I like scrappy, hungry founders. A conversation with Shaler Houser.

0:00 Hello, Welcome everybody to another episode of Arthur's Round Table. Super happy to have Shay with us today. A Full disclosure, Shay has agreed to tell a story with us and we'll also be hearing from him in the new year about his business on the Family Office Insights, the webinar series. So you have that to look forward to as well. Really happy to have you and thanks for doing this on what some would argue is a holiday. Thanks for fitting us in. We we chatted a little bit before we hit the record button. And I'm so happy to hear that you as I have really enjoyed some family time and, and I don't know if it's downtime because there's a lot of activity, but it was certainly and for awarding.

0:44 So I'm glad to hear that you had the same type of experience. Yeah, absolutely. I mean, it is supposed to be downtime and I'm, you know, I definitely try to take some time off and at least disconnect to some degree, but of course keep up with emails like everybody else does. But yeah, had a, had a great time with the family over the holiday season. And yeah, I mean, it's 4:00 on New Year's Eve, so it's still a work day for sure. I mean, we're ready to roll. I'm I'm ready to go. Yeah, yeah, me too, always. So let's do this if it's OK with you. Let's start with the your journey, but first give people a little context, really briefly what you're doing now and then let's talk about how you got there. Sure, absolutely.

1:28 You know, I guess the best way to characterize myself at the moment is I'm an, I'm an emerging venture capital manager. So I've, I've run Founderville fund one over the last three years. It's a, it's a micro fund, a six and a half million dollar precede and seed fund where we had a hyperlocal focus primarily focused in, in Upstate South Carolina and with a, a sense of funding, you know, precede and seed software and in vertical AI type companies. I've been doing that for, like I said, three years and I've had a great time with it. And I'm, I'm just kicking off fun too. And it will also be a small fund, Arthur.

2:09 It'll be a, you know, called a 15, maybe $20 million fund. I want to keep it small intentionally. You know, I love what I do. I love working with founders. And this is sort of my passion. I'm not trying to go raise institutional money and go build something huge. That's just in my career. That's not where I'm at and just want to go, you know, do the work and and put in the reps and help create a lot of value and help founders build their companies. But it's like anybody, it's been a long journey. There was there was a lot to it. So happy to get into the back story if you like. Yeah, let's get this. So just appreciate that so people have an understanding of what you're up to and then we can talk. Let's let's go ahead and go as far back as you like and tell us Sir.

2:56 So I'm, I'm, you know, live in the South. I'm, I'm here in Greenville, SC. I was born in New Orleans and really have been in, in the South most of my life. I fortunately was able to grow up as a kid in Chicago. So back in, in the late 70s, early 80s, Walter Payton was playing for the Bears. And I was super fired up. Got to, you know, become a Bears fan at an early age. But my dad got transferred to Greenville, SC. He was in the building materials business and we, we moved to Greenville, SC. So I've been here for, for 40 years and, and you know, love it here. I I tell you, after I got out of high school, I went to military college. I went to the Citadel, the Military College of South Carolina.

3:40 Serious business, yeah. It was, it was, you know, it was kind of my parents said, look, you can go anywhere you want as long as it's the Citadel. So figured out real figured if they were like pay I was going to go. You can't handle the truth. You're going here. Forget it, right? Yeah, that was basically it. That was like, you can go anywhere you want. We're paying for Citadel. So I went there, you know, and, and had a blast, man, I really loved it. And I, you know, I'm, I found that I like the military life and the discipline and just everything about the military and being in ROTC and, and going through that process was such a blessing. And I learned a lot and not take a lot of those lessons learned with me, with me today.

4:21 But I tell you, I got out of, of the Citadel and moved back to Greenville was super fortunate, man. I went to work for this telecommunications company. This is this is in the early 90s and it was an employee owned company. I was a tenth employee. My best friend started the same day as I. He also went to Citadel. So we're the 10th and the 11th employees and this is back in the long distance. When the Baby Bells broke up, right that's. Exactly right. That's exactly right. So this is a long distance telecommunications company. This is back when we were selling long distance phone service for $0.20 a minute, back when long distance was actually a business. But back then it was a, it was a, it was a $75 billion a year business.

5:03 AT&T, yeah, AT&T had a $75 billion a year long distance telecommunications business. Of course, MCI and Sprint, those companies were, were emerging and, and building multibillion dollar businesses. I went into sales and I was a complete, you know, then com poop. I had no idea what I was doing and it was just kind of learn in the, it was great because what I learned was essentially how to sell recurring revenue based businesses through a channel to the small to medium enterprise. Like I, I learned that that's what that business did and did that for, for five years within that company. And about the fourth year had an opportunity to move into the M and a group.

5:48 That company started doing some some roll ups and went to work for the guy that was running corporate development. And again, I was completely clueless and just basically doing what he said and I was trying to be a sponge just to learn the the M and a business. And that company grew wildly and they started in 1989. I joined in 91. They sold in 1995 for 160 million dot which at that .95 that was a lot of money. That was a big deal, you know, in a in a short period of time. And as I said, it was employee owned and this is back in the day. You'll get a kick out of this. This is the back in the day when you can go to the bank and borrow like 25,000 on your on your signature. On your signature. Yeah, absolutely. So I went and I did two things after I graduated from college. One, I bought a car, which I greatly regret. And in second I I got a loan to buy some stock from an employee at the company that needed to put their kid through college. I needed some liquidity.

