clay don’t take the whole thing. Are there any types of investors in the world that you would love to meet? Or you can even name drop, and we might just be able to make that happen very quickly.

Kenny Rose:

Oh, man. That’s interesting. The investors I’ve spoken with, who I get along the best are the ones who get what I’m doing. And they’re like, “Hey, go build.” I’m not a good micromanaged person. I’ve tried corporate before, it did not work well because I’m not good at being micromanaged. But once you are like, “Go change finance, go build what you want to. And we understand what you’re doing. We understand that finance is changing. Things are getting fractionalized and we want you to dominate this market.” As far as specific investors, honestly, no one particularly comes to mind, especially because everyone I meet… they’re companies and people I never would’ve thought about that I’m so happy I did. Like Chicago Ventures is just the best VC I could have imagined working with to start. And they weren’t originally on my radar first, I’m not going to lie. And so, I’d like to see what… life throws people in places at chance. So I’m excited to meet them all.

Tyler:

All right. So everybody.

Kenny Rose:

Everybody.

Tyler:

You want to drop your Instagram or your email? Everybody spam him if you’re interested, kidding.

Kenny Rose:

It’s @KennyRose28, if you want to find me on the gram.

Tyler:

Cool. What’s something about startups that sucks that nobody talks about?

Kenny Rose:

I’ve one that… It’s different for everyone, but for me, I’m a solo founder. And man, it can be lonely as a solo founder. I started my first business as solo founder too.

Tyler:

So lonely on the cap table when you own so much of it.

Kenny Rose:

Yeah. That’s true. I’m not crying myself to sleep at night, I’ll tell you that. But when I started my first company, I was working out of a co-working space and I met two other friends who were starting their businesses at the same time. And we’ve all grown those businesses together. Well now, I’m sun setting my old business because of FranShares. We all started off like, first come first serve desks and then a dedicated desk and then an office. And so we bubbled up together over the last three or four years. So it’s nice to find those people, but until you do, it’s very lonely. And then especially with starting FranShares, I’m mostly working at home now because… all day, every day. But I hired my first employee a month and a half ago, and God bless him, he’s the best. But until then I was burning at both ends while someone was holding a lighter to the middle. And you just don’t get to talk to a lot of people. It’s unfortunate, but it’s not for everyone.

Tyler:

That is real. It’s not easy until it’s like, “Wow, I’m getting more from this than I would’ve gotten from a job.”

Kenny Rose:

Yeah. People love to say it now, which is like, “Oh, I’m so happy for you. We know you can do it.” I’m like, “Where the hell were you the last couple years I built the other business up.” But like, people don’t really care until it’s right in front of them. And then they’re all congratulatory.

Tyler:

I just talked to a friend of mine who I met at the same stage that you’re at now of his company in 2016. And he just received a $100 million dollar soft bank check. And hopefully going to invest it. I’m not going to say who it is. But he made this funny point. He was like, “Startups are great, but and you think you don’t work for anyone. But most people realize they don’t work for anyone, unless they’re retired, they work for everybody.”

Kenny Rose:

That’s really funny.

Tyler:

Yeah. And even then if you got a family it’s even worse. Okay. What are things that could be helpful to you generally from anyone in our community? And also at some point I would love to know how you all make money. I think it’s some percentage in management fee or something like that, but we cannot talk-

Kenny Rose:

Actually, spoil alert. You’re wrong. And I’ll get into that. Because I love talking about how to make money. Oh, we’ll get to that in a sec. But what was the first one. Yes. Oh, the ask. Go and sign up on the wait-list. That’s my number one ask, also because we’re big on education if you couldn’t hear me this whole time. But you’re going to get an e-book, we’re going to start doing a lot more educational video, so people can just understand all of this before it’s offered, and then refer people to it. Like I said, you’ll get your own referral link and share it with people. Really, I want this to be really an investment for the people, which means the people have to help out too, I’d rather not spend everything on marketing and have the… people should be word of mouth telling this. That’s how we’ve grown the wait-list so far. And I want to really keep that momentum going.

Tyler:

Oh, this is all… Wow. That’s incredible.

Kenny Rose:

Well minus maybe 20 of them, we just started doing paid ads really recently. We’re only testing phase with that. But yeah, I’ve done a… like I said, it’s really just people sharing with each other. It’s awesome.

Tyler:

[crosstalk] less than 1% of his waiting list is from paid ads. That’s incredible.

