Show Notes for the cavnessHR Podcast

Anyone that reaches out to Jessica for a consultation or needs transactional work done and they mention they listened to this podcast and to this interview will receive 20% off their first 3 hours of work along with their free initial consultation.

Jason: Welcome to the cavnessHR Podcast. I am your host Jason Cavness. Our guest today is Jessica Vittorio. Jessica you're going to be great today.

Jessica: Yeah, I am always.

Jason: Jessica is managing attorney at the law office of Jessica Vittorio. An adjunct professor of business law and a host of a weekly business related podcast. She received her B.A. from Southwestern University and earned her JD from Baylor Law School. Her practice is based in Dallas, Texas and focuses on providing startups and small business owners the insight and experience they need to properly grow their business. Jessica is active in the startup an entrepreneurial community throughout Texas and really helps to advise companies on formation, fundraising and governance and other daily operational issues. Jessica is a strong believer, that by understanding a company's philosophy and values. You can empower clients to establish and grow the business in ways that will enable future success. In addition to the work within the business community, she also serves on the board of various organizations. As an active member of the Law Practice Management Committee of the State Bar Texas. Jessica you have a full state there don't you.

Jessica: I do. I don't like to be bored so I've actively avoided that.

Jason: Southwestern, that is the school in Georgetown, Texas right?

Jessica: It is. Yeah, I'm surprised you're familiar with it. Not that it's not a great school it's very small though.

Jason: So, what's keep you busy?

Jessica: Most of what I do is like my bio says I own a law firm that specializes in transactional business for startups and tech companies. That is the bulk of what keeps me busy every day. I always like to say that I get to help people a lot cooler and smarter than me change the world and hopefully facilitate them doing that in some way. It's a fun job and I enjoy it.

Jason: So why startups, why not something else with your Law degree, why startups?

Jessica: Yes. So actually, when I first graduated law school I worked for Congress for a year. I was legislative counsel for a member of the House of Representatives and it was a great experience. I really loved it. But, through working on small business policy and intellectual property policy, I got to talk to a lot of entrepreneurs and business owners. Also, it just wasn't really the traditional practice of law and I wanted to go back to something more. Traditionally practicing with clients. So why small businesses or entrepreneurs and tech companies. Both of my parents are actually entrepreneurs themselves. I grew up kind of in that world and understanding business owners and interacting with business owners and I just really have a passion for helping enable that demographic of people to do what they do best.

Jason: Do you only practice in Texas?

Jessica: All of my companies have some nexus to Texas. All of them have some connection to Texas. Whether they're registered here or we're working on a transaction that's based in Texas. But not all of my clients are based here year round. I have some clients in California and I have some clients on the East Coast and kind of everywhere in between.

Jason: Do you have to have a bar license in each state to practice or how does that work?

Jessica: So, if I was going to go to California and work with a company that was based in California and all of their work was in California. I would have to have a license in California. For that reason, I have a couple of partners, not formal partners but individuals that I collaborate with a lot. So, I'll work with them in the event that I'm working on something that requires a state license in the state.

Jason: When a startup comes to you and they want you to advise them or join their team so to speak. What makes you say no to a startup?

Jessica: Really for me, it's the passion of the entrepreneur themselves. I like to work with companies that, there's a reason bigger reason than profit driving them. Profits great, we all love profit. I don't live in a world where profit isn't important. But I also want to work with people that have a bigger underlying passion. Because there's a million and one ways to make money and in the entrepreneurial community we see that a lot. People come up with ways to make money and that's great. But what I really enjoy is working with the entrepreneurs or the founding team that have a personal connection to what it is that they're doing and really are trying to make the world better in some way shape or form. So that's kind of the determining factor for me.

Jason: For the startups, you advise or just see in general. What characteristics do you see in founders that make them successful?

Jessica: Definitely a willingness to work hard. I think the startup community gets a weird reputation for a lot of people that are only working three or four hours a day. I know that's a big thing and that's always hilarious to me. Because I'm constantly e-mailing clients. I get e-mails from clients at like one two three in the morning. So, these are people really are working. So many more hours than the traditional nine to five. So, having the stamina and the endurance and the passion to be able to put in the hours. Also like I said going back to believing in the concept enough to actually vocalize what your idea is and being confident enough to be able to do that. I think that's one of the hardest parts of being an entrepreneur. What I see in clients is they may have a great idea. But if they don't have someone on their team that can articulate that idea. Then it's not going to do anyone any good. Definitely having the confidence in the people to articulate what it is you're trying to do in a compelling way.