6:44 Oh, that's a familiar story. Needed the liquid. They need the liquidity. I can understand that. And so I was able to buy some stock and I got stock options and everything. And Long story short, the company sold 95 and I got this, this windfall at 25 years old. It wasn't a lot of money. Don't don't get me wrong, it wasn't like I was, I was a millionaire at 25 or anything. It was just, but it was a lot of money for me. And I remember thinking, well, that was easy, like we should do this. Yeah, right. Yeah, we we should do this again. So I end up approaching the three founders and suggested that we saw a venture capital fund focused on telecommunication services and in we did that we raised a a nine and a half million dollar fund.

7:31 They were the majority of the money. And then we invested in telecommunication services across the country and did that from sort of 959697 time frame. And that was at the very beginningofthe.com boom. And we saw our timing was, was was good. We were lucky in that we got into some companies that were sort of going along with the the the.com in about two years, in 2 1/2 years in, we're investing the last bit of the capital. And I went to my partner and I said, you know what, I really don't think venture capitals for me like I, I, this has been fun, but I want to start my own company like I want to start a real operating company and ultimately did that and started up a high speed broadband company 1997 called New Box Communications. And we are timing was was good.

8:24 We we were lucky in that Internet was beginning. We're deploying capital across the Southeast region and providing high speed Internet and this is back. We were. We were. Providing 1 Meg of Internet to businesses for $1500 a month. That was, that was it was. It was crazy. I have but you can get. I have just so people understand. I mean you can get tell me better. I could be wrong but I have two gig of fiber to my door. 90 bucks a month in wilderness. It's absolutely nuts. The compression on that market was was stunning. And that actually precipitated what we had to go through as we built this company out over the late 90s. And we built this company and it was, it was, you know, what I view as a a successful company.

9:17 We're hiring a lot of people, creating a lot of value, raise a lot of money, spend a lot of time in New York in the in the late 90s and raised literally hundreds of millions of dollars both in in debt and, and private equity or venture capital at the time and found myself in filing for an IPO. And I was 30 years old and couldn't believe that people were giving me that much money. What are you, what are y'all doing? Because I don't really understand what I'm doing other than I'm trying to build this, this business. But I did have a sense for for again selling recurring revenue based services in the small to medium enterprise and we were doing a pretty good job and we filed for an IPO Arthur on April 14th, 2000, which is the third biggest one day drop in the history of the NASDAQ.

10:05 So that was the day we filed and the the market was blowing up at that point. It was just, it was, I should say imploding and we were, yeah, we were at that time we were burning about four million a month and probably had about six months worth of capital left. So the IPO was not going to happen. DLJ was the lead at the time and they came back to us that summer and they were like, like there's there's no way man. You're like you got to find another alternative. And we ended up merging the company with a, with a peer company that was building in the Midwest in this company had just raised 200 million in equity from Goldman Sachs. So they had they had tons of capital and we, we had a much larger business.

10:51 We're up to, I don't know, 300 and 5400 people at the time, 40 or 50 million in revenues. So we, so on paper it was great. Yeah, it was a real business. I mean, we're just burning a lot of money to build out in, in a lot of capital expenditures and you know, buying gear, you know, Cisco gear, Nortel networks and caught up in all of the middle of that stuff. As I said, we end up merging with this company and I'll never forget we, there was a board meeting in, in the summer of 2001. So we had merged in late 2000 and in the, in the board meeting in the summer 2001, the board, and that was, this was Goldman Sachs Chase before it was JP Morgan more capital, which I think was the third largest hedge fund in the world at the time.

11:39 And, and I could go through the lid there, you know, is a litany of sort of the who's who of, of, of, you know, sort of private equity and, and you know, the names that you would know at any rate, they said, look, keep building, keep building out, keep growing, keep doing what you, we got all the money you need, just keep going. So you know at that point. I was 31. Typical venture deal. I was 31, I was married, I had three kids. And I'm thinking, all right, we didn't get public, but this is fine. They've got plenty of capital. Let's just keep growing this thing. So we kept growing. We did exactly what they said and we kept going. And then sometime in 2002, we needed to raise some more capital and we had a board meeting. And I'll never forget the chairman said, so we're going to, we're going to essentially pass the hat for 50 million. But to do the 50 million, you know as we discussed, we're going to recapitalize the company. You learned.

12:32 You learned a new term crush down round. I learned it in a, in a fierce way and I he said, we're going to do you know, the and it was crazy. They went around the room, the guy from Goldman's in for 10 and chases in for five and Moore's in for everybody, you know, and I'm like, this is great, no problem. And then he mentioned the recapitalization and he said to do that, we're going to facilitate A1 for 100 reverse stock split. And at that point he, I almost fainted. Like I remember sitting there thinking, this can't happen. And I, I broke out with a sweat. I thought I was going to throw up. And I, I said, wait a minute, wait a minute, hang on, hang on.

13:13 This guy's, the company's doing fine. And they said, Shay, look at the market, look at the competitive local exchange market in the high speed broadband market and where world common is and all these other things going on. The company is essentially bankrupt. And I was like, I, I, I can't, I simply can't believe this. So in that moment, of course, it, we had built over the years, but in that moment, I found myself, you know, 31 and, and, and married with three kids and essentially bankrupt. I, I did not know what I'd, I'd taken everything I made off the venture fund, everything I've made off the previous, I rolled everything. There was no whole back of 10%.