Kenny Rose:

Yeah. Oh, and I think it’s 15% is direct referrals. And that’s people who remember to use the link. Unlike some people, Clay. As far as the revenue model… So when I was starting this, I looked at all the other fractional investing companies. I said, “What do people hate about them? And let’s work backwards from there.” And so the two things people hate the most. Can you guys guess? We’re looking at Fundrise or Masterworks or Rally? What do you think people hate the most?

Clay:

I was going to guess lack of distributions is one. I don’t know if that’s exactly the right answer.

Kenny Rose:

That’s actually number three.

Clay:

Okay. And then, I think the thing that I kept hearing was just, there’s an adverse selection problem, where you’re not necessarily getting allocation in the best deals.

Kenny Rose:

That was actually not in it either, but I really those also. Because we are solving for those two as well, but the top two I saw were liquidity and fees. And so I’ll start with number two liquidity. Right up the bat… legal disclaimer, we cannot guarantee or offer liquidity. I am doing my best though, because we do have a trading platform that’ll be live from day one. So if you need liquidity, you can list your shares on there and let other buyers buy them for you. Especially because ideally we’re going to have a wait-list of investors afterwards that are going to be looking to hop on whatever they can. And because we’re building the businesses and growing them and they produce income, they should be appreciating in value over time. But so that’s how we’re working on the liquidity piece. But as far as the fee structure, these days you see everything from sign up fee to assets under management fee, to I hate you fee. I was an advisor at Merrill Lynch people, the number one thing they hate [crosstalk].

Tyler:

Is that a real thing on someone’s receipt or invoice?

Kenny Rose:

They use a different label for it, but I’m sure that’s what it is.

Tyler:

No, I think I actually just put it as a joke. But there’s a, I love you fee. That’s the one.

Kenny Rose:

I love you fee 0.0%.

Tyler:

No 0.01%.

Kenny Rose:

Oh, my love’s worth that much, I appreciate it. Yeah. So I work backwards, I’m like, “How do you get rid of fees here?” So we make money in three different ways. The first is, when you look at the financing of a franchise, like I mentioned, all of the costs are outlined in their disclosures. So 80% of that cost is from signing the agreement to opening the doors. That last 20% is working capital. So instead of going to a bank and saying, “Hey, I’m going to put $5 million down and I’d like a $20 million loan.” They’d probably think you’re crazy unless you have a whole lot of collateral. Instead, we crowdfund $80 million and then we say, “Hey, we’d like a working capital loan.” And so we provide the working capital for the business, which is 20% of the cost. So we’re buying in for 20%. It’s not a carry that waters down your returns, it’s us actually buying into the fund with you.

Kenny Rose:

And so in the long run we make money when our investors make money. We don’t take distributions ahead of them, we take them alongside with them. And then also in the longer term, ideally, we’re going to sell a bunch of these funds in the future. So if you’ve got a group of franchisees, private equity loves to snap those up. And so when we sell those, all the investors get their equal share of payout, including ourselves. And then in the short term, how we make money. Like I mentioned, I come from the franchise brokerage side. And whether you talk to me versus going straight to the franchises, is the same investment. So what we do is we are the broker of record as well as the franchisee. Yeah. So we are working with the franchises. We buy 25 locations of each. We get a commission from them and it comes out of their pocket. So literally if everyone somehow did this on their own, it wouldn’t cost anymore. It’s not out of our investors’ pockets at all. And so that’s a-

Tyler:

And you can [crosstalk] a normal broker would because you’re doing it at volume?

Kenny Rose:

Yeah.

Tyler:

Or you have other revenue means as well?

Kenny Rose:

Exactly.

Tyler:

Okay. So you’re passing on to the franchises, help the little guy.

Kenny Rose:

Exactly.

Tyler:

But you’re giving up savings as well. It’s a win-win for everyone.

Kenny Rose:

Well, yeah. Plus we’re a dream franchisees for them, because we’re going to follow their systems. One of the main reasons franchisees fail is they don’t follow the processes and the systems in place, they know better or they want to cut corners on what they spend on. We’re the opposite like, “No, I want to follow your thing to the fucking dot because I know that this is how it works.” And also-

Tyler:

[crosstalk] the franchisee. You don’t just invest, you might lost one too.

Kenny Rose:

Yeah.

Tyler:

So you’re effectively creating a syndicate to launch a new franchise for these people, not investing in the passive franchise [inaudible]?

