Jeffrey Fidelman : Fidelman & Co.

Brandon Parker00:00Today's guest is Jeffrey Fiddleman. He's a Harvard grad cum laude, started in high finance with firms like Morgan Stanley and HSBC, then shifted into venture capital and startups. Yes. Now he advises and invest in early stage companies using his background in banking, real estate, and entrepreneurship to help founders raise capital, scale teams, build businesses. He brings a rare three sixty degree view of how to grow a company from the boardroom to the trenches. The Legends of Land Show with Brandon Parker.

Brandon Parker00:31Deconstruct the tactics of world class land investors and learn tools to build a seven figure land business. The Legends of Land Show is Welcome to the show, Jeffrey. I'm pumped to talk to you today. Likewise. Thank you so much for having me, Brandon. Yeah. Absolutely. So your journey's pretty unique from real estate brokerage to Wall Street to VC investing. Now you're consulting. What core lesson did you carry from each phase, real estate, banking, venture capital, that guides how you advise entrepreneurs today?

Jeffrey Fidelman01:11I think it's tough to remember what was the lesson from each one going to the next. But looking back on it, I think that I can distill a few common denominators and one that always comes top to mind that I speak to my team about as well is consistency. And just being consistent in whatever field you are in, whether it was real estate, whether it was finance or venture or even what we do now with investment banking, consistency and also showing up when nobody else is. And I'll never forget that one of the first jobs that I had on Wall Street when I was a cold caller effectively, they made us work through Black Friday.

Jeffrey Fidelman01:50They made us work through the holidays. They made us work in last day... Last week of August. And, of course, the questions always came up, like, why are we calling people? No one's really around. And the reality is that the people who are around are often not getting phone calls, and the people who need to get things done in those periods of time when they do call out, there's very rarely anyone on the other end of the line picking up the phone. So between consistency and just showing up when nobody else does, and I find that to be part and parcel, is one of the main lessons that I've learned through my career so far.

Jeffrey Fidelman02:26Just making sure you're consistent, showing up when no one else does, and I think there's an adage around if you continue doing that, then you'll find yourself amongst one or two people that did the same thing you did.

Brandon Parker02:38Beautiful. What do you think about consistency as far as entrepreneurs go when it comes to staying focused on a core born goal as far as not getting diverted by shiny object syndrome?

Jeffrey Fidelman02:56I think inherently as entrepreneurs, we always get diverted by shiny objects, trying to go into a new business line or trying to launch a new a new widget or a new service underneath what we currently do. I think that when you're just starting out, it is actually a good practice. You'll hear people often say, and I will say the same thing, that you should lean into what you're good at. Really focus on what you're good at and be best at it. But in order to get there, I do think that you should start out by doing everything. I mean, I can say, frankly, ten years ago when I started this company, I said yes was the answer, and then I asked what the question was.

Jeffrey Fidelman03:34And over the past decade, I will now often... I will often state what we do as a firm and then tell people flat out that if you're looking for anything outside of that, I'm sorry, but we are not the people to come to. And I think that goes the same to apply to real estate or entrepreneurship or real estate entrepreneurship if you're building a certain asset class or if you're building a fund to invest in a certain asset class. At first, you wanna take anyone's money just to figure out what works and get some skin in the game to to start x y z project.

Jeffrey Fidelman04:08But over the course of time, you will develop an expertise in an asset class, in a certain structure, in a certain type of fund or deployment of fund or origination of assets where you will no longer just take in every dollar that comes your way in order to deploy it, but rather have a very specific thesis of how that capital gets deployed and then reverse engineer the capital or reverse search for the capital that aligns with your thesis and investment philosophy that will just go in, and that way you can deploy it based on your expertise.

Jeffrey Fidelman04:41So I think it's all fluid in terms of building a business, whether for a practice in any case, that you do have to say yes to everything, and you do get distracted by shiny objects, and I think that's normal. But at the end of the day... And I'm... I was in shock when I said this to somebody else a few years ago, but it really is true. Find what you're good at doing and just double down, triple, quadruple down on that because that will ultimately make you even better at that thing.

Brandon Parker05:10So staying broad in the beginning gives two advantages. One, finding out what you're good at, also finding out where your products kind of fits, then narrowing both those over time and getting more kind of ruthless about how you do that. So with that concept, if you were to, now that you have a lot of experience in different places, if you were to start something new, do you feel like you can shortcut that and start pretty narrow because of your background?