13:56 I went all in. So I had all my money in this company and it was my identity. It was who I was, was, you know, ego was wrapped up in it. And I found myself just just essentially broke, broken emotionally, mentally and and certainly financially. And it was, yeah, it was, it was a devastating time. And of course I got mad and resigned. Yeah, right. So I was going to teach him a lesson. Yeah, I teach them a lesson, right. So if you, if you don't mind a couple things did at that point before the split and that board meeting, how much of the company did you owe? When we filed for the IPO, my family, so myself, my brother who was there at the company, we were, we were, if we would have gone public at the at the price, talk price, we were sitting on around 100 million.

14:53 And but you didn't have control of the company because of the share, Yeah. No, no, at that point we had. Raised so much power. Yeah. Yeah. When you walked into that board meeting, it didn't matter what your vote. No, I no. Oh, no, no, no, no. And you know, and I learned, I learned over time as I spoke up and got more vocal, it was simply easier for them to eliminate me. Yeah, Yeah. And then and then bring somebody new in and load that person up with stock options. And they were. And they were thrilled. And it was so it was just sort of like weed out the, the, the characters that we're going to cause problems. And I certainly qualified as one of those because I was so upset and felt just betrayed and everything else. So it was easier for them just to, to weed me out, which they slowly started to do.

15:41 And I finally, you know, and I finally resigned and, and I had nothing to fall back on at that point. I was like, I just can't be a part of this anymore. It would, you know it. It's crazy, Arthur, because ultimately my Co founders and I, many of us barely got through that. Three of my Co founders, including my best friend, killed themselves up through that process. Yeah, yeah, absolutely. She yeah, yeah. One of the other C level execs wound up in in jail. It was an absolute complete unraveling and it was just, I barely hung on, man. Like I barely hung on. And I think the only thing that kept it together was I kept, I maintained a good relationship with the senior management team of the company, not necessarily with the board. The board couldn't care less about me, probably didn't know my name other than being at a board meeting. But I knew that we as a company had a non core asset down on the Gulf Coast of subsidiary company that we had acquired that the company didn't want.

16:47 And I after I resigned about six months later, I had nothing going on and I went back to the company and to the CFO and I said, would you guys consider selling this this asset? And he's like, yeah, I mean, at that point they were they were, you know, getting down the company getting yeah, right. So I was able to buy that asset, another telecommunications like a subsidiary inside of the firm. Understand this was, this was late 2002, early 2003. I had no money. I mean I had, I had no money and I needed about 500,000 equity to go buy the asset and I have lined up a credit facility from a from a regional bank to, to buy the asset.

17:30 So we ended up buying that asset. I had to go Panhandle around Greenville and collected I guess it was 400,000 now that I think about it in equity to to get that thing bought it was a fixer upper and got that closed in 2003 and and fix it up. It was when I bought it there was about 120 employees. It was about 6 million in revenue. I sold it five years later at 15,000,000 in revenue and about 75 employees sold it to a public health company and sold it on April 4th, 2008. So Bear Stearns was imploding Lehman Brothers, he was, and my credit facility was expiring on May 30.

18:12 So I was, I was like this, this can't possibly happen to me again. Like there's no way the, the, the gods are aligned for me to like lose it. And fortunately got it closed and, and it put me back on my feet and I was like, you know what I've got, I'm resilient and I'm definitely determined. And I'm, I've, I've gotten through this and I'm in a, I'm in a better spot. And that was man, I tell you it was I had a it was a sigh of relief, but also one of realization that it can go. It can go so fast. Real go the other way really quickly for a whole bunch of things that you don't see coming which. Completely out of control.

18:54 Yeah, out of your control, which I'm wondering what the sentiment was at the time for maybe it was different for each one of your partners and you often time. Yeah, I've. I've been New York. I'm a New Yorker, like been there for 25 years, right. And so I know a lot of the characters. And I also know there's people that will write something on a napkin and stick to it. And there's guys that are going to do whatever they can to crush it down and take the spoils and run, right? I mean, there's, there's people in between, but there's really two parts of the continuum, right? Did your you and your partners think that you were getting fleeced at the beginning and that the New York finance community was going to smoke you?

19:40 And even though they were telling you, don't worry, there's plenty of money? Was it in your review? You know, maybe it was pure naivety and, and still clinging to the hopes that 1999 and 2000 were coming back. I don't think I could fully process that that was such a monumental crash and sea change that it wasn't coming back. And so I didn't, I didn't think that I really felt like this board in the investment community that was behind us was really behind us. And here's the thing, Arthur, that company we sold that. That company sold for $625 million. And, and I, you know, in the last venture capital in, they did fine, like they made plenty of money. But you know, I walked away with, with nothing. And I was, I was, I wrote the business plan. I was the founder CEO, you know, deposited the 1st 250 grand and hired the employees.

20:39 And I got, you know, I got nothing other than a headache. But I'm, you know. Well, pretty valuable lessoning, right? Certainly a lesson for sure. And you know, it's, it's, I get to carry forward very painful, no doubt, but you know, I, I did, I, I think that helped me with the second company when I got a fair offer, instead of hiring an investment bank, I had, I started negotiating with that company and ultimately sold and probably left money on the table. Like probably left money on the table. But you know what, at that point I was like, I have to create liquidity. I've got to get my investors their money back and make sure they make a, a good return, which they all did.

