🔥 LIVE | Michele Romanow’s Top 3 Success Secrets & Real Estate Tips! 💰

You've got to find the light. It's a really good question. So first of all, this isn't a career for the faint of heart. It's a career where you're going to have an exceptional amount of pain, where you can make an exceptional amount of impact, and you can make an exceptional amount of money, but it is not easy. This is not a career where you're trading your dollars for your skills. This is a career where you're going to try and build something that largely hasn't been done, and there's an element of risk to that. So if you're ready for it, you should do it. I always say that no one should be an entrepreneur unless they want to be an entrepreneur. That's kind of the first thing. Then the second thing is you need to just have—not a lot of people, but you need to have a couple people around you who really understand this and support you. So for me, I had an exceptional co-founder for 20 years—actually 10, that's my co-founder. I had a couple of other entrepreneurs that went before me that I could bounce ideas off of, which is why rooms like this and building networks like this is really important. Because when you're in the process of—like I call it the chewing glass part, just so painful, everything's going wrong all the time—you have to be able to call people like you or your other friends who have been founders and say, "Look, was this what it was like for you?" And they'll always say yeah, because every valuable company that has been created almost went bankrupt, not once, not twice, like the whole way out. Apple didn't almost make it at one point. Nike didn't almost make it at one point. You look at these companies, it's like there's no exceptions to the rule. It's very, very messy to build a business.

And so if you can keep people around you that are good, if you can keep other entrepreneurs around you who can remind you that it almost didn't work for them and then it did, and they can remind you to focus on the things that matter. Because one of the things that happens as a founder is that you'll have an idea and you'll tell all your smart friends. And most people's friends are not just founders, they're kind of like everyone—you have a smart lawyer friend, a smart doctor friend, a smart accountant friend. But those aren't the friends you really want to talk to. So all of those friends are really going to want to point out why your business might fail and why it sucks.

And the worst part is, Ken, they will be right. They will be correct in identifying all the risks your business has, but you do not build a business by taking your risk level to zero. You build your business by focusing on a couple things that really matter and getting those done. Because again, one partnership could change your business. One deal could change your business. Getting a killer price on a property could change your business. Figuring out before you buy something that there's a huge, I don't know, septic, sewage, environmental problem that's going to cost you an extra million dollars—that you need to know. So you have to focus on those things that move the needle. And then I feel like you grow this resilience shield, it's probably the way to do it. The hardest things that I've gone through in my career—I mean, as a side note, I literally had PayPal at one point pull a personal guarantee. They almost shut down our whole business at one point. I remember we had one deal that went sour a long time ago. They called us with like six PayPal lawyers on the phone with like these three little founders. They're like, "You guys are personally liable for a million dollars." In the back of my brain, I was like, "I have $10,000 in my bank account. I'm so fucked." And my co-founders didn't have much more money.

And I remember being like, if they actually pull this personal guarantee thing—first of all, I had no idea it said personal guarantee when PayPal did my payment processing. It was like in size six font somewhere as one of the reasons, and one of my big motivations starting Clearco, because I was so angry for being screwed over early in my career. I thought it was so unfair to founders. And every single day, I thought I was going to not only have to bankrupt the company, but bankrupt myself personally. And I woke up—I was maybe 25 years old at the time—I woke up every single night at 3:00 in the morning, cold sweats, for like 35 days straight.

And I fought my way out of the situation. We made deals, we did so many things to fix the problem when we had it. But I remember after I had lived through that, I literally felt like Superwoman. I was like, "Oh, you can give me anything. You can give me a person that's quitting, you can give me a market change, you can give me someone suing me, it just doesn't matter, because those are very normal things to happen in the course of business." And so part of this is that you grow very, very strong as you become a very good operator, because you've just seen so much that nothing phases you, and you have a very good toolkit.

10. A decade.

I listened to like 200 at least a season, so there's like 2,000. I probably see an equal number of pitches off the show because I'm an angel investor, so it's like 4,000. I've seen at least—from just structurally doing this, I've never actually thought of it—at least 4,000 pitches. And then I've been doing this since undergrad, so that's probably like 10,000, in addition to your own pitches.

