Hello my friends and welcome to another episode of Running with Ryan. Today we are going running with an incredibly inspirational guy. He's been one of the top ultra runners for years. He was named North American Ultra Runner of the year in 2011. He's won multiple USA Track and Field trail titles and he was one of those crazy guys to run across the Grand Canyon and back and set a fastest known time of just under seven hours by the way that's about 50 miles. In 2015 he was running right back here on a mountain called Bear Peak. Just a little training run. He had a very unfortunate fall and a boulder rolled down smashed his leg. Over the next year and a half he had more than 10 surgeries and he was constantly in pain. He made the tough decision to have his left leg below the knee amputated and now he runs with a prosthetic foot. Ladies and gentlemen you're gonna love this guy. He's one of the nicest guys in the sports Dave Mackie. What's up my man? How are you? Doing great. I can't thank you enough for doing this. I'm really excited. Happy to do it. All right. I think you said you need to put on your running blade. Yeah, yeah. I'll throw that on and we'll get going. On prosthetics it's um there's different things that can attach to a socket and one of them is a running blade which I have here. A fill-hour blade. This socket is made of carbon fiber. I ski in this this one right here. I kind of do I work in it. I hike around in it but for running a blade it's much more dynamic and give some energy return. I'm really excited you brought me to South Boulder. I never come to South Boulder. Yeah that's the secret part of town. A lot of people don't don't hang out in which is fine for me. I know. I mean these views are incredible out here. So these are kind of the trails you run a lot or? I typically am west of Broadway. West of 93. That's where I kind of where I live. I just go up in the trails and the peaks there and lately I've been running up Bear Canyon a lot to the back side of green and tag the summit and come back down that way.  What's your daily routine like? It depends. Like I work like four or five days a week. Watch out for the poop. So if I'm not working I usually have one or two week days off and yeah get the kids ready and go to get them to school. Work a work day and work in an urgent care. And I'm a regular dad. Besides having one leg running around. So how does running feel? You haven't had that all that long right? The blade? Right. Well almost two years I guess because I had my leg amputated two and a half years ago. Okay. After a year and a half by the accident almost four years ago and then year and a half later. And the accident was pretty much right about right back there right? Yeah I thought of a bear peak. A bear peak. Yeah the summit there. Yeah it's a lot of complications from the initial open fracture. Yeah and the abutation was probably the best choice. Yeah. Yeah so you live for a year and a half with your leg and multiple surgeries and infections and it just it never came back right? Is that correct? Yeah yeah it I had a persistent bone infection basically that wouldn't allow for the bone grafting to take and hardware failure and yeah if you got an infection this wouldn't go away. Yeah it wasn't like you know like a skin infection cellulitis which what people get typically but in the bone it can really hard to rid the body of it. Yeah. So I couldn't I just couldn't heal and I had options for surgeries but some those would have delayed things for probably yeah you know a couple of years and I watched some videos of you and you just it never looked comfortable. Yeah I was on a cane I'd scar tissue in the leg which I always would be there and probably always be a problem and I found that the amputation was the best choice after talking to a lot of surgeons and people. Yeah. And I imagine that was an excruciating decision.  Yeah it was I was doing all these steps to avoid that but it really wasn't a likely scenario but as time went by it became more possible and I don't know if excruciating would be a term to describe it as more. At a certain point it was kind of like a relief because after a year and a half of you know 13 surgeries kind of like oh wow I wave forward you know the problem will be gone if I amputate it. Yeah. I don't recommend that. I recommend if someone was in my shoes to go through every possibility within reason to avoid it. I think it was definitely excruciating as far as the actual day of the surgery. Yeah that was that was extremely difficult. I was like damn I'm actually gonna do this. Yeah and correct me if I'm wrong but you had like a party the night before it was the night before Halloween and everybody came over and signed her leg. Yeah I am that buddy of mine might cue it. He thought I should have a party. He's that kind of guy and I thought sure why not. So I yeah it's a Flatiron's running company in South Boulder just invited everybody to come the next day I went into surgery. Yeah yeah my son wrote on it like I love Connor and I have pictures of it too. All my friends writing on it. That's all gone. It's in the incinerator at the hospital. Yeah it's not like signing a cat where you can save it and put it on your wall. Yeah. And so you woke up the next day or after the surgery and your foot was gone. Yeah. What was that like? It was hard. I see pictures and video of me at the after surgery and it's man it was really difficult that some that year after the amputation from day one was extremely difficult because it's not you can't go back you can't loosen the body part and woke up and you know I also knew there was kind of like one step at a time to get through the whole process and it was extremely difficult overall. Look at these little cows.  It's springtime in the Rockies. Yeah well yeah let's get away from the dark side of this and talk about the positive side of post-surgery and what you were able to do after that. Yeah yeah so the my goal was to be you know as accurate as possible, as mobile as possible. I didn't really care about competing at races that much but I didn't want to complete some different you know events. Just to kind of get back to where I was just to physically and emotionally and spiritually do dock and you know the same person I was before and I knew that was possible on leg. So I was put at the year after amputation just it's a long process adapting to a socket or a static socket and you go through different changes in the limb and that just takes time to adapt to those. Absolutely. Yeah I knew that I would get back at it eventually. I didn't know what to what degree but I was able to complete some running events and sports events this last year. That was kind of my goal. Not just some sports events he completed the lead man he's being very humble. Talk to us about the lead man. It's a trail marathon in June and then early July of the 50 mile bike mountain bike race or 50 mile running race all in the mountains above Leadville around Leadville and then almost a month later you bike the Leadville 100 bike. Have you bike that? I have not done that yet I really want to do it but I have not. Yeah I'm sure you get like a hundred miles on your bike in two days every day. Yeah I do bike a lot I like my bike. Yeah and 100 mile bike then next day do a 10k and then six days later do the 100 mile Leadville 100 run. Wow because it takes a while to get your balance right with the with the prosthetic leg and to figure out how to run again right? Yeah yeah yeah it's the balance is yeah one thing it's not too bad. Watch out killer geese. All right continue sorry for interrupting. No the balance is too bad they're running on this flat trail right here it's really not not bad with rocky stuff you just have to place the foot more carefully but they really all comes down to the interface of the actual socket with the skin yeah and the limb and that's where you know you can have your skin break down here get a little abrasions and rubbing and friction yeah so you have to manage that can be difficult. In the 100 mile run I was always making about a dozen times I stopped to make a little adjustment through to put a little tape over one area just like someone would tape their foot you know if they had blisters actually the most blisters I have was on my good foot I lost almost the whole sole of my foot. Oh no and your buddy Bob Africa was out there with you yeah pacing you and there were moments where you were like I'm done right? No I never actually said I'm done okay I definitely had a low point out at wind field which is mile 50 yeah okay I read about that and yeah except but I you know just not having done enough of those events I knew that your body goes to your mind your energy or muscles your everything goes through all these cycles out there in 100 miles if someone doesn't have some stomach issues or something happened then yeah they're superhuman yeah totally only a couple people like that that I know of and even those people have their ups and downs and for me it was a mile 50 out at wind field the turnaround point the crux of the whole race is not the whole race but going over Hope Pass which is you know almost 13,000 feet you go over the wind field to mile 50 and you turn around go back over Hope Pass so getting over that pass is was hard but at that turn around you have to turn around and go back and do it again the whole course that you ran out on at that point my my yeah just my energy is really low my hip flexors were just shot below yes turn around and thought hey it's gonna it's gonna bounce back or it's not if it doesn't then you know I'm done but I gave it the chance and I rebounded do you ever whooping holler under bridges I do well that's a good noise I didn't know you could do a dove noise either the things about Dave Mac or as an owl okay sorry I got my birds all mixed up oh is that a coyote usually they take off besides your own you know mental fortitude you know talk about how your friends and family really helped you through all this I mean I'm guessing they were part of the part of the solution in a huge way yeah yeah especially when the accident happened and until an affidavitation it was yeah my family incredibly supportive you know my wife was pretty much picking up all the load of stuff that I couldn't do I mean I was still able to work you know a couple months after the accident of war months probably I took off but she can't take care of the kids and family and the kids are they're incredibly resilient adaptive to situations but Haven Connor you know it's like oh dad had an