21:22 And then I've got to get settled in, in ultimately that I accomplished that. So it's like, look that that goal was accomplished. I ended up, that was a 5000 employee publicly held company and I made it about a year, You know, I had an employment contract. I'm not cut out for a 5000 person company. It's just not, it's not my nature. I, I I. Meetings and shit, right? Meetings and operational details, which is not my strength, but I, I stayed in touch with people from the previous company and I had a great relationship with them, as I mentioned before. And I, I started approaching them and I said, look, we need to do something again. Like we, we got a great track record, like let's go do it again, let's go do it again. And ultimately talk three of them into quitting their jobs and building another company.

22:09 And, and when we did this, this was the summer of 2011 and didn't know what we're going to do other than we were going to sell recurring revenue based services through a channel and it's all the medium enterprises. Like that was the plan. And of course we understood telecommunications. So we, we decided to start with telecommunications and quickly evolved in the cloud computing and in early 2012 we were offering cloud infrastructure services to businesses and this is before Amazon Web Services even articulated AWS inside of the financial statement was this is pre AWS, this is certainly pre Google Cloud or Microsoft Azure.

22:50 So we were really early to the market and, and built that company out over the following. I stayed through 2018 and built Green Cloud Technologies into a great company. We sold it to Tiger Infrastructure Partners in 2021. You know, that was a, that was a good exit and a lot of people in Greenville did well. And you know, it was just a, it was a great company. It was cloud infrastructure at the right time, in the right place, and I think we did a good job. Really your only competitor at the time. You know, at that time our biggest competitor was a company that was providing disaster recovery services. They were, they were very small and, and not very well known and they grew super quickly and, and ultimately got acquired by Vista before around 2013, 2014, we started to see AWF, we started to see Microsoft, we started to see Google. And it's funny because people, the investment community, I raise money for that company and, and the investment community would ask me like, how can you possibly compete with Amazon?

24:03 And I'm like, look, Amazon, Google, Microsoft, they're going to get 90% of the business. That leaves 10% of what's going to be $100 billion a year market. Now it's a much larger market now it's probably a four cloud infrastructure, probably 400 to 500 billion a year at this point. And I said, listen, we sell to small to medium enterprises, we're smell, we're selling to the to the local HVAC company, the restaurants, they don't have a a Amazon and AWS engineer. They have no idea how to do this. Yeah, yeah. So it opened the door for us to provide a great sort of white glove service to the small enterprise and get them into the cloud in a way that kept us underneath the feet of the big elephants and allowed us is, is I learned to say sort of dance between the, between the toes of the elephant, right.

24:53 We could build a, they didn't care, they didn't care. They were selling the enterprise. We were, we were way below that. And it allowed us to slowly, well rapidly really grow a $30 million a year AR business and, and generate, you know, 35% of EBITDA margin. So it was a, it was a great business. I enjoyed that time and had a blast. Like I said, did that until 2018. I left the company in 2018, which is kind of funny. I was, I was the founder and CEO and left my own company. And I think I've done that a couple of times. But I, I once it hits about 100 people and there's a lot of meetings, I start to lose, lose some interest.

25:33 I I totally get it. I started a company called U-turn Health. I started doing volunteer work at a local nonprofit in Greenville where we're focused primarily on supporting families that were struggling with addiction and got to know the CEO real well and started spending the time with the nonprofit. And what I noticed more than anything, Arthur, was the majority of the people coming into the door of the nonprofit. We're not the alcoholic or the addict. It was mom, dad, brother, sister, loved one employer. It was, it was the people that had lost control and, and were scared to death and were angry and worried and resentful and ashamed and all of these things. And they were trying to figure out how to fix their loved one. And what I, what I found in the nonprofit was the majority of the work that the nonprofit did was focused on the alcoholic. It was focused on the person with the problem or the one with the, the, the mental illness or the, the, the medical condition. And I said, gosh, rich, you know, why don't we create content and build something that supports the family? Because the if the family it's better educated on the disease, they're going to be better able to support the loved one. And if they can support the loved one better, that loved one's going to have less anxiety and worry and fear and they'll be less likely to relapse.

26:59 On top of the fact it's going to keep the family healthy. And if we can keep the family healthy and maintain some sense of of just mental well-being, all of that benefits to to the addict or the alcoholic. So that that turned. Into A and the family. Like even if the the addict or the alcoholic spins out again, at least the family's got tools to know how to deal with it, right? Absolutely, that makes sense. No, you're, you're 100% on it. That's, that's exactly that was the whole vision, which is how do we create video content with, with therapist LED videos that allow the family to really learn about how to keep themselves well and how to support the loved one maintaining appropriate boundaries. And then we create a coaching division coaches with real world experience that struggle with addiction themselves, me being one of them.

27:53 I've struggled with alcoholism in my career. I'm sober, but that it's a passion play for me. I love this stuff and I love supporting families and we learned that if we provide coaching along with video content that people could get well in that. I tell you, man, it's the, it's the one company I'm proud of. Like I'm, I'm really proud of the work that we've done there because we've helped thousands of people. We do work in the Veterans Administration, we do work in jails and prisons across the country. We were awarded an 8 and a half million dollar grant from the Federal Bureau of Prisons to support prisoner re entry work to help keep them sober for a period of time as they get. Paid. I didn't know that, this is super cool. Yeah, yeah, it's, it's man.

28:37 It's I merged that company with a private equity back group in in 2022, which led to the creation of the venture fund. But I'm still involved. It's my largest private investment. It's something I care deeply about. I think that, you know, I have high expectations for the company and the company is doing well. It's a profitable company and growing. All that matters from that is the fact that we get to go do good work. And so if you don't mind, based on current events, there's exponential amounts of money being spent from States and governments to fund these type of things with no accountability and no metrics to demonstrate that the capital that's deployed, whether it's an NGO or you know what I'm talking about, the whole ministry thing. Absolutely.