Jeffrey Fidelman05:43I hate to use the answer of it depends, but it really depends on what it is that's being started. I think that for better or for worse, there's no such thing as a shortcut. Even with the advent of AI and how it augments our capacity to do things and to be productive, I don't necessarily think that there's a shortcut. And we're in the midst now of launching a shiny new object, but launching more of a kind of a platform database that our analysts use day to day in order to do all the investor outreach.

Jeffrey Fidelman06:15We recognize that is a valuable asset in and of itself and that people would be interested in using it without an analyst being layered on top to offer support. And I look at that very much as a new business line. It's very much a new product. It's very much something new that we are currently building internally. So I think the main lesson that I learned that I'm implementing now versus when I started my first tech business over ten years ago was to crawl before you walk, to walk before you run. Meaning that even with all the fancy coding technologies out there, fundamentally, a business provides a product or a service.

Jeffrey Fidelman06:53And, initially, it's unwise to go under the auspices of if they build it, if I build it, they will come. And despite being in the business, despite knowing what I know, doing that would nonetheless put me in a position of making an assumption that I don't have any material information to to bench against. So even if launching a new service or if it's a new product, usually it supplies more to services, it's best practice to go test the market for that new service, even if it is provided in the most manual possible way.

Jeffrey Fidelman07:26Because at least you'll have an understanding of who's interested, how they're going to be using it, and maybe more importantly, how they're going to break it. So to answer your question, given what I have learned, how that maybe dictates the way that I would launch a new product or a new business, it's not necessarily that I would be so confident in my network or so confident in my ability to sell. It's quite the opposite. I would assume no network. I would assume no capability of selling, maybe some overlap with existing clientele, again, based on the product or service I'm launching, and then put something together in such a super manual way.

Jeffrey Fidelman08:02And now with platforms like Lovable or other AI coding prompts, you can get to an MVP or beta product very quickly with very little money to spend on it. So to be able to do that and then start putting it in front of potential customers just to show them what you're working on would be best practice or better practice than engaging with a development firm and spending a $250,000 or saying, hey. Here's a great plot of land in the middle of nowhere. I think I could build a shopping center there. And without doing any demographic search or traffic testing, you go ahead and buy it and start trying to get it zoned and built.

Jeffrey Fidelman08:52Brandon, you're on mute. Sorry.

Brandon Parker09:00Thank you. So, you're talking about using Lovable to make a quick website, quick MVP, or maybe Firebase or something like that to put together MVP and then put it out to the public. What type of feedback would you be looking for specifically? How many people might you try to get that out to? And what's the... Tactically, what's the actual testing look like where you're getting feedback that seems, okay. This is gonna work.

Jeffrey Fidelman09:26I'd put it out to maybe half a dozen people and not look for how they do use it, but for how they don't use it. Not look for what they love, but look for what they break. Because in in general, we all make assumptions about how things should be used and how people will interact with whatever platform you're putting together. And what's most important is, I guess, going into it knowing that it will break. So you want to get to a point of it breaking as quickly as possible so that you can see what broke along the way and what ultimately led to it breaking, adjust, fix that, and then redeploy it as quickly as possible.

Jeffrey Fidelman10:04If you're just looking for positive feedback, if you're just looking at feedback from users that why they love this product, what did you like about it, and don't know if that's necessarily the best feedback to get early on in your process. I also believe that whatever process or whatever it is that you're launching, again, it depends on the tool. So this is highly dependent on what you're building and what purpose you're building it for, but if you're building a management platform for your real estate portfolio that you wanted to have internally instead of using something else out there, then you're really looking at, am I getting all the data that I need to be getting in order to make informed decisions?

Jeffrey Fidelman10:41Number one. And number two is, are my renters, are my tenants, or whatever you're building it for, are they utilizing this system appropriately based on what I need from them and they need from me? And all of that can happen today without any technology by using phones and spreadsheets. And that's the way it should be implemented initially to understand what is the proper workflow of an individual making a maintenance request, of an individual who is moving in, moving out, trying to do new tenant documentation, whatever the case may be, whether it's for real estate or otherwise.

Jeffrey Fidelman11:16But having that process done in a manual fashion prior to actually putting technology behind it is incredibly important for feedback.