Kenny Rose:

Well, we are investing in existing franchise brands. So they already have a lot of traction. Like Teriyaki Madness already has 300 plus locations, opener development. Smash my Trash sold 600 locations in the last two years. So these are very high growth franchises, but we’re just doing new locations of them. In the future though, we will definitely be franchising different brands and… The big problem in franchising like I said is that most people don’t wake up and say they want to be a franchisee. So we come in as solving a huge need in the industry where about, I think I said 15% of the 4,000 brands out there hit 100 or more locations. Versus when we have a crowd of investors, we could franchise a brand, make 100 location thing overnight pretty much because we’ve got that infrastructure and investor base and built in support from those investors.

Tyler:

Then you can negotiate lower franchisees.

Kenny Rose:

Yep.

Tyler:

Love it.

Kenny Rose:

We do a little bit of everything. Yeah.

Tyler:

Love it. Okay. Well Clay, come talk to us, man. Give us some quickfire questions after answering Kenny’s question that he gives to us free of charge.

Kenny Rose:

Oh, snap. Free of charge. Well, you know what, when you sign up for the wait-list, I’ve been doing user interviews. So I’m trying to figure out like, what people don’t like about this. What do you guys think is the number one most attractive thing to investors for something like this?

Clay:

I think patient investment strategy for one. Getting access to the cash flow generating assets. That kind of plays into the first one. Alternative investments in general is really interesting to me. I think there’s this overall trend that everybody’s becoming an investor. Doesn’t matter what stage of life you’re at, how much income you have, everybody is starting to put that money to work into different [inaudible]. And it doesn’t necessarily have to be the stock market anymore more. So I think as more people pull money outside of the stock market, or just start thinking of different ways [inaudible] I think this is positioned to win because the historical performance of it, along with your model, I think puts it in a spot where it’s very beneficial for the people that sign up for it. And it’s just a game for you [crosstalk].

Kenny Rose:

Awesome. Yeah, I appreciate that.

Tyler:

Yeah. I’m thinking of cash flows. I want that monthly income.

Kenny Rose:

There we go.

Tyler:

That’s why I asked the principal relative to payback period, to know when I’m in the green and that’s just making me some money. I like the fact that there’s equity accrual here. I will love if one day I could actually just buy franchises in a really simple way. Because when I look at websites, it’s like, you need to have this thing, fill out these 70 forms. If I could have one common app for all franchises and you all maybe ping me for the extra four questions and I can do it through y’all, that’s great. And then I guess some form of standardized reporting to understand it in portfolio management, which is literally what you [crosstalk] for us, so. All in all, you just make my portfolio diversification in that space easy and give me better returns than going to buy apartments.

Kenny Rose:

Love that. Awesome.

Tyler:

Yeah.

Kenny Rose:

Honestly, I love talking to everyone who’s thinking about investing. I think I had 20 of those interviews scheduled this week and you get such great feedback from people of things you didn’t think of. I used the term circular economy, I got that from a user interview. And I was just like, “Man, what a great statement. I love it.” I appreciate that.

Tyler:

Yeah. I guess one thing that I will focus on is speed. Speed to having me in market.

Kenny Rose:

Yeah. Soon, we’ll get you there soon.

Tyler:

Can you give me all [crosstalk].

Clay:

How do I see where [inaudible] be able to see that? And I can’t anymore.

Kenny Rose:

Sorry you cut out there. What’d you say?

Clay:

My bad. I was asking where I can see where I rank on the wait list. I was trying to find it on the website and I can’t anymore.

Kenny Rose:

We just relaunched update to the website yesterday. And so we’re fixing that right now. We were on a webinar yesterday with Rocket Dollar. And so we wanted to have that all set up before we went on there and we just… Yeah. We need update that part. You’ll get it soon though. I-

Clay:

Cool. Yeah.

Kenny Rose:

Because-

Clay:

When this goes out, I’m going to try to be top five, once this goes out because I’m just going to blast it everywhere.

Kenny Rose:

So I already gave you credit for everything that you did before. You’re number two on the list right now.

Clay:

Let’s go, all right. [crosstalk].

Tyler:

What? Yo, can I just mirror him?

Kenny Rose:

Oh man. You got [crosstalk].

Tyler:

… wait-list was [inaudible].

Kenny Rose:

You can have a dual with him and start sharing your referral link.

Tyler:

Yeah. Can we make one for comp? Well, Clay found this, so it’s super fair that he just takes the points. Well, I need to get… I just want to be ahead on the wait-list. Clay can take all the money, I just want [crosstalk] for my spot.

Kenny Rose:

Honestly, if you refer four people, you’re going to be in the top 100 I think, so you’ll be good.