accident I lost his leg okay let's move on and I try to have that attitude to kids are incredible that way really yeah yeah they are and then make the running community and all my friends just really helping me out of time yeah in the hospital state isn't getting here from the hospital yeah well I remember in Boulder right I knew who you were I didn't know you personally but it was it was a big deal in the Boulder running community everybody knew about it was talking about it sending you their love and it was big you're a beloved figure it was inspiring to see people really rally around you yeah yeah it was a great great support I had in the community yeah it's the Boulder and even nationally it's a lot of kind words and people reached out who had amputations and injuries or severe injuries and yeah it's helped me through there we go Dave guys always a nice guy open indoors for people you know how it is you're on a bike and get off it don't hold the gate that's like gold it totally is you're obviously an inspiration to a lot of people I'm sure you get messages all the time who are some of your inspirations and it could be like who you know inspired you back in the day just even get into running well I started running I guess during college just getting shaped for soccer and I was running the trails there and I just kind of like I like doing this I'm gonna keep doing it and then move to Colorado you know in 93 there's some Bracken Ridge and discovered this trail race up there my buddy Rich Cook put together at the BOEC which still exists the Bracken Ridge Cross Mount Marathon and there's all that that culture of people back then doing crazy mountain stuff yeah like I had no reference for that but like I can run a marathon I did a trail marathon or trail half marathon in Letville my first trail race back to that how people run marathon and stuff and I did it and I got my ass kicked I finished fifth place but I was dying and then just realizing that the the whole ultra there's no limits to distance yeah I think I vaguely knew but there's a hard rock hundred possibly that I had no aspiration to do it but this time went by just you know seeing all the crazy people doing crazy things like I'm gonna try that I'm gonna try this and then my Tom Sobel was a he has an ass kicker back in the 90s winning those trail races tremendous snowshoe racer back the time I got in the snowshoe racing back then Matt Carpenter you know I tried to win Pikes Peak marathon I got second place three times for Matt Carpenter so just seeing you know what kind of animals are out there yeah in the traveling world and and then yeah I was going to all the ultra races and this is a pinpoint one person's more like just everybody at these races are doing you know awesome things and that's kind of you know just inspired by everybody in general yeah and what I love about the ultra world is really the community people are so supportive yeah and you know 99% of the people doing the races are out there just to do a personal best or to complete their first 50k and that's that's really fun energy to be part of so you mentioned something about like doing really hard things and you were one of the first guys to run the rim to rim to rim across the grand Grand Canyon back and set the fastest known time what inspired you and the other the first generation of the FK tears to do that kind of stuff it was um yeah back then that was I guess I did set the record and I knew there was you know there'd been gradually some fast times out there I'd I'd run the you know out and back one other time just for fun just for fun just across the Grand Canyon and back for fun it wasn't high on my radar about instead of the FKT your fastest known time the big term now it was more the last minute some friends are going out and the week before like yeah I'll join in and figure it out just go for time see how fast I can do it yeah and just for that and for that I remember you're just under seven hours which is the new record like five hours something yeah Jim Walmsley is crazy and your sweet spots around 50 miles that right in the past 50 miles or 100 kilometers and then yeah as far as like winning race 50k to 100k yeah once I got to a hundred miles I get get through them but 100 miles is hard speaking of 100 miles I saw on ultra sign up that you signed up for western states yeah yeah I'm gonna I've been back there since at the station so that's kind of a focus race this summer I'm gonna complete the lead man series again that's the plan I gotta see how you know knowing you you're gonna be just fine but yes it will be a challenge yeah and then I have a team or register for the eco challenge in September oh cool that's back big adventure age yeah that's a team event in Fiji is that your spirit animal probably I got you oh yeah they're wild yeah that's true he's a cutie if somebody out there's not even a runner or much of an athlete how can they look to your story for inspiration I mean what what's what can be some takeaways for people out there that are going through hard times or we're going to something very similar to you yeah my my story is kind of extreme you know a fall for the peak and almost you know I should have died from the fall and it was my leg so that's kind of that's a far into the spectrum but more most people are dealing with you know chronic back pain or arthritis and you know these things that are just with you for so long you know often not fixableness you have you know a serious knee replacement or get your spine fused those things are in some ways more difficult than what I'm dealing with so there's always something worse I think I learned from this whole thing there's you know what if I fell and I lost my leg above the knee what if I hit my head or the Rockland on my head instead of my you know which is 300 pound rock I'd be dead or I'd have a serious brain injury for next morning but there's always something worse I guess that's kind of a little bit gallows humor but it's oh I get it you know it really is there's there's always someone out there's going through something harder which is doesn't really change the you know the fact that you know you guys that you're dealing with something difficult but you know things will probably get better I guess that would be the advice I have just keep pushing keep on your your working with your options to work through your difficulty and things will probably get better yeah certainly I like and how do you what do you do on the days that are hard I'm sure you wake up some days and you're like damn it oh yeah I wish I had two feet yeah yeah that kind of like that every morning wow the great blue hair over here sorry this has been a nature this has been a nature run yeah yeah I like every morning get up and put this thing on and you know last eight ten hours like you don't even know yet yeah it's um yeah it's it just you know we just get up and do it and you know make it try to make it happen with you know the day today and it's fine once I get going it's like you would run we've running class 45 minutes here yeah it's been you know a little bit discomfort but I'm out of running not as fast as you know that guy but you know it's hard to run as fast as anybody in Boulder yeah I'd like to work more with people who have disabilities or they're a couple organizations at the ranger motion project and that's we're talking about prosthetics earlier they they help people worldwide with worldwide but primarily in central and South America getting adaptive equipment yeah because other people who need it but I'd like to be more involved with them I've done a couple events with them I want to do more consistent support yeah the challenge athlete foundation as well they did the same stuff here in the very cool yeah that's probably a long-term goal to do it for a long time I love it gotta show you the view here for a second look at that this is our town bud snowy oh god it's so beautiful Dave just told me that he once rode from San Diego to Maine on a bicycle in 1991 how was that it was fantastic I I don't know why I did it guy grew up in Maine and you know it's like there's a bike can get there but I was involved in it I just I was in college I just wanted to take a semester off I wasn't sure like one of the study I was like why am I here so I'm gonna bike across the country so like we all do when you want to figure out life yeah I'd never gone on a bike tour my dad worked at LLB in those I went in and bought this new like Cannondale you know aluminum frame bike which is the cutting edge thing back then this is a touring bike and just found the panniers and they didn't know how to cook or anything like that so I'm not yet so I just found that stuff and flew out to found a one way ticket to San Diego from Maine flew out and then stayed for a few days and then just came I had road maps I had no idea I didn't go up by bike routes I just looked at a road map said oh I think I'll go this way so I went to kind of north north and east a little bit kind of cross Southern California but the first day out of San Diego I it was a snowstorm I mean this was marked I had no idea about mountain weather and it was your classic snowstorm in the west except it was you know it's at 3,000 feet coming out of San Diego geese in the way get packed here people invited you in for meals and let you camp in the backyard yeah I was like you know on a huge touring bike with panniers and like oh where you going what are you doing get place to stay and crashed in some strange people's homes everybody was super kind though overall I'm convinced bike touring brings out the best in you and then the world as you travel you see the best of humanity come out it's inspiring every time I've done it yeah yeah exactly how long did the whole trip take you oh like two two and a half months probably yeah and then you had life figured out when you were done yeah I couldn't help really I knew I knew I was gonna go back to school but I was just like I didn't know what I wanted to study so yeah that helped a lot though alright my man I think we did it we went far enough it's fun thank you so much I was really awesome yeah I hope you guys enjoyed this out there I will link to some of the media that he has the articles there's a new film about him that was made by Billy Yang that is awesome Matt Trappy Matt Trappy a bolder guy and thank you for watching please like and subscribe and stay tuned for another running with Ryan down the road thank you bud sure thank you