Brandon Parker11:25Yeah. I have a mental model that I have recently started using that I made up. It's just automate last because I find myself wanting to build systems and technology and make this thing so it's so smooth and easy and it can scale. You didn't even go through and figure out all the stuff that's going to break. And now I'm going through this complicated process of fixing technology when I could just be changing it in my head and in the spreadsheet, like what you're saying there. And I think that leads into the other part that's really interesting you're talking about is just the feedback loop.

Brandon Parker11:57How quick can you get something out there, iterate, change it? I think becomes more important today as technology speed increases. I think that feedback loop becomes one of the most important things that I can stay focused on is how quickly can we iterate. What do you think? What other things do you look at outside of that feedback loop when you're launching some sort of product? So the feedback loop, the starting manual and making sure you're hammering out the processes before you start backing up with technology.

Brandon Parker12:31What other ideas do you have around that?

Jeffrey Fidelman12:35Data. Data and collecting data is incredibly important. I look at innovation, or I think many people should look at innovation similar to scientific method in terms of experimentation. You have a hypothesis. You have a control and a variable. You run an experiment. You have a conclusion. Oftentimes, that conclusion does not support your hypothesis, but rather a version or a denominator of your hypothesis, and then you change your control and variable, and you run it again. And you change your control and variable, and you run it again.

Jeffrey Fidelman13:06And that is no different than an innovation cycle effectively. It just... You may be using different, more scientific terms. And when you are launching something new and when you are collecting feedback, what's really important is that you collect enough data to make an informed decision. And what that means is not getting one feedback that the color should be darker blue instead of lighter blue and you change your whole platform, but rather run it for sixty or ninety days. Whatever it is you're running, the marketing campaign, the new website, the new workflow, the new UX UI, whatever it is, give yourself enough time to reach out to a volume of people or walk them through or take them through that process and be able to collect data and feedback on it.

Jeffrey Fidelman13:53Because you don't necessarily want to be making all of these changes based on one opinion out of a 100 or even one of one. You want to be changing things on your platform, whether it's workflow or otherwise, if there is a significant majority that provides you with the same information or the same feedback or the same comments. But if it's one or two people out of a 100 people or out of a thousand people, then you look at those as outliers, as edge caches, and still focus in on what what needs to be done, but that becomes last on your list as opposed to priority where 60 out of a 100 people said that this button didn't work or there's a bug or my screen froze every time.

Jeffrey Fidelman14:33That is the feedback that you need to implement immediately. So give yourself time to collect the data and make an informed decision before, before making any feedback changes.

Brandon Parker14:46And there's a draw for entrepreneurs to do some of the fun part, like the branding and the go to market. And it's obviously that should be pushed back. When do you think that becomes more of a pivotal part of the brand? Cause at some point it's okay, we test it and now we want to start rolling it out to the public. When does it make sense to really dive into the brand and the marketing without just doing it? Cause it's fun.

Jeffrey Fidelman15:19For some, it might not ever make sense to do that. If you find yourself being a bottleneck in the project without appropriately being able to explain why, then you should take a step back. And for someone that, like for me, for example, I have no branding marketing background whatsoever. If I really feel strongly about one of our social media posts going out that I don't like, or color that I really don't like, I will make my opinion heard. But above and beyond that, I mean, there's other and more greater things that should be the focus points of a CEO than the shade of blue if it's an...

Jeffrey Fidelman15:59Undiscernible to the naked eye. And, again, I'm being a bit facetious. It... Of course, it always depends on the situation and everything else, but, like, I would say that especially super early stage company, you have a lot of leeway. I mean, look at major brands. I think in the past two or three years, you had almost every single major Fortune 100 brand change their logo. Not change the name, but change their logo in one way, shape, or another. So these things happen at Fortune 100 companies.

Jeffrey Fidelman16:30Don't think that you're building that much of a brand recognition, again, unless it's a CPG item or something along those lines, by launching a company that no one even knows about yet. But don't spend time on that type of thing yet. It's important to have a nice logo. It's important to be thoughtful about it. But if you think that you're coming into an investor's office and giving them a fifteen minute understanding of why the logo is a mermaid with a green background, then you've lost connection with what's important to investors.

Brandon Parker17:03When you start working with a new startup founder, what's the first thing to look at or diagnose in their business? Do you have a framework or set of questions to use to look at their health?