Clay:

I’m going to shoot you my link right after this Tyler. And then you got to just start shooting it out to everybody in your network.

Tyler:

I got to re-hop on the wait-list. Then I want to be even for further behind my other account. It’s kind of-

Kenny Rose:

You know what, if it helps, I can delete your spot in the wait-list so you can sign up through his, give him the one and then you get-

Tyler:

Okay.

Clay:

Everybody wins.

Kenny Rose:

Oh man, I’m going to watch my counter [crosstalk].

Tyler:

I’m going to go spam all of our group chats before Platos.

Kenny Rose:

I hope you’re happy. I get to watch my counter go down, and that’s the last thing I ever wanted.

Tyler:

This is technically your first turn moment. How does it feel?

Kenny Rose:

No, don’t say, that’s sad. [crosstalk].

Tyler:

… ever tells you he has 0% turn, he is lying.

Kenny Rose:

Hold on. Let’s see. I get a… where’s the horn that’s the bad moment coming through? Oh no. Oh, that hurt. That hurt.

Tyler:

That’s sad.

Kenny Rose:

Sorry. You’re going to avenge me and make me [crosstalk].

Tyler:

And I want to get an email that says you’ve been removed from the waiting list, F off.

Kenny Rose:

Oh, I don’t think so, but I kind of want to put that.

Tyler:

Yeah. You’re a bad person. You’re no longer on the wait-list.

Kenny Rose:

Wow. Yeah, actually I should do that.

Tyler:

All right. Clay. [inaudible].

Clay:

Yeah. Kenny, you want to go through quick fire real quick.

Kenny Rose:

All right. Shoot.

Clay:

So got four questions here meant to be answered in two sentences or less. First one is what’s a recommendation you hear regular [inaudible]?

Kenny Rose:

Do what you love and make a business out of it. I love doing business, but I was never passionate about franchising specifically growing up. I lived five years in a town that didn’t have any franchises. So when I hear people saying, “Oh, I’m going to be an artist, make something.” I’m like, “Learn how to build a business first and then make that into a business if you can.”

Clay:

Yeah. Have you ever heard of the DICE Framework?

Kenny Rose:

No.

Clay:

It’s by a guy named Jack Butcher who’s worth following on Twitter. But he essentially says early on in your career, you should just say yes to everything and just collect a bunch of dots. And then after you get a better understanding of what you’re good at [inaudible], for those dots, you got to start connecting them and then build skills or a product around that.

Kenny Rose:

I love that because I’m definitely a yes man for opportunity. Like, “Do you know anything about franchising?” I was like, “There’s opportunity in there. I want to go learn about it.” And then I learned to fall in love with it. So yeah, I love skiing and doing art and stuff, but I’m not building a business around that. I think a lot of people just chase, hoping it’ll turn into a business somehow. It’s [crosstalk] one first.

Clay:

Great example of you being a yes man is just saying yes to come on this podcast, with no context [crosstalk], just through a cold LinkedIn about.

Kenny Rose:

Honestly, I was happy you reached out because it was on a Sunday you sent that out. And I’m sitting here watching football and I just hear this thing flipping and flipping and flipping I’m like, “What just happened?” I’m like, “A bomb went off. What is going on here?”

Tyler:

[crosstalk] annoying once you hear your hyper scale.

Kenny Rose:

You know what? There’s worse things to be annoyed about. It’s going to be great.

Tyler:

Trying to get better in your house?

Kenny Rose:

Yeah.

Tyler:

It’s like damn, “Why I get them this grand piano or even worse, the drone?”

Clay:

Let’s see, next one. In the last year what new belief behavior habit has most improved your life?

Kenny Rose:

That’s a great question. I would have to say talking to… No… Oh man. I thought I had an answer for this. I don’t know anymore. I’ve had so many changes in habits lately. Honestly, eating healthier, I think is definitely a good one. I’ve lost 20 pounds in two months by just changing up my diet. I don’t buy bread or cheese anymore. And even though I love them, it’s good to eat when you go out. But it’s like, when you have that crap in your house, it’s just so easy to go to it. So eating healthier, you feel better and you look better.

Clay:

Love that. I think that’s… We had the same answer like two weeks ago. Yeah, I got more people eating better, that’s good.

Kenny Rose:

It’s because we were stuck inside for so long.

Clay:

I know. You had no other choice. Now, let’s see. Next one. What’s one piece of advice you’d give somebody that’s starting company?