Three horses with a speed of light, a cloud of dust and a hearty hyacilver, the lone ranger. For this faithful Indian companion, Tonto, the lone ranger rode to the length and breadth of the early western United States. From the hills of Wyoming to the Rio Grande, from Kansas to California, he led the fight for law and order. Against outlaws and hostile Indians, against confidence men and road agents, his strength and courage never faltered. His life was dedicated to the winning of the west, and nowhere in the pages of history can one find a greater champion of justice. Return with us now to those thrilling days of yesteryear. From out of the past come the thundering hoofbeats of the great horse silver. The lone ranger rides again. We're heading for Porter's Gap. The sheriff needs help. Early one morning, the lone ranger and Tonto had rained up at the side of the trail on the outskirts of Porter's Gap. The sky was over-clouded, and a mist hung low over the plain. In the distance, a single horse could be heard galloping toward the town. The sheriff's coming, Tonto. Him ran to town from ranch. And now we're going to find out of the stories we've heard of true. Him on silver.  What you do? We'll just stop him for a moment and talk with him. You wear a mask? I know. Rain out, sheriff. Who is it? It's him all right. Tonto see badge. Rain out. Good morning, sheriff. You're strangers around these parts, aren't you? That's right. We're looking for work. Can you use any hands at your ranch? Know your business? And just give us a try. Well, I guess we can use a few months. The ranch is about two miles down the trail. Report to my foreman, and if he likes your looks, he'll put you to work. Thanks, sheriff. Hey, wait a minute. What's your name? Come on, sir.  Hold on there. What's the hurry? Come back here. Cut away from the trails, Tonto. Him follow us, maybe. I don't think so. We'll head for the clump of cottonwoods and make camp. We had the answer to our question. Him not see mask. And he was only a few feet away. We had seen it. He never offered me a job. Miss, plenty thick. Not that thick. I'm sure of it now, Tonto. Sheriff Bradley is losing his sight. You've got plans? Not yet. I need more information. As soon as we've made camp, you can help me with the disguise. Then I'm going into town. Come on, sir.  Late that afternoon, a tall, broad-shouldered stranger entered the Combination Cafe and General Store in Porter's Gap. He gave the man behind the counter a list of supplies, then sauntered across the room to the bar. The bartender hurried toward him. What can I do for you, stranger? I'm waiting for some supplies. Joe taking care of you yet? Yes, he's getting them together. By the way, isn't Jim Bradley your sheriff here? Sure is. You heard of him? Who hasn't? Great old guy. Bought with Sam Houston as San Jacinto. Jim's one of the best. Is he anywhere around? You'll find him at his office. He don't drop in here much anymore, just on Saturdays now and then. Joe to hear some of the stories he tells about the old days. There's a story going around about him now. What do you mean? He isn't as well as he used to be, is he? Jim's hailing hearty, just as strong as he ever was. Can he see as well? That's enough of that. I'm only repeating what I've heard. Well, that kind of talk isn't popular around Porter's Gap. Jim's our sheriff, and he's going to stay sheriff as long as he wants the job. You think a great deal of him, don't you? Every man in town feels the same way as I do. There isn't one of us he hasn't helped some time or other. But is it safe to have a man who can't see acting as your sheriff? Listen, mister, I don't know what business it is of yours. You're just a traveler drifting through. We got no real need for a sheriff in Porter's Gap. No bad engines, and Jim drove the outlaws out of the district years ago. He won't come back either, not as long as he's alive. But if they know that they're sheriff... Who's going to tell them? Am I the first traveler that's heard the story? Well... Haven't you been bothered by any drifters from the gold camps? Not yet, we haven't. We'll cross that bridge when we come to it. Who are those two men sitting over there in the corner? They aim to buy a spread and start raising cattle. I see. Anything else you want to know? Here's Joe with your grub, and I got work to do. How much is it? I told them... Here. Now, you... Now, there's one more question. I warned you already, mister, that you... I think just as much of Jim Bradley as you do. But even if all of you feel safe, isn't it dangerous for Jim himself? He rides in from his ranch every morning. He rides home every night. His horse knows the way. One accident would be enough. Yeah. I never thought about it like that before. Why should he want to stay on this sheriff when he knows that he isn't fit for the job?  Why doesn't he come home? Why doesn't who come home? Young Bob, Jim's son. A young man just hanging on so he can hand the job over to him. Figures that the sheriff reporters' gaps should always be of Bradley. And all of us figure the same way. Where is Bob? Well, we don't know. We laid out a couple of years ago to see the world, and none of us have heard from him since. Well, that explains everything. Except why the kid don't come home. He knows how the old man feels. Bob Bradley. Have you ever run across him? What does he look like? Well, a spitting image of the sheriff. Younger, of course. Good-looking and husky. No. I have never met anyone who called himself Bob Bradley.  I will. Adios. So long, stranger. Where did you leave Silver Tunner? In Ward, outside town. I'll find him. Let's take a look through that open window. See those two men sitting at that corner table? Hunter's him. I want you to keep an eye on them. Try to find out what their business is. It's less than an hour before sunset. As soon as it gets dark, we'll break camp and head east. And where we go? Our first stop is the jail at San Marino. As the lone ranger started down the main street, Hunter edged closer to the open window. One swift look at the man inside. And he turned and leaned against the building. Every word of their conversation reached him clearly. Fort is gaffed. Dead-eyed Bradley. Not so loud. When we get through with them, they'll all be in the same boat. We'll steal them blind.  Where do we start? Express office. I've changed my mind. Huh? Maybe we could pull a job on Express office and get away with it. Who's to stop us? But afterwards we have to clear out. Why? When something like that happens, there'll be some changes made. The town will realize that it needs more protection and Bradley can give it. Yeah, that's so. But what of it? We've moved on before. You aren't able to settle down on it. Why not? It don't sound like you, Ransom. I've been sizing up your face. What's wrong with my face? Nothing. It just did. Look at you. You think you was as square as you. Now breathe it in. I'd have a knife to partner in the back, huh? Somehow I don't think that's funny. Ah, now, Ransom. You and me are parts. We better be. Otherwise I might take a trip to San Marino. Uh, why don't you take a joke? Not that kind. Well, forget it. So I got an honest face. What about it? How would you like to be the next sheriff of Porter's Gap? Me? You. We could work out something pretty sweet. There's a Ringo kid, for instance. He'd pay plenty for a nice hideout with protection from the law. There's Trico Benson and Porniel Smith. Yeah, but how can I be sheriff? The town's so sold on Bradley, it'd have to use blast and powder to get him loose from the job. Not if something happens. I can't stick up the express office and then run for sheriff. I'm glad you figured that out. What's on your mind? It's one job. Maybe we get a couple of thousand. A couple of thousand. It's either that or a steady and come for a long, long time. Take your choice. That's easy. But how? We gotta make you a hero. Yeah. The express office is easier. We gotta wait. The sheriff lives on his ranch about two miles outside the town. Yeah? Just at sunset every night. He locks up his office and rides out there. The trail's straight. His horse knows a way. He just gives him his head and lets him ramble. Yeah, I know all that. There'll be a moon tonight. But there's plenty of cover on both sides of the trail, especially close to town. You, uh... And, uh...  I'll lean over here closer. What do you think of this? Lone Ranger's return to camp removes his disguise. He watched the sun disappear in the west. The sky turned to crimson and the great plain beyond the woods changed from green to purple. Then his keen ears caught the sound of approaching hoofs. In a moment later, Tonneau raced into camp. Tonneau, what's wrong? You... you come past. Here's a little bit. Then, Carl Ranton. Him, one other fellow, be sheriff. What's that? Them bad. You're sheriff Bradley in danger? Maybe so. Come to not hear all them say. Where are you taking me? Meet Sheriff on trail. Watch him. See him get home safe. When does he leave his office? Time to go down. Him leave now. Then we've got to hurry.  He's gone. You afraid the may try to kill him? I'm right. I'll sail away! As the sheriff rode slowly out of town, the red glow was fading from the west. But the moon, already high, silvered the sage and bathed the trail in light. Suddenly, the sheriff's horse jumped to one side and... Steady there, boy! You're no three-year-old! What are you jumping around like that for? Hey! Easy does it. The trail's rough enough without you cutting up shenanigans. Steady! Ow! Oh, him dead. Not yet. But we'll have to get him somewhere quickly. Are there any tracts beside the trail? Not right, for short, we hear. Maybe far away. Handicubber. Town's close, but I'm wearing a mask. You could take him in, Tutter. Men come from town. Yes, they must have heard the shot, too. That's from the buck in front. They find us here. We'll be accused of the shooting. Not right. We'll take him to his ranch. You want help? I can manage. Get his horse. Now, across the saddle. Tutter got hard. Yep. Come on!  