Jeffrey Fidelman17:17I'll often go into that prior to engagement with a client just so that we know what we're getting into. We understand where their business is, what we're going to be doing to help versus what they're going to be doing on their end and then what an engagement looks like. So I have these conversations quite often, with partners of ours or third party service providers of ours, website design or IT or other types of infrastructure. And I guess we do it differently. Like, we don't have a discovery time of... Timeline where we're charging our clients to get to know them better.

Jeffrey Fidelman17:49We typically just dive into work. And what work looks like for us... And and we keep it very simple. We're an investment bank. We help companies put together their investor materials, and then we'll help them reach out to and connect with investors. So on the investor material front, we'll always ask for some... Whatever materials they have up front so we can take some time to review it. We give them some notes on what needs to be changed and tell them, like, we can support you in making these revisions or create the new materials as needed, or here are notes.

Jeffrey Fidelman18:20You can go back and do it on your own and send it back over to us, and we can go back and forth with the interest of a potential engagement going in. I think if the question is what is the most common denominator behind entrepreneurs that successfully raise capital, it's often passion. And I understand even not saying that it is almost this unquantifiable metric that I'm speaking about, but there are oftentimes where you'll meet a founder who is super passionate about their project, understands it backwards and forwards, understands it from the perspective of selling and plus delta on on why they're entering the market, what competitive landscape looks like, why this is going to work.

Jeffrey Fidelman19:03And there are other founders and still founders of companies or cofounders of companies that kind of go through the motions, you can tell, and there isn't really that passion of, I'm going to make this work hell or high water. So I think that on the common denominator side in terms of, like, passion and what makes entrepreneurs successful when they're raising capital, passion, consistency is kind of the same thing that I mentioned even earlier in our conversation. So that's what I would love to see when having that conversation, But really understanding a company operationally, despite us not really doing operational consulting, is almost our entire first conversation when we meet with a client, potential clients even at that point.

Jeffrey Fidelman19:44How does your business work? You make the sale. Now walk me through what happens between that sale coming into your system to, like, full delivery of your product or service. And most entrepreneurs understand how that works, but it's incredibly interesting that not many people ask them to do that. And once they start going through that, I try to understand really how the business works. And that helps me in helping them either revise their investor materials or help them position how they should be putting this opportunity in front of investors.

Brandon Parker20:22And you've mentioned in some of your past interviews that you focus on narrative and fundamentals when preparing pitch decks. What are some of the narratives and fundamentals you see work? What are some of the biggest mistakes you see founders make when they're pitching to investors?

Jeffrey Fidelman20:41I will answer that backwards. So I think one of the biggest mistakes that I see many founders making when speaking with investors is not asking for money. And it might sound interesting when I say it that way, but you, the founder, are on a conversation or on a call with an investor. This is not because the investor wants a new friend in their life. This is because the investor understands that you are asking or you should be asking for money. This is an investment opportunity.

Jeffrey Fidelman21:12And I think a lot of founders, while being modest in one of the sayings that you... We were talking about earlier, sayings, modesty is a great policy except when you're raising capital. You are on the phone with an investor who knows that you're going to be asking them for money, so don't play around with it. Don't expect them to have a checkbook out and you're done. Here, I'll give you money. You have to ask them for. And that kind of brings me into the dichotomy of who you're actually speaking with. You are an entrepreneur.

Jeffrey Fidelman21:43You're doing whatever you're doing. Perhaps there's altruism behind it. But fundamentally or practically speaking, you're doing whatever you're doing to make money. Maybe there's, like I said, there's an impact that you're making in all these other bits and pieces, but ultimately, you're doing what you're doing in order to make money. If you could not make money from what you are doing, even eventually, and see a path to that, then, you know, unless you have other means of survival, you're probably not doing whatever you're doing. The same exact thing goes for an investor, and a lot of founders fail to recognize that investors are working in a job.

Jeffrey Fidelman22:20And even if it's an angel investor who has their own money and they're taking these calls and they're a professional angel investor, it's still a job, a job defined by, I do what I do in order to derive an income in order to make money. So an investor, when you're speaking with them, it is their job to speak with entrepreneurs who are looking for money. It is their job to ultimately allocate and deploy money. That is how they get paid, by investing money. Now they're risk managers, so they're not just gonna be throwing money at the wall to see what sticks, to use kind of an analogy there, but they're meant to say no.

Jeffrey Fidelman22:57They really need to believe in a company. They really want to invest in a company that makes money for them so they can make money. But it's incredibly important for entrepreneurs to recognize that when they are speaking with an investor, the investor is there because it is their job to be there. You are there because it is your job to be there. You are both doing your jobs when you're meeting with one another. So with that and talking about mistakes and asking for money... And, again, not not to make this all about money, but we're talking about fundraising here, and it is about money.