Jason: I have my own startup and that's definitely a myth. What did someone say? You work 80 hours a week in order not to work 40 hours for someone else.

Jessica: Yeah yeah and for free for a really long time. To be fair it's the same in the legal profession. I have people call me every day that I went to law school with and that I know professionally. They'll say, Jessica, you seem to like your practice in your life so much I want to do what you do. I'm like Cool. I think everyone should own a business, be an entrepreneur if they want to be. But also, what I tell people is what you are not seeing is the two years when I made zero dollars basically. So, do it but also recognize the situation you're getting yourself into because I also think that becomes an issue. People don't plan enough on the back end. Be it leaving a job they're not prepared for the financial strain that starting a business can put on them. That becomes an issue either in their personal life or with their partner or whatever the situation is.

Jason: I think a lot of people quit their job and say I got six months of savings to live on. Well, odds of you getting a profit in six months are pretty slim to none.

Jessica: Yeah. Yeah. Definitely, I mean if you're making a consistent decent profit within three years you're doing well. That statistic I think is one people forget a lot of times.

Jason: From your time advising startups, what do founders consistently get wrong about the process.

Jessica: I think one of the best things about entrepreneurs is that they have a do it yourself go-getter mentality. Which is great for being an entrepreneur. But there comes a point in every business where you have to recognize what it is you don't know and bring in professionals who know how to do those things. I see a lot of young companies not devoting monetary resources to accountants and lawyers and things like that. Not to say you should be spending all of your cash on hand on professional services. But I see a lot of companies come to me when they're trying to do their first or second round of fundraising and we end up having to go back and retroactively correct a lot of things. That legally if they had just done properly in the first place would have saved everyone some headache. So, preparing that sort of foundation from the front end as opposed to trying to deal with all those issues. When you're looking for money from a VC or an angel or whatever. I think that's probably the biggest mistake. They're so used to being the source of knowledge and vision for everything that they're doing that they don't always reach out to people when they need to.

Jason: Jessica, when should a founder start the fundraising process? After they have a certain amount of traction, a certain amount of customers. What's your advice on that?

Jessica: I think it varies wildly. You have to know what kind of fundraising you're trying to do. Are you trying to do just friends and family round. Do you have traction and numbers that an angel or a fund could look at? It also varies by your target and by industry. There are some industries where all an angel or a fund really needs to see is a concept. A strong concept with maybe a little bit of validation. Some industries want to see a year's worth of numbers or six months’ worth of numbers before they'll even begin talking. Best thing a founder can do is connect with other founders so that they have people to bounce that experience off of. Also, there are a ton of great books about it that they can check out. If they want to, so do your research basically.

Jason: Jessica, everyone says don't quit. Keep on going, work through the hard times. It is not an easy process. But when should a founder stop? This is not working out. The MVP is not working, you can't get product-market fit. This is not working, maybe you need to do something different.

Jessica: I think every founder should go into a project. Especially an early stage project with their cutoff point in mind. Because what you see especially in cities outside of Silicon Valley where the cost of living is lower. Is people can hang onto ideas for a lot longer because their cost of living is not as expensive. Their overhead isn't as expensive, so they can hang on to an idea that's not making them any money and really try to push it probably for longer than they should be. I think part of it is - A: go into it with some concept of when am I going to call it quits if I don't get an investor at a certain point. If I can't find a technical co-founder at a certain point. If I don't hit certain KPIs or also be aware that you need to be listening to the feedback you're getting from people. Especially angel investors, Venture capital other people in the community. Obviously, you don't need to take everything that the people with the capital say as gospel. But if you're consistently talking to Angel investors or Venture Capitalists and they're telling you that, they don't think it's a great idea. It's not something they would ever invest in, at some point you have to realize that maybe there is some validity to that. As people that see hundreds of companies a week. You do have to take into account that they are subject matter experts. Not to say that you should take that as gospel. But definitely should take it under advisement I think.

Jason: So, another question. So, you know a lot of founders will try to contact VCs. A lot of founders don't realize how busy VCs are. They are literally getting hundreds of calls and emails a day. They have a lot of noise to go through. How would you advise a founder to contact a VC, if they don't know any VCs?