Hold it a minute, men! Listen to me! What's a masked man in the engine carried him off? I've seen those two around here before. A masked man in a red skin just rode away. They shot the sheriff and took him prisoner. What are you going to do about it? We're following me? And come on, we're forming a posse. We'll bring him back dead or alive. Come on, follow me. The curtain falls on the first act of our Lone Ranger story. Before the next exciting scenes, please permit us to pause for just a few moments how to continue our story. Carrying the wounded sheriff, the Lone Ranger headed for his ranch. Tutter followed close behind. On the way, the lawman regained consciousness and... Why are you taking me? Whom? We're almost there. What happened? Someone shot you. We don't want to be seen by any of your men. So we're taking you to the ranch house. Mrs. Hannon. What? My foreman's wife. She's there cooking supper. That's all right. I heard you called your horse Silver. Yes. Are you the Lone Ranger? Don't try to talk. Am I done for? No. The bullet caught you in the shoulder. As soon as Tutter bandages it, you'll be all right. Can't talk. Rain up, Kimosabe. Lift him down, Tutter. You do it. Easy. That's it. I'll carry him. It's all right, Mrs. Hannon. Make me an engine. I'll get you. No. Close the door. You've been shot. Stay out, Lores. This is the Lone Ranger. We'll put you down here, Sheriff. We'll need some hot water and bandages, Mrs. Hannon. The Lone Ranger. Hurry, please. Oh, sure will. Sheriff, we have much time. The men from town are following us, and they believe we shot you. I don't know who you are. I may not believe you, and there's work to be done. A man named Buck is out to get your job. What's that? You may think you're fool people, but you haven't. Nearly everybody in this part of the country knows that you're... well, knows about the condition of your eyes. Yeah. Anything else you want? Tutter. This good. They never said anything to me. They were willing to let you keep the job as long as you wanted it. Oh! Oh! Oh, you'll be better soon. But now that you've ridden into an ambush, they can't let you carry on any longer for your own sake. You understand that, don't you? I suppose so. I was only hoping... I know what you were hoping, but we can't wait long. There's a friend of this man, Buck, who may have arranged to have shot you. What's his name? A ransom, but we have no proof. I've seen both of the men before around San Marino. That's where Tyler and I are heading now. San Marino? It's two days' ride. And Silver and Scott can make it in less time than that. You're coming back then? No. We'll need three days for the work we have to do. But Buck is leading the posse. That's out after us. And he'll try to get himself appointed sheriff in your place tonight. If he succeeds, if he's the man I think he is, he'll bring in his own deputies. And the town will have to fight to get rid of him. And it's done. We go now. It's up to you, Sheriff. Refuse to hand over your badge. Insist on an election. Do anything you can to give us three days. I'll do my best. The posse's getting close. I can hear a real plane. Now let's go, Tonto. Good luck. Hurry. I don't know what you're trying to do, miss me, but I sure hope you do. Silly Silver. Then come plenty fast. Hello, Silver, how are you? The own ranger and Tonto raced into the night. The posse's thundering after them. In less than half an hour, Silver and Scott had left the menoporters gap far behind. Then on across the planes, a masked man and his Indian companion rode all through the night. A little town of San Marino was bathed in sunlight, but no one was stirring when the masked man roused the sheriff from his bed and told him his story. Well, that's as much of a description as I can give you. Well, it's enough. You've been talking about Buck Winters and Ed Ransom. Bring them back here and I'll stick them in jail for 20 years. What's the charge? Robbery. That's all I need to know. There's a boy who called himself Chet Carlson. He was with them a lot about a year ago. Yeah, too much for his own good. I thought so at the time. This robbery Buck and Ransom wanted for, we sent the kid to jail for. He's in jail now? No, but he was under a month ago. A breed that had been afraid to talk before gave us some new evidence. Buck and Ransom had left here. Yeah. Is Carlson in town? No. Do you know where he's gone? Durango, he said. Durango. Goodbye, Sheriff. The kid's all right. I'm sure of it. Where you going now? Yes, to the east of Durango. It's a long way, but we've got to find that boy and get him back to Porter's Gap in three days. The cafe at Durango was crowded when young Chet Carlson entered. He forced a smile and took a step toward the long bar where cowboys and ranchers were lying too deep. But the smile faded from his lips and he turned his side to drop wearily into a chair. Slim Meredith had been watching him. He walked over to the boy and placed a hand on his shoulder. What's the matter, kid? No luck today? Nope. Nobody wants a jailbird for a hand. Ah, now that's no way to talk. We all know you were framed. Oh, sure. Well, if you can't find anything, it's just because there aren't any jobs. The Circle B took on two men today. It's too bad you didn't get there first. It was there yesterday. Ah, it's no good, Slim. Durango's too close to San Marino. Hmm. Ah, you're going to pull stakes? Yep. You got any ideas? I got one. I'm going to Frisco and try my luck as a sailor. A sailor? Yeah. Ship out to China someplace. Well, you're crazy. Why, there's plenty of other places to go where you can still ride a horsey. Reach for the ceiling, everybody. A masked man and a ninja. Hold up. Over here, Poulson. For me? I haven't any time to waste. Move. You better do what he says. What do you want with me? You're going to take a little trip with me, Carlson. Don't any of the rest of you try to follow us. Outside. What's the idea? I don't know you. Get on your horse. Oh, wait a minute. I've been in jail, but I've no crooks, eh? I'm glad to hear it. Get on your horse. Where are you taking me? Home, Bradley. Bradley. That's what I said. Your father needs you. Oh, no, you got me wrong, Mr. My name's Carlson. You're Bob Bradley, and your father's the sheriff of Porter's Gap. Oh, no, you're making a mistake. A local. My pa, a sheriff, will ask anybody in the cafe who I am. We waited here long enough. Start riding. Come on, Silver, you'll ride. Get up there. What's your wrong, I tell you? You're coming to Porter's Gap with us. There's an old man there who's waiting for his son. If he doesn't come soon, you'll never see him again. You mean? I meant what I said. If you aren't Bob Bradley, you're looking up like him, the fool, even his father. You're going to take Bob's place. Sheriff Bradley is going to see your son once more, before it's too late. Too late. We've got to hurry. Come with you, Masked Man. Lead the way. How's Silver away? The lone ranger, Tonto and the boy, raced across country. Night became day. San Marino was circled and left behind. It only stopped with a water and rest of the horses. As sunset, they reached the pass. Less than ten miles from Porter's Gap, there, Tonto left them. The Masked Man and the boy rode on toward the Sheriff's Ranch. At last, they could see the buildings. Why'd the engine leave us? He headed straight for town from the past. He had business there. And that's the ranch house up ahead. I know. I mean, yeah. It's three days almost to the minute. What's that? Nothing. Now, let's get this straight again. I'll talk with the Sheriff, but I don't have to see anyone else. That's up to you. And I'm not going to stay long. Rain up. We'll leave our horses here in the shadows. Is the Sheriff real sick? I mean... You'll see for yourself in a minute. Wait. That's Miss... There's a woman standing at the window. Come along. What's your word? As the Sheriff kept his... Yes, look it. Oh! You brought back Bob. Hello, ma'am. Oh, your paws are out here. Come in. Sheriff, it's Bob. The masked man brought Bob with him. Son. You tricked me. He and Dine at all. I never said he was. Dine? I should say not. They put a bullet through me, but I'm feeling fine. I'm not going to stay. Nothing's a matter with me, but my eyes. I can't see you, so good, son. But I can feel your face tonight. I said if you didn't come soon, he'd never see you again. So... So that's what you meant. What's the difference? Why do I have to see when I got a pair of young eyes to see for me? I can't be Sheriff anymore, son. But you will take my place, won't you? No, I... I can't. Why not? I can't stay here. I've got to keep moving. What for? This is your home. You've seen enough of the world by now, haven't you? Don't understand. What's that? Maybe the boys from the bulkhouse. And the men from town, Mrs.Hannon. I sent Tado after them. We want Bob! Hand him out! They're calling for you, son. They want you to take my place. I can't. I know what you're going to say, Bob, but this isn't the place to say it. You have nerve enough to step out in that porch and tell those men why you can't be there, Sheriff, will you? You think I ought to? It's the only fair thing to do. All right. Come on, Paul. Take my arm. What's he mean, masked man? Why can't he be? Hiya, Shorty. Hello, everybody. Now, now, just a second.  We want you for our sheriff, Bob. Now, now, wait, wait. I'm proud, but I... Well, I've got no right to be. I can't take the job. No, no, wait. You want a man like Paul for your sheriff. Somebody with a record that's as clean as a whistle.  What more could we ask? No, no, no. No, man, I'm not. You know, I've been traveling with some mighty bad company since I left here. What's more, I just got out of jail a month ago. Now, what do you think of that? Bob. Well, I never did nothing crooked, Paul. I was framed, but just the same. I'm a jailbird. You give me your word. You didn't do nothing crooked? Do nothing crooked. Well, sure, but I... That's enough for me. It's enough for us, too. Yes, sir. How about it, boys? He's learned his lesson. I say he'll be a better man because of it. Do we still want him? Yes, we do. There's your answer, Bob. Now, hold on. Have a look at this cub of your electing sheriff. It's Carlson, Paul. Hem of your badge. What? Oh, sure. Here you are. I'm taking over. The first thing I'm going to do is put you two under arrest. You'll double-cross and rat you into him. Right. Oh! That fellow over there in the cellar. He shot the gun right out of his hand. Stick him up, Ransom. I'm taking you and Buck back to town. You'll sleep in jail tonight. And tomorrow you'll start for San Marino. We'll take care of him for you, Bob. How do you like our sheriff, boys? Good work, son. Oh, they'd have got me if it hadn't been for the mass, man, Paul. Next time, you'll be wearing your gun's long lower. I'll show you. Oh, yeah. Yeah. Paul, where is the mass man at? I want to thank him. Don't you know who he is? Know who he is? Well, no. That was the Lone Ranger. Huh? And before you've been sheriff long, you will find that when his work's done, he never waits for thanks. Where you have just heard is a copyrighted feature of the Lone Ranger Incorporated.