Jeffrey Fidelman23:31The number one goal that you should have, you, the entrepreneur, should have when you're presenting to an audience of investors or an investor is that investor needs to walk away with a very clear, concise understanding of how he or she is going to make money by investing money in your business. If I'm an investor and I walk out of an... Of a pitch meeting, of a first pitch meeting with a very clear picture understanding of how I'm going to make money, you have won a significant portion of the battle as an entrepreneur.

Brandon Parker24:05My mentor said something that always stuck with me. He said, Brandon, I like you, but we're not friends. And you need to remember that in the in the business world, like in an end, basically putting what you said in a real concise way that we're all doing business to make money and we can have great business relationships, but don't get it twisted with this idea that we're just here being buddies because we love hanging out with each other. We're trying to make money and because I'm friendly that has always stuck with me.

Brandon Parker24:37I can keep that in mind. So I like that. So great call. I think that's a really common thing that people doesn't seem like it'd be people would struggle with that, but I think it's a really common thing that's obviously been seen a lot. How do you with early stage entrepreneurs? How do you talk to them about making smart financing decisions? For example, how much to raise taking investors versus bootstrapping, using debt versus equity financing. How do you think about that at a high level?

Jeffrey Fidelman25:10High level is that you should not raise as much as you possibly can or want to, maybe even is a better way to say it. And the reason I say that is is a few fold. The approach should be you build a financial model. Your first pass at that model should be, let's assume we have unlimited money. How do we spend this money and deploy it? Your second pass at this model should be, okay, let's take reality into the picture. And how do we actually deploy this blank check quote unquote of money?

Jeffrey Fidelman25:42What I mean by that is if you're building a product and you need to hire a 100 engineers, there's no possible way you can do that in a month or two. It's just... It is not possible. And I said on another podcast once, the only way it's possible is to stuff cash into Lamborghinis and light them on fire. And that's how quickly... That's the speed of which you need to spend a billion dollars in a year. Right? So keep in mind that when you're thinking about building a model and you're thinking about deploying capital and raising and then deploying that capital, make sure that your model takes into account a realistic headcount growth, a realistic rent, a realistic growth of third party spending, whether it's Amazon AWS or Supabase or whatever the case may be.

Jeffrey Fidelman26:24So after going through that methodology, you have a model that has relatively accurate numbers of, let's say, at the very least, what you're planning to spend. Revenue being depending on your stage and closeness to generating revenue, that can be adjusted appropriately. You typically want to raise capital for about eighteen to twenty four months worth of operating expenses. If you have current revenue or if you're projecting current revenue, depending on how far you are along with the product, you discount that revenue 50 to a 100.

Jeffrey Fidelman27:01If it's a brand new company pre product, then you probably discount it a 100%. If you're already generating revenue and your projections are to quintuple that revenue or grow it by 10 x, then you probably discount it by thirty, forty, 50% because you know you have revenue and there's some there. And what is at the end? The net number is the amount of money you should raise. So eighteen to twenty four months assuming either some or none of revenue. And that's how you get to this is the number that we need to go out and raise for.

Jeffrey Fidelman27:32That also allows investors to take a look at the number and say, okay. You know what? This is enough money for x y z entrepreneur to raise so that they can test out their theory of their business model and still have time left over that if it does not work out, they have the ability to pivot. And that's important because if it does not work out, and an early stage company as often is the case, you don't want your entrepreneur, the person you invested in or the entrepreneurs that you invested in, to all of a sudden wake up one morning and say, oh my gosh, we have no money.

Jeffrey Fidelman28:05We need to do something quickly. Otherwise, this thing is gonna blow up. And when people act out of emotion, when people act out of a fear in that way, it's even more often the case where you make a mistake, where you make a decision that you... A fear based decision as opposed to an intellectually minded and thought out decision. So that's how you think about how much money to raise. In terms of how much to give up, depends on valuation. It depends on business. I'd say general rule of thumb is that all early rounds combined into one around seed is about 20% of equity.

Jeffrey Fidelman28:40All second rounds around series a, and there's kind of bridge rounds plus minus around it. But if you just kind of made the average, series a also takes out about 20% of equity. That's diluted after the first 20% was given up.