Jessica: I think solving the foundational issue first. The best time to talk to an angel investor or a Venture Capitalist or at least the ones that I interact with. They prefer to be reached out to before the founders actually fundraising. They want to establish a relationship with them prior to them actually doing a fundraising round. I think that that's a beneficial relationship to try to get. Because then they can give you some insight into hey these are red flags for us. Just so when you do a fundraising round and you can keep those things in mind as you're progressing through your company. Assuming that you haven't developed those connections already.

Jessica: You know try to find someone else in the community that has them. In my experience, it's a lot easier to connect with capital when you're being connected through an individual as opposed to just cold calling. To be fair, I know plenty of angels and VCs who actually do read every presentation that is sent to them. I think that an additional thing to keep in mind is when you start sending your pitch deck and your executive summary out to potential investors. It should be a well-oiled machine at that point. You should have gotten a lot of feedback on it. Don't send them your first draft pitch deck or executive summary. Because they're going to give you a minute to scan over it. If they find something intriguing maybe, they'll keep looking. If they don't find something intriguing, they're going to move on to the other five hundred emails they've got in the afternoon related to the exact same thing. Don't give them a reason to pass over your pitch deck and your executive summary. Especially, if you're just cold sending emails and you're not personally reaching out to them through a mutual connection. Then definitely make sure that your pitch deck is good to go.

Jason: So, in Texas, Dallas and Austin are the two main startup areas correct?

Jessica: I mean Houston and San Antonio also have some startup activities. So, I wouldn't say it's just Austin and Dallas. Austin certainly gets the most press. I think Dallas doesn't really get enough press for the amount of great startups that we have coming out of Dallas. But all the major cities are involved in the startup scene to some extent.

Jason: So Jessica moving on. Can you talk about a time you were successful in the past? What you learned from this and what we can learn from this?

Jessica: Something I always think about as the first private equity deal that I worked on. It was not even really an early stage company. They'd been around for quite a while, but the founding team was very young. The majority of them did not have experience in this type of dealing previously. So, it's one thing to try to sit down with one entrepreneur or founder and explain the technicalities and the nuances of a private equity deal. But to do it with a board of multiple young founders is definitely a challenge. Also, you know I was a young attorney as well and was working on my client management skills and communicating with my clients. So, it was definitely a learning experience. But you know we successfully negotiated the deal all the paperwork got done and they eventually got the money that they needed. The biggest thing that I learned from that is you have to find a way as an attorney or even like we were talking about earlier as a founder you have to find a way to communicate the information, you're trying to convey to people. In a manner they can actually understand. Because if I hadn't communicated to them the technicalities of that deal in a way that they actually could comprehend and tangibly understood. Then they couldn't make an informed decision as founders and that's not the position that you want to be in as an advisor or as a counselor. So, the same thing as a founder, making sure that you're communicating and articulating your ideas in a way that your audience can understand or else your idea is not doing anyone any good.

Jason: Jessica next, talk about a time you failed in the past. What you learned from this and what we can learn from this experience.

Jessica: When I worked for Congress there was one point when the congressman I was working for had asked me to draft a piece of legislation which was something that I did regularly. So, we kind of fleshed out the legal technicalities and the structure of this piece of legislation. I spent a lot of time drafting it and I send it to this third party group that just kind of checks over legislation. They email me back literally within two minutes and you always know that that's a bad sign because that means there's something fundamentally wrong. So, they email me back in two minutes and they're like, what you're trying to do. It had to do with the tax on exports. What you're trying to do is blatantly unconstitutional. You cannot tax exports per x,y,z section of the Constitution and needless to say my boss was not happy with me. Part of the conversation that we had following that experience was isn't it your job to know something like that. I was fresh out of law school at the time I was the only attorney in the office. So, I had never really encountered an experience where a client or someone I was working with and advising really expected me to know everything about all the laws in the world. Which is just not realistic right, no one can know that. It was a failure in that instance, but it taught me two things. One, you have to know what you don't know and to you have to be willing to communicate that. There is nothing wrong with saying. I don't know if you can do this, but I know how to find out and I can go research it and check it. When I was really young and newly licensed, I didn't like saying that. Because I thought that it made me look like I didn't know what I was doing. When really, I think the exact opposite now. If you ever encounter an attorney who tells you, they know the answer to everything that you may encounter as a business or as an individual. That person is not telling the truth. That's just not accurate. No one can know all the laws and no one can be good at all of them.