29:28 And the whole doge thing discovered all that the USAID. I mean, it's despicable what's happening there. We all knew it was happening, we just didn't know a white grand scale. How can you help us understand how you measure success in that company? Because it sounds to me like it. It might be a nonprofit, it might be for profit. It doesn't really matter. But you're a business person, and so you're not going to just keep on throwing money if everybody's still addicted and the families are falling apart, right? Yeah. No, no, you're absolutely right. It is a, it's a for profit company and I did that intentionally. I did not want to start a nonprofit. I wanted. I felt like with a bad brush now, right?

30:09 Right, right, but, but I felt like in in a course I when I founded it, I worried like, hey, is, is, is Shay going to go try to profit off of addiction and services like that? And that was that was not the case. What I understood fundamentally is like to go build this company and get coaches that have gone through the meat grinder of addiction in an hour sober and therapist and psychiatrist that's going to take money like that. I'm I'm I need to go raise capital and then use technology by delivering the video content across the worldwide platform. Do that that's going to that's going to require capital. That's why I did the for profit. Listen, whatever money we make off that, it's getting donated back to the nonprofit that I created this thing out of this is not a money grab.

30:52 This is a this is this is me doing what I what I love. But at any rate, the answer to the question is it is it is hard, Arthur. It's super hard to measure success other than taking 30 day increments in in talking with the individual and finding out are you sober? Are you going to your program? Are you in a a, are you going to NA talking with the family? Part of it is just interaction. If the individuals engaging with you and they're having a phone call and they're talking, even if they're angry, it doesn't matter. That means it's a good sign. It's a good sign. So for us, success was engagement. So what we measured more than anything else was engagement, both with the individual that was struggling and with the family.

31:35 And if we kept them engaged, we had a chance. And that's all we were trying to do. Like we we're not trying to, we're not curing addiction. Like that is not what U-turn was about. That's not it's not possible. That's up to the individuals to do on their own. But what we were was a bridge from chronic, just crazy issues in the family to some semblance of calm and peace that allowed the individual a chance to find sobriety, whatever sobriety look like for them. So we would meet people where they were and try to help them and support them, whatever that looked like. And that, that can mean a lot of different things.

32:16 It can mean, you know, one individual saying, look, I just, I, I want to get to where I'm drinking 2 beers a day. It's like, OK, great, great, let's get you to 2 beers a day, right? And then having a discussion the next week, how'd you do? How'd you do it for somebody else? It could be complete abstinence, you know, and it could be, it could be just a reduction in harm, what's called harm reduction moving from heroin to to marijuana use. And so there's, you know, this is, this is a big Gray area of money and, and grants and, and federal funds is to your point, but you know, it's, it's work that's got to be done. It's work that's got to be done. And like I said, I think we're doing good work and we're going to continue to try to do that. So this is I, I don't think I've met a family who hasn't been touched by the ravages of addiction. Like everybody knows that somebody in the family that's spiraled out, right?

33:13 It's I think think I'm right about this. But you told me when someone's addicted, the family suffers immensely, especially if they haven't dealt with it before. But addiction behavior is nothing else matters except what I'm doing next having to do with my addiction. And there's triggers and all that. I get it that people just go off the rails, but it's horrifying because that addiction personality is OK. All I really want to do is do that again and I'll do anything it takes, especially with hard drugs, right? Whatever it takes to get the next fix, I'm doing it.

33:56 And it doesn't matter that before all this, my family was important to me and most important thing, Screw that. I'm doing whatever I have to do, right? That's pretty much, you know, you've hit the nail on the head. I mean, it's it's devastating for the family. And, you know, I look back in the years when I was an, you know, active alcoholism and the damage I did to my children at the time will will last a life, a lifetime. I'm in my my daughter ended up going to a college that is a Christian college that had a sober campus. You know she did that because of, because of. Growing up with a good outcome. It was a great, it was a look, it was a great outcome. But the the reality is like my actions impacted her. But you're right, when when an active addiction in this, this could be, you know, whether it's drugs, alcohol, sex, gaming, gambling, which is just horrendous because it's completely destructive.

34:52 But the when an active moment, the the dopamine release in the individual is so strong and so overpowering that the frontal lobe shuts off, It is impossible to make a rational decision. You can't do it. And that's, that's unfortunately a stage of addiction where you have to go get help. The only way to fix that is you have to go off and and get help and get treatment to unwind what has happened with your brain. But it's, it's a battle, dude. But I wouldn't listen. I wouldn't trade it for anything. I mean, I, I learned so much about myself going through alcoholism and, and finding sobriety.

35:33 And I, you know, out of it came a great company that's doing good work right now today. And that fires me up. And I think it's giving me, you know, resilience and persistence and determination to do whatever I'm going to do and do it in the right way. I, I, I no longer all I used to do is chase money and status and things and I couldn't care less about any of that. Now I've I've, I've, I've, I've got it, I've lost it, I've got it. It doesn't matter. It's empty. And the only thing I care about now is quality time with, with my family and the people I care about and I love and, and my health, my kids health like that.