Brandon Parker28:57And how often do you see teams that bootstrap versus getting funding? That decision... Your company's at a 100,000 a month, and they're looking to scale to a million a month. How do you look at teams making the decision of whether to take money or just move a little bit slower and try to do it themselves?

Jeffrey Fidelman29:23It's... If what you just said is a key point, move slower. If it is not for development, then money should be for speed. Meaning, again, depending on the stage you're raising for and where your product is, assuming you have a product that's generating a $100,000 a month in revenue and you wanna grow it, I guess I would also make the assumption in this hypothetical that there's some sort of marketing engine going on that maybe grows with economies of scale or rather has economies of scale as it grows and becomes more effective in terms of converting dollars into clients, that's really when you can go to an investor and say, look.

Jeffrey Fidelman30:04For every dollar you put in me, I get back $3 because I've figured it out. I figured out demand generation. We have a product. It works. It's scalable, and now we just need money to fuel the fire. That typically I would put into series a category, again, or around series a as it's called now, and that really is take the money so you can grow further and faster. The calculation on that is relatively straightforward. I wouldn't call it simple, but straightforward in that, again, depending on how much money you're bringing in and for how much equity.

Jeffrey Fidelman30:37If I don't bring that in, how fast can I grow in a year, and what is my valuation at the end of that year? If I do bring that in, how fast can I grow in that same period of time, and what am I assuming, given all the exact same constants, my new valuation to be at that point in time? And if the new valuation after a million dollar investment is $32,000,000 more than it would have been if you just bootstrapped it or seed strapped it, then, yes, take the money. Because the increase in valuation that money just gave you, even though you diluted yourself by whatever that money had bought in consideration for your company, you're still increasing your valuation exponentially more than you would have if you had just sat on it yourself.

Brandon Parker31:22Good answer. Just do the math.

Jeffrey Fidelman31:24I like that. Yeah. In other words, do the math. One

Brandon Parker31:29really interesting thing you're doing is you're launching a fund to invest only in companies that you've already advised. Why'd you choose that approach and what kind of edge does that give you?

Jeffrey Fidelman31:42So we've been working on this concept for quite some time. We're still mulling over when the launch is going to be. Right now is probably not the best time to to launch a fund into this environment. But the idea is that we work with a numb... A lot of companies annually, close to a 100, plus or minus. And in working with them, especially in going through their fundraising presentations, we really get to know the management team quite well, whether it's on a private corporate side or on a fund side, like an emerging manager or a fund manager.

Jeffrey Fidelman32:15And I don't know if it necessarily will give us an edge around multiples, but it gives us the ability to invest in companies that were not originating proactively for a fund, but rather working with them hand in hand, often cases to design and develop the narrative of their business so we have a very good understanding of what they're doing, how they're doing it, what they're planning to do, how they're planning to use the money because we're oftentimes helping them build a model in the first place. So our working with a client is effectively our diligence in allocating funds out of that fund.

Jeffrey Fidelman32:48Now, again, that fund, just for everyone listening, is still a ways off, so we're still mulling it around and putting it together. But if all goes well with a few other, with a few other bits and pieces that we're launching, we should have that at least starting to fundraise into the end of the year.

Brandon Parker33:08So you have a foot both in tech startup world and in the real estate world, our listeners are land investors, a lot of entrepreneurs around real estate. What startup principles or tech trends do you, are you paying attention to as far as real estate goes?

Jeffrey Fidelman33:34AI and Web three. And AI has two implications on real estate, especially if we're talking to land buyers, land bankers, horizontal developers. I mean, it's it's applicable everywhere, but let's just say that and that alone. From a review perspective, you know, something that they teach in real estate one zero one is how do you figure out if a real estate is a good investment, the type of asset. It's... Is it being used in its highest and best use?

Jeffrey Fidelman34:05Number one. Right? Is this property good for multifamily? Is it good for office? Is it good for a strip mall? Is it good for a data center? So analyzing and underwriting, I think, has moved leagues ahead now, both with the availability of public information through an increased amount of data collection, and now AI can take these large sets of data and analyze them and properly underwrite certain types of real estate for real estate investors.

Jeffrey Fidelman34:36And, again, on land side, it's probably a lot more straightforward in terms of highest and best use for this land based on maybe permits being pulled or contracts or different types of zoning regulations in this certain area, and what is the propensity for them to change? All of this can now be modeled out. Or rather, it was modeled out. It should just be more quickly modeled out now with higher accuracy and greater amount of datasets. But in that same vein, there's an incredible investment going into data centers now, and that's where both AI and Web three point overlap, whether it's crypto mining or AI data centers just for pure computing processing power.