For sure.

Okay, well, the very first—and it seems kind of obvious—mistake, but you have to be extremely ready for a pitch. Do not show up for your first pitch meeting unless you've practiced the pitch not like twice, like 10 times. And you practice this with your partner, you can practice with your co-founder, but you need to have the words rolling off your tongue so seamlessly. Because as soon as you get into a pitch, you don't understand, you're going to be interrupted like a hundred times.

And so being able to keep your train of thought and being able to deliver your message is exceptionally important. And just your fluidity and your strength with numbers, like you have to be able to do those so fast. If you're stumbling, the automatic thing from an investor is like, "Oh, you don't know what you're talking about." Second thing that I would say is a pitch needs to be just personal enough. No one wants to hear your entire life story and your bleeding heart story, but you need to tell me how you are going to be an exceptionally resilient human. So telling me some stories about probably when you struggled or when it hasn't gone well, when you fought through and got a great outcome, is pretty important. And why you're starting this business and what this means for you, because one of the crazy things is that humans don't really remember numbers that well. It's really crazy. You really remember if the numbers made sense or didn't make sense, but in a week from now, it's very hard to remember exactly, was that $70,000, was it $90,000 in there, something around that, right? But you can remember someone's story forever. Let me give you an example. How many people remember the story of The Princess and the Pea? Literally everyone. When is the last time you heard the story of The Princess and the Pea? Like 28 years ago. Like we all remember this stupid story about this girl sleeping on a pea and she couldn't sleep. And it's, I think, part of human evolution. We are literally structurally designed to remember stories very differently than we are designed to remember facts. So you need to tell a memorable enough story of who you are. And again, if it's a great property, it's like this person grew up here and a tie here, and it's this theme and this is why this matters to them. That will always stand there.

And then my third thing is you need to remember that when you pitch, you need to set up a lot of meetings. Every single round I did at Clearco, I did 100 pitch meetings a round, like a true number. That's not an exaggerated number: 100 meetings every round. Because it takes a lot to find the right match. You're effectively looking for a marriage with no sex. Think about it. You are financially tied to your investors for, you know, 10 or more years usually. It's very, very difficult to buy out an investor for the most part once they become an equity investor, and you guys are tied. And so it's not only you that needs to raise the money, it's also them that needs to feel like there's a really good bond, and you just get that by doing a series of meetings.

Oh, good questions. Okay, let's start with the one that got away first. So five seasons ago, six seasons ago, a 21-year-old blonde girl walks on the show with a backwards baseball cap, T-shirt, and jeans, and she says, "I really like candy, but sugar's bad for you. So I spent a bunch of time in my kitchen cooking up these stevia gummy bears." So we taste these gummy bears—I mean, I like candy, so I'm like, let's taste what these are like—and the gummy bears, they taste pretty damn good. I'm like, none of this story makes a lot of sense. Like you're 21 years old. Usually when you make new consumer packaged goods products, you have like a food science team, but I guess you could have bought the molds on Amazon and cooked with gelatin a bunch and figured this out. And she says, "Look, I've done a couple hundred thousand dollars in sales and I really want to do a deal." So I miss getting the deal on the show, which is fine because she does a deal with Jim. And the deal doesn't close. So she comes back to me, and I remember it was 2017. I remember she's sitting in my office like this, and she looks at me—I mean, when you're a kid, and I started as a kid, so I tend to be friendly to kid entrepreneurs—and she goes, she's doing $2 million in sales, she wants a $20 million valuation. That is rich in consumer packaged goods land. A 10x is really rich, right? You're usually like one to two times revenue at this point. And she goes, "Michele, I'm not selling this company for a dollar less than $20 million." That is like a bold amount of confidence for someone that started in their kitchen and is merely running this. So I couldn't get around to putting money in at $20 million. I just thought it was way too high at $2 million in sales. I loved the product. I did like her. Tara Bosch sold her company last year for $400 million in cash.