Hi everyone, this is Sonali. Thank you all for carving out some time for attending today's webinar on the episode 20 of the Business X Learning series, Invest, Scale, Value and Exit. To all the attendees out there, please type in any questions you might have in the Q&A section and we'll try to answer as many as possible at the end of the session. I would now like to welcome our speaker, Mr. Gaurav Mara, Chairman and Founder of the Franchise India Group. A very warm welcome to you, sir. Thank you. Thank you, Sonali and thank you for joining in. This is a series which we're doing. This is the 20th edition as Sonali said and we talk about valuation, scale, exit and invest. And these are all four strong components with interlink and we every time take a topic and talk about it. Business X, as Sonali said, is a platform which gets a lot of startups come to us which are looking to raise capital. And this is a good sign because in the last five, seven years, particularly we have seen that mindset has changed. A lot of people are approaching a platform like Business X, there are multiple platforms and a lot of angel groups available where they would go and pitch to the investors and raise capital for their startup. And some are very structured, some are not so structured. So these are initiatives we do to really pass on knowledge especially to early stage companies and startups. And every time we take up a particular topic. So today's topic is all about how startups should be really valued and how difficult it is to value. And especially in the current times of this COVID going on, a lot of investors are shying away to bring in investments or the liquidity is becoming a tighter especially at the angel kind of early stage investors or seed investors. And this is a time where one has to do a lot of homework before we even really go and start raising capital. So in today's 30 minute odd discussion, we will talk about what are the startup challenges, stages and so on and so forth. Then we will also talk about the valuation factors, what are the kind of valuation factors you need to have. Then we talk about the different methods of valuation, how startups would be valued from the investors in different perspective. Then I'll talk about the five aspects which I strongly believe in when I have to look at a startup to invest. I don't go into many things. I just focus on the five principles which I have really chosen to really whenever I'm looking to invest or even to recommend anybody. We do a more recommendation to companies. And finally, we'll also talk about the overall approach of valuation, how you need to approach it, what kind of valuation expectation you need to set for yourself if you're leading a startup. And finally, we'll talk about the investor perspective, what is the investor looking at in the business. So as I said, I mean, the problem with startups is that there is normally startup would have a very little or a no revenue situation. So a lot of times it's actually no revenue. It's an ideation being done, some kind of a work being done, a foundation being laid, a business plan being done, but revenue is not there. Now, fundamental to valuations are is that there is all based on your revenues. It's essentially what your top line and bottom line. If you don't have that, it becomes even more trickier to value businesses. And that's where it all starts from. And this is how difficult it becomes to set a valuation for a business. And especially these days, it becomes even more riskier to look at any kind of valuation where there is no, so to say, historic data, which is available. I normally would recommend that you need to have a little bit of traction being built before you even start approaching the investors. Otherwise, it can be a lot of frustrating exercise to go in a very, very early stage to reach out to investors. And they cannot see a merit in the business model. Unless it really is a technology product or it is something which is very, very destructive and a very clear problem solving is demonstrated. And a lot of startups are approaching these days to us and where we 90% of them are not even eligible at that stage. And while I also tell you that there is a huge amount of promise available, if you have a little bit of a traction and a scale story, if traction and scale story together comes in, then there is enough and more money available outside, which can be serviced. But sometimes if you're not really done, no traction is there. There is no strong scale story is very clearly demonstrated. Neither you are demonstrating a very strong problem solving situation, then it becomes a very difficult structure. Another area which one has to really ask for, what is a much need capital for you? And what is a must need capital for you? There is a two different things. One is a, what is a minimum you need to really have this startup come out of the ground. That's something which one has to really demonstrate.  That's only starting point. At this stage, we are advising startups to really define that first, because that's very important. Rather than asking for a higher valuation case, let's understand what is a must need capital at this moment, what you need to do. Now, let's understand couple of stages, which are required to get to a point where somebody would value. What are the area factors which would influence a valuation of the company? As I said, the first to me is traction. A little bit traction is very, very important because it sets up some kind of a proof of customer demand. It shows that there is a little bit of a consumer sign. There is a certain amount of target group which you defined has already started adapting it. Even if the base which you're looking for a little more mature is 100,000 consumer, even if you can demonstrate a very sample size of 50 consumers using this, or some kind of a structure which is available, then I feel that that startup has a foundation being laid. Sometime pure ideation has a very little meaning left at this moment, unless and like I said, it's a very strong disruption. And so, traction is very important to me and this is my own perspective and that's what most of the investors would also look at. Second thing which comes to us is the reputation. How the reputation of the team which is presenting this idea is coming from. What is the, founders have a positive image in the market? What have they done in the past? What is the pedigree? It can be education, it can be experience, it can be maybe another startup, they were part of it. And what is the kind of capability? And if it clearly fits in with the domain, then it becomes even more enhanced. So, which means that you come from a particular domain. There is a startup I'm advising. This guy actually has been a person from healthcare itself and he's done work in healthcare. Now he's got another product from a healthcare space. Clear synergies, clear understanding, clear domain, clear reputation mapping, industry contacts, all that is fitting in. So, these are all connecting dots. If that was not connecting, then you need to bring in your team a little more wider and get people who can connect those dots. Because, unless eventually you have that, it shows, because you really understand that whenever a startup approaches an investor, investor has a foresight of 18 to 24 months to see this to get to a certain next stage of investment. Which means that is a huge scale up which is required between now to that level, maybe 10x, 15x kind of a scale up. If you are in the discovery mode, which means that you're discovering a new industry, you have no relationship, it becomes very difficult to do that. So, founder's reputation and linkages to me becomes a very important aspect of funding. A prototype is again very important. How you have done the prototype, it would obviously very, very important for the influence of the investor, how he would look at the business model. Pre-evaluation revenues, again, if you don't have that, then becomes a tricky. But if you have some pre-evaluation revenues in the system, it might be a very small number. We have seen businesses which were doing an absolute revenue of 10 lakhs, 15 lakhs, 20 lakhs, but there was some traction. Somebody put a dollar behind you, somebody liked your product, somebody bought this business. So, something which gives a clear communication, sample revenue structure, it always is a very, very good idea. And if you feel that that's a journey which you can do before you even hit any investor, please do that. Don't even try to jump into getting into a valuation situation, unless and until you have some kind of an endowment. Another area which has been problematic, which especially the ways spaces I come from, I have done a lot of work in the retail services and franchising space. And I've seen a lot of companies which have great product innovation, a lot of good ideas, but they lack distribution. Now, distribution is a critical point, because again, you might raise capital, but if your acquisition of the distribution structure is complex or you have no clear roadmap that how are you going to distribute that, then it becomes a very tricky situation. And a lot of businesses have actually collapsed where they have a great product innovation, but lack distribution. So, how are you going to demonstrate what is your distribution idea? How are you going to when your product is ready and it needs to go to a commercial and I think how fast you can bring in that distribution? What are the path for distribution? Sometimes it's a direct distribution path, sometimes it's a light distribution part, sometimes it is collaborative factor of what you need to collaborate that. So, a lot of that has to be very clearly understood, depending on what kind of in your product or a service, what kind of distribution would work. Then another thing which is very important is which industry you're doing. What is a larger industry? What is the micro industry available in that? How do you really do that? And that's where competitors would start coming in. What is happening in the industry? Who else was there in the industry? What international markets have reacted to this industry? There would be something. A good part with India is that we always would have a benchmark in a developed world. There would be a similar kind of developing world. So, there would be some benchmarks available in the world or some kind of a consumer indicators which would tell from that industry that something is going on. So, what is your industry telling you? And finally, is the key founding team. Maybe the founder is strong enough, but he does not able to get the right team in place. That's also very important. One of the startups we are advising is actually an IT product which they developed and they don't have in-house strong and I think