Jeffrey Fidelman35:15And I think that along with what went through COVID and boom of suburban towns and now coming back into urban centers because everyone's replying work from home, you have a very interesting dynamic where where, yes, there are always cycles in real estate. I think this is just one that we have not seen before, not to say we won't see it again, where industrial has picked up incredibly. You have data centers. You have pickleball courts that are now going into these giant warehouses as well, and you're finding a lot of changes, change change in use despite it being industrial.

Jeffrey Fidelman35:51You have a lot more technology in industrial warehouses and centers as well where you have all these robots, like in an Amazon center pickpacking and moving boxes. You had a lot of commercial being converted to multifamily, especially in suburban areas and also urban areas. Like New York City, there were a ton of buildings that were And the need for office has also kind of gone through an interesting roller coaster for lack of better terms because you had... Like, a suburban office was gold because everybody was working from home, got tired of it, wanted to get an office in the town that they were in.

Jeffrey Fidelman36:23And now it seems like a lot of larger offices are signing... Or a lot of larger brand name firms, and I'm talking about New York City just as a... As my reference point since I'm close, have been signing a lot higher, greater volume space leases at different types of at different types of properties. Properties. So how is technology affecting real estate? I think that it is affecting it in a lot of different ways, from underwriting and the ability to actually purchase different types of properties for different types of people that are... Have niche focuses to developing, whether it's data centers, whether it is office buildings, or even strip centers, I think has changed a lot in the past couple of years, especially with the advent of technology.

Brandon Parker37:09In land specifically, there seems to be with technology, it seems to be getting more competitive, more professional. And the winners it's almost more of a winners take all as things develop. Do you see that happening in real estate in general, the teams that are ahead on, maybe they're using AI for underwriting, they can underwrite faster and maybe they can find highest and best use across the entire county for all the parcels that are available type thing.

Brandon Parker37:39Do you see the teams pulling ahead from others in it centralizing a little bit because of the technology?

Jeffrey Fidelman37:47Maybe short term, yes. Mid long term, probably not. Either everyone's going to accept and acknowledge it, or you have the real estate owners who are getting into their geriatric ages that just have been doing it a certain way their whole lives. They're not gonna change, and they don't need to change because they have so much already under management. So I think this, if anything, gives an edge to new entrants participants in terms of how they're underwriting and speed to move. But the speed to move is still reliant on available cash because you can spend a week or a day underwriting a project.

Jeffrey Fidelman38:23If you don't have the money to buy it, it's kind of irrelevant how quickly it took you to do that.

Brandon Parker38:29Do you think that's the ultimate bottleneck in real estate in general always becomes cash because systems only take people so far?

Jeffrey Fidelman38:40Yes. Yes. I think that it's an... It's a... Maybe a necessary bottleneck at some points because you have a lot of people who want to invest in real estate, who want to use outside capital that should not be investing in real estate, that don't have good management track records, that aren't figuring out the highest and best use of land, but they saw a TikTok or a LinkedIn from an unnamed real estate mogul that told them, burn all your dollars, go take as much debt as possible, and you'll figure out the rest later.

Jeffrey Fidelman39:11And I I don't think that everybody should do that. I would challenge anyone to go manage a multifamily building with a half a dozen tenants and then come back and say, this is what I wanna do for the rest of my life. I've been there. I've done that, and I hated it. Personally hated it. I... One anecdote that I will paint the picture of a lot of them, and this is not for land. This is more for, like, multifamily, is that I get a call from a tenant in one of the properties we're managing, and she said that her oven door broke... Like, broke down, broke off.

Jeffrey Fidelman39:42And I was in the area the next day because we were selling the building. So I said, no problem. We have a super on-site, but I'm gonna come by personally and just check out what's going on. So I come into her apartment. It's an older woman. And sure enough, the oven door is broken down. And I'm like, what happened? Did you swing it open too hard? It's it's not an old oven. And she goes, no. When I stepped on the door to reach the cabinet above, the oven door broke off. And I'm standing looking at her bewildered, and she's standing looking at me bewildered saying that it's my... Obviously, it's my fault that the door broke off because it didn't support her weight.