I mean, it could have been anything, right? I could have put in 100 grand. The whole point at 20 times is like you're up so much, right? At that point, could have put in a million dollars, could have put in 100 grand. You can still kind of negotiate with these deals a little bit after they come off the show. But whatever it was going to be, it was, you know, 25 times that. So anyway, the company was called SmartSweets. You've probably seen them all over Canada and the US. It's actually a very good low-sugar candy product, but I'm so proud of her. We're really good friends now, but she is always my one that got away.

I've also invested in a lot of other 21-year-olds that lost my money, so it's not—they're age-agnostic. I will give you some other deals. I have a lot of deals that I liked and a lot of founders that I've just become really deep friends with. The founders that I invest in, they come to my birthday party. You really get to know these people really well. One very good story that I have is we invested in a Chinese founder who came on with a fingerprint padlock.

Padlock, yeah, called Tapplock. Actually a really great product instead of you needing to remember a code or a combination, or any sort of property management tool where you actually want to see how people log in and log out and who's actually going into a storage locker or a utility closet or something like that, works really well. And we invested in Michael, and this company has done well, but it's not 100x, you know what I mean? It's grown steadily year over year. What we didn't know when we invested is Michael's family is not a little deal in China, like a big deal. So then during the pandemic, we literally had doctors calling us looking for masks and all the PPE that things needed. Trudeau's planes weren't leaving Canada. And I remember at one point, because of Michael, we had brought in one-fifth of all of the PPE into Canada eight months into the pandemic.

It's a really cool story. And we literally did it just because Canada needed help, but you would never have guessed it from a fingerprint padlock company, that it would go to probably one of my most valuable Chinese relationships.

So another really cool company story is a company called RVezy, and this is a good story about how founders often matter more than the business model itself. Has anybody here heard of RVezy? Yeah. Is anybody a user on the platform? Yeah. Anybody have a vehicle they've listed on it that they rent? Oh, that's amazing. So this is a great one. Will and Mike come on the show, they say, "We're going to build the Airbnb of RVs." What's remarkable is the season before, we had two founders from Calgary that came on with literally the identical pitch, like, "We're going to build the Airbnb for RVs." The founder from Calgary hadn't figured out the insurance thing. Everyone's like, "Why can't Airbnb build this?" Well, because you're renting a moving vehicle, so there's a whole insurance component of doing this. It's way more difficult than renting a stationary home. And the RV guys came on, they said they had personally bought four RVs themselves and started renting them out. I knew that they were serious. They were an ex-police officer—which same background—and an ex-military veteran that had gone to Afghanistan. And they had like 100 RVs on the platform already when they were on the show. But that's like nothing, you know what I mean? It was very, very small. I think I invested $150K at a $500,000 valuation, and this year they'll do like $80 million of revenue.

Yeah, so that was like a big win. That was a really big win.

Yeah, that is exactly what I was saying about being able to start by telling your story really well. I never assume, even though I have a big public profile, that people know who I am. Every single time I meet someone, I introduce myself like, "Kid from Saskatchewan I am," and I'm like, "This is what I've done with my career: done this, then this, then this." I have a way of telling my story in 90 seconds or less where I can really give people a sense of what I've done, what I've made. It is probably one of the most important parts of your pitch. The second thing that makes you a very investable entrepreneur is this magic elastic band between the ability to listen and the ability to push back. This is why it's a really good spectrum, because if I'm talking to you and I'm asking you questions, and everything I tell you, you're like, "Oh yeah, that's a great idea. Oh, that's a great idea," I'm like, does this guy know what he's talking about or does he just listen to me? That's taking too much advice. Because sometimes you have to correct the investor. Sometimes you have to say, "That's actually a good idea, but in this situation that doesn't work because rainfall here is 90% of the year." And then the investor is like, "Oh, this person really knows their stuff." And so there's this magic point where you have to be able to listen to an investor, but you have to be able to push back and share your vision for the future.

Yeah, so those things, I want to be very clear, are basic table stakes. The person you are going to get if you're posting in a Facebook group, "I instantly need $100,000," is going to be your worst enemy.