Kenny Rose:

Find yourself a realist. And I don’t mean a pessimistic person. Someone who’s going to tell you the truth. I’m usually this for a lot of people. I say I give realistic insights to those, but a lot of people just want to be your cheerleader and say, “Yeah, that’s cool. Yeah. That’s cool. Great. Go, go, go.” But if somebody say, that’s a dumb idea, that’s not going to work. You can disagree with them, but you need someone one in that other corner that’s giving you pushback on everything and not because they hate life, but because they are actually pushing you to think out differently about it.

Clay:

Yeah. That is good advice. I don’t think I’ve heard of that, but it’s super applicable. Especially once you get funding, it seems like everybody, your advisors, cap table, everybody’s telling you what’s going right. Or I think the advice that’s more actionable is usually what’s not. And then you can build solutions around that. So I think that’s good advice.

Kenny Rose:

Even before that, when you’re just starting the business, I’ve had people who would come to me with business ideas and I’m like, “That’s not going to work. ‘That’s why I called you, you give realistic advice [crosstalk].” And for somebody to tell you that’s just a bad idea sometimes. Again, they could be wrong, but you need someone to push back on it.

Clay:

Yeah. You’re saving them a ton of time, heartbreak and money if you’re going to just tell them before they sink time into it like, “Yeah, this isn’t going to work. This is why.” So doing them a favor. And last one we have, we’ve already alluded to this, but if you had one ask for our listeners, what would it be?

Kenny Rose:

Well, I already asked them to hop on the wait-list. So go find these guys some more subscribers to the podcast.

Clay:

Yeah. We’re going to ask you to help with that too.

Kenny Rose:

Deal. I’ll share this out for sure. Let’s go. [crosstalk]. E-blast for everyone. Share it on social, all that jazz.

Clay:

Yeah. We’ll blow it up. We’ll tag you guys.

Tyler:

A big thing for us right now is diving further into the founder side of things. So we’ve done the quote unquote hard part, which is get a ton of VCs who gets spamed all day to look at stuff, and hang out with us. Now it’s, the even harder part of getting great founders. We want to have the people with the most interesting companies, with the best personalities who are going to be raising in the next year or could benefit from knowing our community. And do you have any people within that bucket? We’re making a pipeline of great people for the next year.

Clay:

Yeah. [crosstalk] who’s your most badass founder friend?

Kenny Rose:

I got a couple of them.

Tyler:

You can maybe get someone from Chicago Ventures on the podcast too.

Kenny Rose:

Oh, they’d love to do that. Yeah. I can get you in Chicago Ventures. Again, I have a round table of fractional CEOs, so they’ll be down. They’d love to. I’ve got a buddy who just started a company that’s… He’s a very energetic fund founder, and he just started one that’s doing a senior care housing marketplace, so you can buy and sell and also get services for them. So that’s another untapped asset class. And it’s very two way market where they need privacy on everything. Because if everyone knows you’re selling it, it’s goes [inaudible]. I didn’t know anything about that market. He found himself in it and he carved a deep niche in it.

Tyler:

Dude, let’s go get some ethical senior home franchises, [crosstalk].

Kenny Rose:

So actually they do. Oh man, senior care anything is one of the fastest growing areas in franchising. Like in-home senior care. Just helping them with things around the house, nurses. They have for everything. It’s a very competitive industry.

Tyler:

Man. I can’t wait to get exposure through FranShares fund.

Kenny Rose:

I’m coming, man.

Clay:

Also, are you guys hiring anytime soon? Because we have a job board where we… I feel we haven’t really given a great background on what all we do. So we run a private community of venture capital investors. We started it 18 months ago. That group has grown now to over 1600 investors from 1100 different funds. I have a few people from Chicago Ventures in there, like Steven Cook, great guy. I catch up with him-

Kenny Rose:

He’s the best.

Clay:

… pretty regularly.

Kenny Rose:

I’d suggest, put Steven on there. Steven’s the best.

Clay:

Yeah, he’s-

Kenny Rose:

He’s the one who found me for Chicago Ventures. Yeah.

Clay:

Good shit. I literally hit him up the other week trying to catch up. We got something penciled for January.

Kenny Rose:

He’s the greatest. I sent him a bunch of portfolio companies to look at. He sent me a bunch of founders and other people to meet, he’s a great dude.

Clay:

I want to hoop with him. He played at Princeton I think.

Kenny Rose:

Yeah. He’d whoop your ass I’m sure.

Clay:

Yeah. He’s a big dude.

Kenny Rose:

He played international pro. I think in Greece, I want to say.

Clay:

Yeah.