they rather used another firm to develop the product. To me, it's a missing link. They don't have, they're a technology company but they don't have a really strong technology team member within a system. So, there has to be somebody who can really demonstrate locked in and how do you really show that consistency of that team? The founding team would stay in the system for some time to see this whole growth cycle and it's tough because you start up, you always bootstrap, you don't have that kind of levels of reimbursements which you can give. How do you get your founding team in the culture of it? It's very important that they come into the culture of the company and they understand where it is coming from. Now, let's get into the different types of valuations and what kind of types of valuations which would be there. First is very simple. When the early stage businesses go to investors, very, very early stage companies, they would use this as a cost to duplicate methodology. Now, cost to duplicate methodology by name itself sells that if you had to create the same thing again, what kind of time, energy, effort, money would be required to do that and that becomes a mindset of an investor to really invest into the business. It doesn't reflect the future potential, the problem with this is that it doesn't reflect the future potential of the business. It's just about cost of replacement. So, say, which means that I created a software, now investor would think that if I have to do the same exercise to create this piece, how much time, money, energy would take it and maybe a little bit goodwill over and above, that would be cost of duplicate model. But it's normally very low valuation because you're just taking what has been invested in that and a lot of times it's a low set investment, low set valuation because a lot of things would not be covered. There's a lot of intangible value which goes initially in the cycle of a startup. It might be a lot of IP, time, energy, effort, brand. While it is not mature, it's not one to the end, I think, but there is a lot of intangible values which are there, which are not captured in this. So, fundamentally, it would always become that if I have to replace this by putting that kind of money, how much time and I think this is normally done in businesses which are like retail and things of that nature. So, people would always value businesses in terms of cost to duplicate. So, that's how kind of a valuation would come in. This is not so much of a preferred valuation to me because it doesn't give you the right valuation. It's more you need to get off the ground and that's the way people would value. The second valuation method which is used quite a bit is what called market multiple. Market multiple is normally used where there is some kind of a comparative structure available. So, comparative market transactions which has happened in the same industry, sometimes Apple to Apple, sometimes Apple to Orange. Most of the times, it wouldn't be Apple to Orange because you would not have maybe comparative structures available in that startup. So, every startup would have some form of uniqueness. So, you will not maybe have absolute comparative. So, how do you really relate that, that would make sense and how close you can go on the comparatives and that's something which is in it. Say, furniture online, business urban ladder is there, then there are a couple of other pepper fries there. So, they would be comparative and when they would be valued at a certain stage when they were startups, they were very close to what the investor would look at it in a comparative structure. If somebody would got at a certain valuation, you will also get that. So, these are all about market multiples. One of the areas which is mostly used for a startup or any kind of valuation in anywhere in the world is DCF principle which is discounted cash flows, which means that you would put kind of a projection for next 4, 5, 6 years and discount that performance and build the value case on that. Now, this is a great way to do that because normally it will get you a very good valuation structures because you will project that and historically if you don't have data also you will just put the data. Now, a couple of things are very important. How this data is reflecting true numbers and how close these true numbers look like? Well, this would never be true because there is no historic data. So, there is nothing which has been pulled down but a lot of other factors which you can demonstrate that whatever numbers you are projecting would come closer to that and what are those factors and what sporting structures you would like to bring in to really form up that you are very close to predictability of that entire thing. Now, the flip side is most of the people would actually base your valuation on a certain performance on the third or fourth or fifth year whatever that number is and if you have overestimated this, there would be changes of disproportionate equity for investors. So, a lot of investors like to put the benchmark of a certain valuation 3 years from now and it can disproportionate, change the valuation structures for the founders. So, founders have to be very, very clear that this is not really about throwing a number which you don't cannot support. DCF is a good way of valuation but unrealistic cycles of projections would never make it a sensible for do that. Then, there is another factor which is used which is becoming more and more common now is called valuation by stages which means that how do you move from becoming amateur or more we start up to a little more commercially success which we call the rough to ready stage. How do you move from this to this level? How that model would work? So, we need to really put the investor would like to put some performance stages at a stage what stage, what needs to be done when you are a business idea or a business plan, what kind of valuation you will get when you have a scheme in place and you have the first cycle which started already then what is in that thing when your final product or prototype is absolutely ready or technology is ready and is commercially performing then it is nothing when you get to a next level of growth cycle which means that the benchmark of sales or some kind of alliances or some kind of a structure has come in that is in that thing and then you are passed to profitability which means that you are very close to now becoming profitable. So, all these are stages and then you are a profitable units it might be at a unit level or maybe at a so there is a different stages they would really define and these stages can be defined over say three years it can be designed over two years and as you demonstrate these stages the investors would continue to bring in money this is a good way of doing and building confidence but the business planning and forecasting all these are extremely important points here because you are end of the day riding on some promises which you have made and that's on the basis of that somebody has put a valuation on different stages and if you are not able to put this piece in the same manner so it needs a much more deeper thinking and maybe somebody who can really be mentoring you or advising you if you are a startup use that before you even approach these investors because this is good for an investor to buy in because they are also hedged and looking at it but it's also very important that you understand which path you are taking it. I have seen a lot of startups actually impress investors very well in the first part of the investment cycle and as they were businesses would not deliver as it was expected they would create a lot of disappointment so to say with investors. So, this is what I think the different ways of doing it just to summarize the valuation structures so cost to duplicate is one valuation structure which is used, market multiple is second one, discounted cash flow is third one, valuation by stage is a fourth one, that's how companies would see their investors, startups would see their valuations. Now let's get into what I would say my five chosen ones if I have to look at an opportunity and see that I would like to invest on that because there would be no correct so to say way of a valuation there would be still a little bit of art in what I always say in valuation is art and science of this art would always dominate in the in this early stage investments of the start more than the science but how can we go closer to be what I call the art can be more scientific that's the approach one can do that and there are five things which strongly come out for me at least one is a tracker record of the founder you know what kind of pedigree culture and commitment he comes from that's very very important and if he is a big founding team even better because then you know that there are different skills coming together and they're bringing strong pedigree they're bringing strong culture and they're strong bringing in commitment this to me is a funding point if this is missing nothing is going forward nothing is going forward to that second is market entry barrier and early development stages quality and stage so what are the entry barrier you are trying to create what what have you already done which would restrict that nobody else can come closer to you in your scale cycle so that's something which is extremely important ability to distribute as I mentioned earlier that even if you are able to get the funding and you're able to get yourself ready how fast it will take you to go to market and that's something sometime it takes it's not very well defined it's not very well defined and that creates a problem and then fourth point to me is scalability and sustainability today this has come together you know earlier we were all talking about scalability now sustainability is also very important because there can be market disruption there can be liquidity issues there can be market crunches and if you're not quickly able to sustain yourself it can be a lot of startups you will see will not be able to raise now because they were expecting to raise in 2020 and 2020 has been tied so we'll see a lot of startup shut now now this is because they had a scalable idea but sustainability was very far so how close you can bring these two things together is to be very very important at this moment if anybody says that I have a great scalable model but it's also can be sustained even if funding is delayed or for some time it can still survive by itself those are the businesses I would pick at this moment and finally adaptability to the markets and how quick you can go to multiple markets because world is your ground of many start distribution sometimes one market is not responding as well if I can take that to another market and keep that