36:14 Everything else is kind of noise. It's kind of noise. Yeah, if I can. I can operate that way, then I'm good to go. Yeah, totally. I mean it takes a while. And also I will say that if you've lost it, made it, made it, lost it, at least you intuitively you know you can do it again. So when people say it's not about not, this isn't directed towards you, it's not about the money, it's usually is not about the money as long as you've got Maslow's hierarchy needs in place. And then you can focus on like the family's the most important thing, right? So yeah, it's really. I, I think you're, I think you're right on.

36:55 I mean, I, I think about like the fund that I'm raising now, right? It's, it's, it's going to be a, you know, call a $15 million fund that would put most venture capitalists to sleep, right? It's just like you, you can't make any money doing that. And, and The thing is like, no, I can't make tons of money, but I can make a great living and I can do the things I want to do and I can give back to my community and I'll I'll create wealth. There's wealth on the back end of that. No, it's not ridiculous money, but that's fine. That's not where I am in my career. I'm good with that. Yeah, it's, it's when people ask me because, you know, this I'm mostly just a private investor and the whole family office insights thing is just a beautiful byproduct of all that that works.

37:40 People often ask me, OK, so you know, how about you writing us a check? And it's it's I want to talk about it in the context of what's interesting to me, just because it's a stage life thing like you are. I'm not interested in being a passive investor at anything, right at this stage of my life. I've got the stuff settled that I don't have to worry, but the last thing I want to do is be a passive investor. This is just me. I want to be a control investor if I'm going to be an investor, right, because I only have 32 1/2 more years, right, Right. I'm not going to wait like I had 62 1/2 more years. That's right. That's.

38:21 Right. Yeah. I mean, I think it's, it's, it's been a shift of, I guess focus for me in that I, I hit a point where I was like, I don't want to go start another tech company. It was like, I, I don't, I don't want to start another cloud computing company or telecommunications company, but I want to stay engaged in the startup community, right? And how do I do that? And ultimately what I did is in in early 2022, right after I had merged U-turn with the private equity group out of out of Dallas, I'd approached the city of Greenville, the the nonprofit that's in charge of entrepreneurship and innovation. I said, look, we we need an accelerator program. These founders are struggling.

39:05 They can't raise capital. Like all the stuff that that everybody knows about how hard it is. I said, why don't, why don't we build a program? They said that's great, Shay, go do it. Yeah, right. Good luck. Good luck that that turned into it turned into a passion play because I was like, you know what, this needs to happen. So I ended up, I raised 400,000 and nonprofit funds for the city with the condition that, that the city direct that money to build out this accelerator program for early stage tech startups. And we and we did that and I helped run that program through 2022 and 2023. And then during that process, it just became obvious that I needed to raise a small venture fund to to help fund some of these companies. And that's what I did with with the first fund. I went around Greenville to to my network, the people that invested me with me in the past, you know, got 45 investors, right?

39:59 Six and a half million dollars. It's not much money, but. But you know what we've we've deployed four and a half million of it in 11 companies. We've created 60 jobs and we're building right here. And I think now with what I'm, what I'm doing with the second fund is I'm simply expanding the thesis across the state of South Carolina or the Carolinas for that matter. I think there's just an enormous opportunity to put early stage capital to work here because there's just not a lot of venture capital here. And there's plenty of capital. In Atlanta or Raleigh, but when you come to South Carolina, it's a venture capital black hole, which for me brings opportunity to innovative. People. Of course, of course we've had great companies come out of South Carolina and create an enormous, just like my last company.

40:45 I mean, if you can build a company from scratch and and get it to 30 million in AR and sell to private equity, that's a that's a lot of value creation. Guess who made all the money? Goldman Sachs, Spring Capital Partners, a family office out of Alabama. You know, they made all the money. There was very little money that was made in in South Carolina. And part of the thesis is like, look, if we can create value here and ultimately create liquidity, that's going to get reinvested in the ecosystem and that's going to get this flywheel moving. And that is what? We have to do here totally. Tell me a little bit more about the process of helping the families and if anything, what the audience can do to help that out. In terms of U-turn Health, the addiction company, so U-turn Health is the name of the company that's YOUTURNU Turn. The idea was like U-turn your life around. And, you know, I think the message for the family, Arthur, is more than anything, try to stay calm. But you've got to find a way to disconnect your personal fear, anger, resentment, worries from the individual that's struggling.

41:55 And because The thing is, when somebody is in an active addiction, they are simply not thinking correctly. They they can't no matter what. The behavior is so illogical and makes no sense. And that is a sign that the frontal lobe was shut off. But for the family, it creates so much anger and worry and resentment that it overwhelms them. And you know, unfortunately that's what creates these arguments and these fights and everything else. There's, there's no one solution. There's no single solution. Some people hit some sort of bottom and figured out on their own. Others it it, it takes a lot, unfortunately. And for a lot of people, it's going to take treatment and, and maybe a lot of treatment, it just does. But there's certainly hope.

42:40 And I have seen family after family after family go through a resurrection of, of happiness and love and, and sobriety in a way that is just unbelievably meaningful. And so it does happen. Encouraging, Yeah. Yeah. So I've had a daughter who married the wrong guy, got hurt loading a truck, got on the oxy. And I mean, he completely shut off. And I give my daughter a lot of credit because she got to the point saying I love this guy but I can't fix him, it's old. And so I've got a daughter. I'm out of here.