Jason: I am the same with HR people. Whenever an HR person says I'm an expert on everything. I always cringe, like that is impossible.

Jessica: I know I know. That's the first thing. I mean even I used to work in energy and environment law and that's an area you'll have someone that does water regulations and air regulations and those are very different areas. So, when I used to meet environmental attorneys who said oh, I just do environmental law. Well, what area do you specialize in. If they can't communicate that I start to get a little worried about them because it's like, there are too many regulations for you to be good at all of them

Jason: Yes. Jessica, now tell us about someone who has helped in the past and how they helped you.

Jason: There have been a lot of people that have helped me throughout my career I've been really lucky. My parents, my mom especially has been a big help. Like I said she's an entrepreneur. She owns a very successful company and she was really supportive when I decided to go out on my own. You know financially in the very beginning. But also, just emotionally supportive of what I'm going through and the decisions I'm trying to make. So that's been really helpful. There are subject matter mentors I have in terms of finding other attorneys that own practices, work in the same areas as me. That have been really supportive and helped me to grow my practice. I have some really funny stories, really good things I did with the practice when I first opened. Thankfully I had some willing mentors that were willing to give me advice from the very beginning. But also, now you know the community helps me all the time. It could be someone who just started their company yesterday but getting feedback from them talking to them, just creating a sense of community. All those things really helped me do my job better. I'm really grateful just for the community that we have in Dallas/Fort Worth.

Jason: Jessica, tell us something about yourself that most people don't know. Your family close friends know. But most people that deal with you day to day don't know this about yourself.

Jessica: This is the hardest one I was trying to think of this and probably that I am a terrible runner. I have been told on multiple occasions that I run like a penguin by different people. So, there you go, now all the internet knows that. I'm so excited. I know as soon as I say that, the first thing people say is well now I have to see you run. I'm pretty convinced how I will die is like not running from something. Because I hate running in public that much. There will be something I have to run from I just won't do it.

Jason: I understand you have a book to recommend for our listeners.

Jessica: I do. I was thinking about it and as we went through this I thought of a second one. The original one I was gonna say is a really cool book called Mindwise that I just read recently by Nicholas Epley. It talks about how we attempt to understand all that what other people are thinking and feeling. I think it goes back to that communication that we were just talking about and being able to articulate your point. But then a really foundational one especially for founders who are going to be doing fundraising is Venture Deals by Brad Feld and Jason Mendelsohn. It's a great book it's been around for a while. But I do think it is a really good high level summary of the venture deal process and what to be on the lookout for and just from familiarizing you with vocabulary.

Jason: Jessica, I understand you have something for our listeners.

RESOURCES BELOW!!!!

Jessica: I do. Yes. So anyone that reaches out to me for a consultation or needs transactional work done following this. If they mention that they listened to the podcast and to the interview I will give them 20 percent off of their first three hours of work along with their free initial consultation.

Jason: Jessica, can you give us your social media links, so people can reach out to you?

Jessica: Yes. You can connect with me personally on LinkedIn at Jessica Vittorio. You can also find me on Instagram and then I have a podcast called, “Shit your lawyer says”. That's about weekly business, we talk about a legal business concept every week. You can find that on Google Play, stitcher, and YouTube etc..

Jason: To our listeners, we will have the links to her book recommendations, her resources and all the social media links on our show notes. You can find the show notes at www.cavnessHRblog.com. Jessica, we are coming to the end of our talk. Can you provide any last minute advice or wisdom to our listeners on a subject you want to talk about?

Jessica: I think the biggest thing that I always tell myself and founders that I'm working with is a find something you're passionate about. Then be true to yourself in the process of trying to achieve that goal. You're always going to be a poor imitation of someone else. It's great to have inspiration, but at the end of the day, the more authentic you can be to who you are as a person. The more people respond to that positively and I think the more successful you will be in the long run.

Jason: Thank you, Jessica. Jessica thanks for your time today. Really appreciate it.

Jason: Definitely. Thanks for having me.

Jason: To our listeners, thank you for your time as well and remember to be great every day!

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CavnessHR: Focus on your business, we've got your HR

Be Great Every Day!

January 13, 2019

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Show Notes for the cavnessHR Podcast

and our talk with Jessica Vittorio Managing Attorney of The Law Office of Jessica Vittorio

“Mindwise: Why We Misunderstand What Others Think, Believe, Feel, and Want”

“Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist Hardcover” by Brad Feld and Jason Mendelson

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