opportunity and capture that opportunity is very important so sometimes markets would not respond in the manner same manner maybe India is not doing so well or we have problems in this then we can take it to another market how is your business model adaptable to other markets and you can be within India multiple locations and so on so five things track record of a founder a market entry barriers early stage development ability to distribute scalability with sustainability and adaptability to the markets now let's get into what kind of expectation early stage companies would have in terms of their valuation most of the times they wanted the highest valuation and I am not big believer of that because I feel that sometime doing a very high valuation is not good because when you do high valuation and you go out in the market and you are not able to deliver numbers because you already had pitched it a very high and your next round becomes a down round which means that you're not able to get the same kind of expected valuation in the next round then it becomes even more tricky it would be always good to have a realistic valuation so that you are able to continue to show the promise and confidence of all the investor cycles and that companies to me do very well so largely there are people who would approach two different ways one is raise as much as you possibly can you would do as a high valuation but also sweat out the capital equally fast so which means that you are able to scale this business exponentially so that your next round also comes at a right valuation now this is very tricky a lot of times it's gone wrong because you just get into the high burn situation and business doesn't match with the same scalability so this has to be consciously second is be realistic and raise as you perform and you can reserve some cash don't really spend the money and continue to show different benchmarks I remember one time there was a company I was advising called via.com it was early stage and they raised some about a million dollar and when I started working with them we chose franchising as a way to do that because they felt that and when they started franchising they didn't actually use the money which they raised initially and the company strongly went into creating a very strong distribution it was a travel product very very successful company now so this was a good strategy because they they they reserve every single money dollar which was there they didn't indulge they kept themselves they use strategies which can without putting their capital which is franchising is one of the strategies to create their distribution once the distribution was well established they didn't actually need so much of cash to be done and so the valuation really came up in the in a very gradual and a very strong perspective sometimes you really have to think through where you are and and how you want to really approach that now I'll come down to the final part of my presentation and then if you have any questions I'll be happy to take that so what is the investor looking at investor always looks at the exit and the risk that's the fundamental piece of starting any approach to the entire thing so while it looks like that everybody looks at a higher you know performance of the asset you invest on but the first starting point is to really look at how do I exit out of this business and what is the risk it carries second the investor also looks at a firm timelines what kind of timelines we will look at for the business to perform and to reach to a certain benchmark and whatever that benchmark logically would mean that there would be a some kind of a serious valuation hit that point because it's a it's a high risk investments and third he also looks at who can be the strategic or of future investor which would come and do this entire thing what is a who's another person available out there who is would be ready when the startup reached to a certain level who's the next person or next group to invest who are investing into the category and things that are there their inclination also helps you to really look at that startup so whenever you're designing your pitch you need to really keep these three aspects of in your mind to really look after the investor so this is a little bit on early stage startups when they look at raising capital what should they should keep in mind we talked about valuation factors we talked about different methods of valuation we talked about the five areas which I would really focus on and also talked about the approach of different valuation which you're looking at so Sonali any any questions you have if you want to take a few questions then we're more than happy to take sure sir so firstly thank you so much for another wonderful session Gaurav sir we have quite a few questions with us and the first one that I would like to take up is what if the current valuation of a startup is low but it has highly great potential of scaling up do investors consider such startups as an exception case where they are willing to invest more than the valuation suggests no investors would not like to do that I mean if there is a startup which is currently the valuation is coming low logically if there is a potential to scale and there's a big promise in that then the argument says why the valuation is low so it's a conflicting statement right so if valuation is low it might be that the stage where you are approaching the valuation you're not completely ready it's not going to commercial success or something that I think and that's not bad that's not bad use that rather go under low valuation at this stage and reach to a point where you can demonstrate the next level of structure and you can improve your valuation for the next round and that next round can be much better valuation state so that's not a problem I think and same investors might like to use that maybe use that same strategy which I gave you which is the valuation by stages create those kind of thing rather than just opening up completely break that into the stage take that plunge of showing some performance and get the investors be committal to over three or four rounds with you on that stage early stage investors like it because you are you are moving at a certain stage and that might be a good strategy for you to use it. Right so the next question we have from Mr. Devadath Das he says how can we project cash flows if the business is not operated enough to project them? Yes so every business even at ideation stage has a certain mode of projection in place you know so you would have what is the future what is the size of business what kind of revenue cycles you can get that that has to be there you know no business would go to from a drawing sheet it needs to have a certain mode of business plan and how realistic that business plan is how compelling it is what and strong problem solving you're doing that should be demonstrated we have seen people investing at a very very early stage of and I think and and that's something which would work so people would invest into that but if again I would repeat if you can get some early traction in your startup that makes it extremely compelling I've seen the best interest especially with credible investors coming when you have a little bit of traction already been demonstrated. Right the next question is from Mr. Alok Garg he says in what time typical early stage investors want to take an exit and what typical returns are they looking at? So this is a good question again very hypothetical as I said there are a lot of there's no definite answers in this one has to do that they would look at early stage investors come with a mindset largely I mean while they can have a much higher mindset but 10x to 15x kind of a mindset is that everybody's mind but do everybody get it answer is no but that's what you do because if you're a serial investor you have invested into many assets and few assets don't perform to the level and some really perform so really if a good investor would hedge himself in terms of his couple of investments and the time frame is normally a mature investor would look at ideally should take three-year horizon that's something which I would personally like to do but while the expectations set are very different these days people are looking for doing the next round or the next stage funding and things of that nature in 18 months two years and things that are different stages and this also depends on the business we're talking about you know if the business is technology scalability the is much higher much faster some businesses have very strong sometimes the opportunity window itself tells you that you need to go very very fast on that and your capital raise requirement is also equally fast like what happened in e-commerce companies and some other businesses like EV is becoming this the whole electric vehicle space is very hot at this moment and you know almost hundreds of companies and hundreds of startups are coming in this space so lot is going on in in couple of categories so couple of categories really are much faster cycles and some categories are little slow cycles but so it depends on where you are and this so we have another two questions that we actually received from Mr. Nagarajan before the session itself the first question is why the investor community is not in sync with the characteristics of new age businesses such as ghost kitchens which need very small percentage of initial capital when compared to the conventional food businesses however similar or better bottom line when compared with them hence the volume of investment expectations are not in sync you know so I do want to be while one of the few sectors which we found even in fancy stage where the real numbers and real answers are not been delivered have secured funding is dark kitchens and these businesses but the news is also little not so great in the market because when I look at businesses like Swiggy and Zemado who invested into their own dark kitchens and they were the ones who have other people outside have to ride on them and they failed it worries me at this stage so I would say that at dark kitchen level while the business model on the sheet looks very attractive but because a lot has happened in a very short period and very few success stories and a wrong very large I think so at this day this sector is a little bit of a tricky one so and that's what my viewpoint on that particular sector is because somehow it doesn't get to your logic why dark kitchens which was promoted by the platforms which everybody has to depend on were not able to succeed right and if Zemado cannot succeed their own dark kitchens or Swiggy cannot do nothing there must be something inherently wrong so there is also there is a system you know there are brands which are trying to operate