43:21 Like she actually didn't fall into the trap. Maybe it's not a trap. As a father, I felt like it was a potential trap of her saying I'm going to try to fix this person and hang in with him because I love him and I'm going to try to get him to sobriety. She just said that's it. He's demonstrated that there's he doesn't want to help himself. And maybe because of the frontal lobe was shut off because the oxy stuff's just, you know how bad that is. Good she mean good for good for her. Yeah, she she bailed and he's still sleeping in his car as far as we can tell. God, it's it's, it's horrible. I mean, good for her to have the self realization and the, you know, the courage to say that's it.

44:03 Like I can't do it anymore. And you know, she had your granddaughter who was obviously so important to you and her daughter that she had to care for. So it's until you have gone through it personally, which you have, it is so hard to even understand the level of emotion that goes through that whole thing from from fear and worry to uncertainty. And there's, there's so much shame and uncertainty tied into that disease that it's just, it's devastating. I've lost, it's countless now. I mean, I can't count on two hands the amount of people, friends that I've lost to, to overdoses and suicides due directly to addiction is I was went through my period and then got in and then have stayed in touch with people and stayed and maintained contact in groups. It's, it's horrifying, man.

44:51 It really is. I mean, it's just, it is a scourge on society and it hurts so many people that don't deserve it. Have you had any? I've had some recent experience with people who unintentionally were subject to exposure to what's the drug that Trump's blowing All boats. Or. Fentanyl, fentanyl unintentionally, I mean, they were doing drugs, but they put the coke in their in the little plastic bag in their front pocket against their leg and it was so much fentanyl in it that it killed them. Yeah, sure. Absolutely. That's one example. I've had a couple of people that I know that have been exposed to that and died as a result.

45:33 What's going on with that in your view and how's that relate to what you're doing in the the drug addiction, alcohol addiction family? Yeah. I think at a high level, it's pure business for the cartels. It's the gross margins are greater with fentanyl. I mean it's that simple. They, they can buy it, produce it, make it and transport it cheaper. The gross margins on that, on that drug are enormous versus heroin and it takes less. So the quantity that needs to be transported is easier to hide. It's just, it's, I had to say it's a business, right? But I. Think yeah, it's, it's, it's, it's, you know, it's economics. It's, it's just, it's unit economics for these guys.

46:13 But I think the it's an opioid. So it's what, what we have found, what I have found is the majority of the individuals that get hooked on fentanyl are, are looking for heroin. And it usually starts as heroin and they can't find clean heroin and they get some fentanyl or the heroin has fentanyl in it. And that would, that's what a lot of times that's what causes the overdose in the, in the death. If you're, if you're used to doing a certain amount of heroin and you, you know how much you're going to shoot up, like if, you know, just take the average, the, the drug addict in your, in your vision in San Francisco, they know how much heroin they need to shoot up. But if they buy some heroin that's adulterated with some fentanyl and they shoot up the same amount, they're going to die.

46:59 They're just going to die. So it's bad drugs. It's, you know, this is completely unregulated clearly. So they can cut it with whatever they cut it with the dealers, the manufacturer. So it's although, you know, I've, I've seen people, I've met people, I know people doctors typically that that are hooked on, on fentanyl instead of heroin because they can, they have access, they have access to fennel. Nurses has a legitimate use like absolutely absolutely. It's actually a good drug. It probably it's a. Great drug. If you not if you not break our leg on a skiing accident, we're going to, we're going to want some, we're going to want that to make sure we don't feel the pain.

47:40 But yeah, it's, it's fortunately the overdose deaths, you know, maybe they've peaked and they're, they're starting to come down. And I don't know what regulations need to happen. I'm, you know, I won't get on on my soapbox about flaws and everything else because I've, I've got a lot of opinions there that that are sort of irrelevant. But I think that, you know, there at least there's been a focus on it now and a lot of people care and a lot of people want to address this issue. And to your point earlier there, there's not a family out there that has not been impacted. If there's a family who has not been touched by addiction, they are in the clear minority because the huge majority of America has a loved one that has struggled with addiction in the last 12 months.

48:22 And let me tell you something, you know, if, if, if your 17 year old daughter hasn't been home in 2 days and she's hooked up on opioids, it impacts you. It can, it swallows the, it swallows the family, it swallows the family. So you know. Can't think about anything else. There's nothing else to think about. It's the only consumes everything. So you've got the daughter who's struggling, who's out of her mind, and then you've got the family that is literally distraught that whether they're going to work or not, all they're thinking about is the daughter and how to fix the issue. And they can't fix it. And that's what makes it so scary because there's simply no Band-Aid to put on this wound to make it better.

49:05 It is a process that takes a lot of time. Is there a way that if the audience has been affected about this by this and they can donate to the nonprofit, is that helpful to you? Absolutely. We we have a nonprofit called Favor FAVOR. It's a national nonprofit, Faces and Voices of Recovery. It's favorgreenville.org I believe is the website. And you know, it's a fabulous nonprofit and we're doing great work locally, but favor Green favor National is a is a great national nonprofit that does work, really does a lot of work with the families. And that's again, that's been my focus more than anything else. Arthur is like how do we help the family and get the family through this, this me grinder of addiction. Yeah, it totally makes sense.

49:53 So let's move to the a little bit about the venture fund. I think you said 11 companies, 6,000,000 bucks and now you're moving to raise the next 15. You're going to be in the 20 companies. Same. Yeah, similar idea, 20 companies over three years precede and seed B to B software, vertical AI focused in the Carolinas, primarily in South Carolina. I really like the idea of working, as I say, belly to belly, eye to eye with the founders. I like to be in front of the founders, and it's not because I'm smart, it's because I've got experience. And you know, what I try to tell the founders is, look, I've stepped in all the potholes. If there's a mistake, I probably made it and let me help you not make that mistake. So a lot of my time is spent with the founders, interviewing potential employees, working with potential employees and helping go to market strategies at at the earliest stages. That's where I spend a lot of time. I think I'm good at it.