Tyler:

I didn’t realize.

Kenny Rose:

No, he’s big dude.

Tyler:

So we got our third player. Me, you and him. And we’re running it off for the VC three on three.

Clay:

Yeah. Tyler and I, we’re both 6’5″. It’s not apparent-

Kenny Rose:

Oh, shit.

Clay:

… when you’re behind the-

Kenny Rose:

Wow. Yeah.

Clay:

… when you’re behind a computer.

Kenny Rose:

I’m 6’2″ and I for some reason didn’t peg you guys the same, it’s funny.

Clay:

Yeah.

Tyler:

Oh dude. Come be on our team. It’s six foot and [crosstalk].

Kenny Rose:

Oh no. I’m an uncoordinated 6’2″. I’m great at defense [crosstalk]. Sorry. Great at defense, my shooting is garbage. If you don’t mind me getting zero points from 10 turn overs, we’re good.

Tyler:

Do you not do-

Clay:

We need [crosstalk]. We need to hustle high energy.

Kenny Rose:

Oh I gotcha.

Tyler:

Do you make lay ups?

Kenny Rose:

Yeah. Kind of. I shouldn’t do a full on yes with that one.

Clay:

Yeah. But yeah, so we have one part of what we do is the community piece, but then we’re highlighting members, like next era investors and operators every week in the newsletter as well as the podcast. But then we also have a job board where we’ll highlight your roles within the newsletter for 60 days as a friend of ours. We’ll just feature that for you for free. So whenever you have any stuff that you need help hiring on, just let us know. We’ll upload that for you.

Kenny Rose:

Awesome.

Clay:

And then I guess the last piece, obviously were interested in your business, want a piece of it. So we run a syndicate and would love to get allocation whenever it does come time for you guys to raise. Obviously, you have other fish to fry and you got to run a business first. But whenever it does come time for you to raise and you need capital, if you’re interested, we’d love to participate too.

Kenny Rose:

Oh yeah, I’ll for sure add you both to my investor update list, so you guys can see more behind the scenes stuff. And honestly I love working with good people. So we’d love to have you in the next round.

Clay:

Yeah. Hell yeah.

Tyler:

Well dude, let us know also… this is something I’ve been thinking about. When we do the startups, what are your thoughts on if we say window for fundraising, next six months, next year? Would you want that information to be out there or would you want to keep it close to chest?

Kenny Rose:

Oh no. I’ll throw it out there. I talk to five VCs a week now. I haven’t been reaching out to anyone, they’re still reaching out to me. So I tell them all the time.

Tyler:

Maybe we’ll put your email for people to reach out or a window. Like, “Start reaching out between this time and this time.” Maybe not today, maybe-

Kenny Rose:

Oh, no. Honestly they can start reaching out whenever, because I love talking to everyone. And honestly, it’s about building a relationship together, not just a transactional thing. So even if we’re not doing it for a few months, I’d like to get to meet everyone now and tell them… well, they’re already going to know a whole lot about me from this, but still give them more of a face to the name and get to know more before we get to that point.

Tyler:

Perfect then.

Kenny Rose:

Love it.

Tyler:

All right. Well, in that case, I think all is Gucci. Love it. Or Louis, because our RIP Virgil Abloh. A Chicago people got us…

Kenny Rose:

Love it.

Tyler:

All [crosstalk]. We really appreciate you, man. And I look forward to speaking with you again and getting my position on the wait-list moved up.

Kenny Rose:

I’ll move you up. I appreciate it, man. Great being on here. And I really appreciate the support guys.

Tyler:

Of course.

Clay:

100%. Thanks again, Kenny.

Kenny Rose:

Thank you guys. Talk to you later.

Clay:

Later.

Tyler:

Bye.

Clay:

Cue. Thanks again to Kenny for coming on. And we hope that each of you are able to pick up something valuable from this talk. If you’re looking to get in touch with Kenny, you can follow him on LinkedIn. Doesn’t have a Twitter. But you can follow his LinkedIn, that’s LinkedIn in the description below. And if you also just want to sign up for FranShares, we’ve also included the signup link in the description below. So do that and build up some passive income.

Clay:

For next steps. If each of you have not submitted your info to become a member yet, you can do that through our website at www.confluence.vc. And also if you want to become a subscriber to the newsletter, we offer a ton of free resources in there each and every week, meant to help you become better at your individual roles. You can subscribe there at www.confluence.substack.com. Hope that helps. Hope to hear from y’all soon.

Emily Norwood

administrator

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