mono kitchens and they focused on that there are companies which are running infrastructure business of dark kitchens they get multiple brands to come in and then and there are strong operators so there are different levels of structures some success stories are there we all know some success stories of companies which are doing extremely well and a lot of young companies also doing well so I would I would put this sector into a little bit more watch but there is there is a lot of money coming in on similar lines we have another question which says why the investor community seems to be not in sync with the characteristics of business ideas that are complimented by covid and not challenged by it so I think Nagarajan is also writing about ghost kitchens you know ghost kitchens okay that also I think Nagarajan is I think is is is we call ghost kitchens or host kitchens in and again there are multiple you know market feedbacks you know and still we are lot of people are not able to if I go to definite while we can have a separate chat on that because this is getting into more one industry I still don't understand the maths here if I have to be candid on that because I feel that you know the cost of acquisition to you know to the overall micro maths is not making at this stage sense and and the cost of acquisition is really not coming down it's rather going up so that's something which to me is is becoming a little bit of challenge but ideation wise I can I I like that from a perspective it is no doubt that if you if you if you look at that model of kpex light and structure and should make sense but it's currently becoming a little more challenging a lot of work is going on and I'm also involved in few of them so we will be happy to chat Nagarajan lastly sir we have a lot of questions from people who want to know if we also provide valuation services and how we can help these startups value themselves so anything you would like to add to that yeah so we we have a separate team which is under equity India and business x which does all valuation we also have a India world's largest platform for business valuation called biz equity you all can go on a platform called biz equity dot com is it's a platform which is you know very unique where you can build valuation and we have consultants also help you to do the realistic valuation for your startup thank you so much Gaurav sir for very patiently answering all the questions and for a wonderful session once again anything you would like to add in the end no anything as I said I mean there is a India is a very strong startup story and would always be good startup story I feel that we need to really look at this is my own desire now coming in we we are trying to be in the rush of startups trying to just follow rather than mean innovative I think the next cycle of startups should come from genuine innovations and innovations which are ready for markets like India and I feel that there is so much of problems we can solve in in our environments you know which are very very important urbanization is is a big issue and a lot of health is not becoming pollution is another issue so we have a lot of problems around us we have problems and more problems around us if if young people or in people can start thinking about solving those problems with the very strong innovations I think billions of dollars would follow billions of dollars the problem is that we we just follow the west and too much on on focus on searching what somebody else is doing and I think we need to now in startup also generally think about you know while scalability can go we can take a startup from India to any part of the world but desire would be to really think through startups which which come and solve some solid problems which we need like somebody in IIT I think with Delhi government has innovated some machine which they're giving now to farmers that they cannot they don't have to burn the crop which creates pollution in Delhi and this can be used as a as a saver on that to me these are innovations and these innovations are really good and our incubators are our structures in IITs and other places are brilliant and one has to really look at our thinking process in that manner and and that's where the next generation of innovative startups would come absolutely sir so with this we'll just wrap up the session thank you so much once again Gaurav sir for your time and your valuable insights thank you to all our attendees we really hope you were able to add some value to your lives through this session and if anybody wants to reach out to Gaurav sir sir if you can just input your email ID as well yeah I'm writing my email ID thank you so much sir and if anybody has any other questions if you want the recordings of our previous sessions please feel free to reach out to me as well I'll be happy to help you with anything that you need to discuss and we'll see you next time next Saturday at 3 p.m with another session in the series the next session would be about all about exiting a business thank you so much thank you very much thank you


Everybody Matt here for late in sports cards ripping three boxes for Hudson P We have one box of 2022-23 Panini prism basketball fast break one box of 2022-23 Panini downers optic basketball fast break and one box of 2022-23 top shape of club competitions Merlin chrome soccer again. These are for Hudson P. Good luck What's up mark doing great? How are you? Start off with Merlin Vision That's a raise What's up mark Arnav Calamondo rookie Usama, Elazuzzi rookie and 350 Jan Sancho Yadon Yadon or Jadon Or Jadon. There's Neymar junior refractor This is green refractor to 99 Takumi Minamino Spoken with precision And accuracy So I'm a T.S. Suley Muhammad Abu Fani rookie and Lucas Uchich under 21 Oh my Kevin's gonna have a hundred percent. You already know come on Making history out here Johan Bacchioco rookie Artigula rookie. This is to 299 red shimmer CEO zero and Mobile not the best name for a pro athlete and mobile Fabio Carvalho Might be emo be there. Yeah, Luca Modric I Marcus Edwards Enzo Fernandez rookie and Sadio money as long as the ball gets to Considerably good range. We should be good. I don't know to my sofa mega killing him Boppe And look at Yovitch. This is gold atomic to 50. Yeah, I was just gonna say I don't know if the ball didn't get to him As good as it was the past few years if Baker's gonna win MVP They're gonna lose the Bengals in the Super Bowl Pablo Torre. You're lucky Concey concey chat. We won't even sniff the playoff zero immobile a But see see yeah, I was kind of right. Jake was on it.  We all have to say it together There's Joe Felix refractor part of his part of your You got to learn how to say the games Dominic Sobo Sally cabore alvarez and Gabriel bati boss. Hold on Bati Studa, Agilis alchemy Pablo barrios and christopher new new new All right, and cun cun cun cun cun cun cun cun Felix and luka modrich 350 So So mostly is that That's what he's saying Yeah, but which one which player was it? Carboni Paul Wanner Oh the ssz the double sz's Sobo sleep Is that bonafase? Amelia bonafase So I made by no giddens rookie and frankie d. Um I hope so mark. I will really want him to have a really great year. I like him a lot apacarrs cyda or sia cyah uh Lorenzo Pellegrini and Wave auto to 150. Dio upamakano That was to 150 I don't know which one he's talking about nusa Alvarez rookie and new numbendas Sobo slide Oh the sd. All right optic fast break I'll close that with prism fast break. You got it. You got the dios Which one this one the auto Nice now go Progress progress Let's go. Come on. We should create like a virtual you get a golden star I was going to say a virtual board that forest has control of before he can like gold star throughout the day So jaylen williams kennedy chandler various garland nicole jovic rated rookie gary patin silver and disco grant williams Are you a bucks fan mark? Kenneth lofton rated rookie and blue bruce brown in my head. I saw that it's been a walkie box I was like, what did he say? After nap time and finger painting. Oh, that sounds amazing 49 I'm in for nap time. I'm out on finger painting. We get goldfish as well. Lebron and luke I want goldfish, especially the color ones The purple ones taste the best. I don't I don't trust Artificially covered colored chips or no, they're all artificial. I don't know what I'm talking about. Red actually red Harden star gazing and dany green ej. Liddell rated rookie And red disco ebb and mobley That's the 75 the jabari smith jr. Rookie's insert Tom brady fan Gotcha. I'll pass on finger painting because then we have to wear gloves christian colloco rated rookie tyrese martin rated rookie and tailin horton tuckered disco Yeah, they are which food I taste the best green rice and gallons and marvin bagley Blue disco that is to 49 the rosin. I'm gonna go with green Yeah, green always tastes tastes the best some blue foods are good There is no blue drink out there. That's good Kendall brown rated rookie and this is wow one of 10 fast break rookie auto gold Jalen durran nice one hudson very nice Let's go man Dang awesome hit for you hudson p. Let's go Todd I said hudson p then I just about called him dug in dug mcdermot To disco Josh minot rated rookie jake laravia rated rookie disco feeling green This is as well. There you go. That's pc car for it That is if you like to earn malachi random rated rookie Kendrick nun red disco It's a 75 d anthony melton disco disco d anthony I should see how many times I can hit my severely bruised knee Kobe white disco anthony davis silver Oh, there's not a card back there jabari walker rookie isaam obli purple disco rookie isaam obli 75 kevin durran wide screen christian brown rookie and tmack tarence man david robinson Disco and johnny davis rookie variation step in the cell and christian colloco as we have Short queue just two boxes in queue after this and burtans pink disco scotty barns That is to 50 ray allen silver He got him kevin porter jr. Jabari smith jr. Rookie disco Lebron fireworks Nicola jovich bontrez harrell It's a kade cunningham blue disco 150 kevin durran prismatic walker kessler rookie Dennis rodman and palo banchero rookie Let's see if we can top that gold rookie auto Jimmy butler monti morris disco step fireworks kevith lofton jr. It's blue disco shekelo neal Left right sinnering is not the best on that one Still a shack 150 and fast break rookie auto david roddy rowdy david roddy jaren jackson lake westley and brice mcgallans rowdy roddy david kawai where's jake pulsing cowie cowie and daniel iller prismatic halajuan and aj griffin rookie This is red disco dirk novitsky And chet holngren luck of the lottery magic and dyson daniels That'll do it for your break hudson appreciate it We'll get these right out to you congrats to get on that gold rookie auto