50:50 It's what I like to do. And I also know just those first five employees are are crucial. It's one thing to make a make on your 50th employee. If you make a mistake on your 5th, it could be catastrophic. Yeah, totally makes sense. You know, I mean, it's just you. You just, you just don't know and. If you've never been through it, if you're a first time founder, if you're 35 years old and you've never really done that, you need help, you need coaching. So I try to provide support, my partner and I do around that. But we think, you know, look, I think South Carolina is underserved in terms of venture capital. That allows me to see all the deals. You know, I just I get deal flow in a way that's unusual because all of the economic development organizations across the state know of us and send the best startups to us. So we see plenty of deals and we don't you know, we don't we don't back solo founders and we don't do pre revenue companies. So we've got our box.

51:47 You've got to be software, you have to have B to B, you have to have at least two Co founders. You got to be full time. You have to have real customers with real revenue. And if you have that, then we can talk. And you know, I, I meet with founders all the time and sometimes it's not a fit. And of course I say no, well, more than I say yes, right. But, but you know, the first portfolio we're doing really well. We've got some great companies and some standouts. And I'm excited about the second portfolio and looking forward to putting that money to work across this this beautiful state of South Carolina. So are they expected to go through the? Accelerator or is it just an additional thing? It's an additional opportunity for them, you know. The thing is, I like to back the companies that go through the accelerator because I get to spend time with them. I mean, I'm watching them from day one in the accelerator and all the way through the process.

52:37 I'm also one of the ones helping teach them through the accelerator program. And a lot of what we're doing the accelerator is how do you tell a story, like teaching them to tell the story and to learn to do the pitch. And then part of it is like, how do you build the business thinking about culture and leadership and compensation and go to market and all of these things that are so important that if you've never done it, you're just not going to know it or you're going to make mistakes along the way. So I learned a lot through the accelerator programs, whether it's in Greenville or Charleston or Columbia. That's where I learned the most about the founders. And that's what I liked about. Yeah, Would you we've.

53:18 Been talking a lot about this lately, but it's always been something that I felt was really important. Not because I'm a great storyteller, but because I'm a good listener. And I've been telling people for years that you could have the best team, the best idea, the best financing, but if you suck at telling the story, you're out. There's no chance. And that's it. Because the. The telling of the story, I think so many founders think telling the story is about doing the pitch to raise capital. And what I tell them is like, that's only one piece of it. You have to be able to tell the story to recruit employees, to go get customers. If you can't tell the story to everybody and then those individuals also tell the story because they get so impassioned about it, then you're not going to win you. So to me, that's it.

54:11 It's it's being able to tell the story about the company, but then it's giving them the confidence to sell themselves so that they can hire the very best employees. That's what the best, you know, storytellers do. That's what the best CE OS do. Yeah. And as it relates to and. I've seen this so many times. As you know, we have lots of really good family offices that are members and many that we know well in in the office insights and many that deploy capital in a meaningful way. And in almost every case, there had to be certain things that align. But if somebody couldn't tell the story, well, it just it was over it over before it even started, right? Absolutely, absolutely.

54:55 It's the. It's and it look, it's there, there's a there's a science to it. I mean, there's a let there's there's a way to tell a story. I mean, there's books that are written about it. And I think I coach founders go read the book story brand. I mean, story brand is a great one to learn to tell the story, to understand how to make somebody the champion and have the villain and have all the all the characters act. And there's a way to do it and it's super important. But you know, that's one way to measure the founders. But for me, ultimately the founders, it's about it's about attitude to dude, humility and coach ability. If they're if they're not humble, if they're not humble, there's nothing to talk about because they're not going to listen, they're not going to pay attention.

55:39 They obviously have to be smart and they have to have the right attitude. But I like scrappy, hungry founders that have, that have had a tough childhood, you know, high school athletes, college athletes, people that have military addiction, military, things like that. That's what I love. I mean, I, I love the underdog. I'm not, I'm not running around hard or Y Combinator trying to find the best founders. That's not what I, that's not what I'm doing. I'm, I'm going to find the, the folks that are scrappy, that built something on their own and they're all in. And if I can find those and they're, they're humble and they've got the right attitude, then there's a good chance I'm going to back them. That's that's really good to hear. We're all product of our life experiences.

56:21 For me, I've always appreciated the person who was running through walls because that's what I I've always had to run through walls. It's like, Oh yeah, watch this. Yeah, tell me no and see what happens. Yeah, right. Oh Lord, I love it. I love it. So no, you're right. Thanks for doing this. And then, yeah, absolutely. We're going to. I'm not sure we have a date. But we'll let everybody. Know when you're coming on and tell the story more in detail about the fun. And I super appreciate you spending New Year's the day with with me here for for a little bit. And no, it's been great. Yeah. I I. Appreciate it, Arthur. That's been fun. And appreciate you giving me the opportunity to share the story and tell it.

57:04 It's always fun and brings back memories. Yeah, it's a great story. Appreciate it. Appreciate it. All right. Hey, thank you, Sherry. Happy New Year, man. Have a great night. Yeah, have a great New Year Day. Tomorrow. OK, See you. Thanks everybody for being here. Bye.