Jeffrey Fidelman40:16That's the tip of the iceberg on some of the calls I got, and it's not easy to manage it. And what a lot of people then end up doing is giving it to a third party manager. It's gonna charge them seven, eight, 9% of rent roll, and there goes your there go your term. You can't manage it the right way yourself on a small, like, individual sponsor basis. Yes. Is the lack of capital in the market preventing more deals from getting done? Absolutely. But there is a reason... I mean, aside from politics and different type of market conditions, there's a reason that not every sponsor out there should be getting money for their project.

Brandon Parker40:55What do you think AI ends up doing with a lot of the software tools that are out there? For example, you mentioned it becoming easier to underwrite or pull data from the counties and things like that. And there's tools specifically that are out there analyzing highest and best use for a land parcel in a city. With the advance of AI, it feels like at some point you go type into Firebase, make me an app that analyzes the highest and best use.

Brandon Parker41:27Do you think there's a disruption to a lot of these startups who are using AI as the engine for some fancy tool that a year from now, people might just be able to type a prompt in and build that tool themselves?

Jeffrey Fidelman41:47Yes. I think that those tools already mostly exist. And I read a really interesting article the other day, and I don't remember the title, but I remember the chart that it showed. And the chart basically showed the amount that you use AI on one axis and the efficiency that it actually helps you on the second axis. And it's literally like a line that goes straight down across, which is like day one.

Jeffrey Fidelman42:20AI is amazing. I'm super productive. I can't believe I built this in four hours and it would have cost me a million dollars or $250,000 and months to do with the development for this is amazing. And slowly over the course of the next couple of days or the next couple of weeks, as you use it more and more, and as you try to get to the last ending point of a project, all of a sudden, AI becomes less and less useful because it requires more and more technical knowledge to actually connect all the bits and pieces on the back end or APIs or authentications or anything like that.

Jeffrey Fidelman42:52I think we are already there at a point where more or less you can get a product built and launched on your own or at the very least an MVP on your own with very little or no technical knowledge. Does that disrupt other technologies out there, other platforms out there? Not the biggest ones yet or initially, maybe not ever because there'll be a capitulation in the market and series of rollups. But I do think if you look at that middle market, yes, there are a lot of tools that can be built and launched very quickly.

Jeffrey Fidelman43:24And that's why more so it's important to have proprietary knowledge, proprietary data, proprietary process rather than a proprietary workflow or a proprietary product, because whatever product you have, I mean, there's a platform now where you can literally upload the website of an app and it will copy it for you. It will literally rewrite the code and deliver it to you on a code and on a website basis. So to that end, you know, what's important is to protect your IP, whatever that is.

Jeffrey Fidelman43:58If it's an individual, it's your knowledge, it's your network, it's all of these things. Looking at it from the perspective of SaaS is changing its definition. Software as a service is really dying. But why the why the SaaS letters remain the same is because the next version of that is service as a software, meaning these... The... Meaning I buy something, service... Software as a service is I buy a software, and I need to put a significant amount of input into this tool to...

Jeffrey Fidelman44:30In order to continue using it. Service as a software is an agent where I prompt, I put in some information, and then it does everything else for me, whether on a repetitive basis or on a one off basis. So I think the business is... The the definition is going to change over these next couple of months or this next couple of years to really reflect more service as a software type of type of offering.

Brandon Parker44:56And do you look at that as service businesses that have imp or what would have been a SaaS product now is a done for you SaaS product almost, or is like now someone now someone with proprietary knowledge comes in, they build, they use all the tools for you and give you the output type of thing.

Jeffrey Fidelman45:17So that's why I said kind of short term and not so much midterm because short term, yes. Midterm, I think that there's still going to be a desire from people, not for every type of product or service, but for many to have someone, an expert there to help them through it. And, look, I mean, again, I... The best perspective I can provide is on things that we are doing as a company, And the product that we're launching is effectively a CRM connected to our database of investors that will provide the same workflow to our clients that our analysts go through to do all the outreach to investors.

Jeffrey Fidelman45:53So a customer can come to us, monthly fee for the platform, subscribe. We'll push them manually leads, but we'll still have biweekly calls with them. It'll be a platform where they can be their own banker, so to speak, there's an actual banker that's supporting them on the back end despite it not being on a full time basis. And this is for the whole reason why... Will we include AI into it? Absolutely. Eventually, we will and probably on a relatively quick basis. But will there always be an actual banker behind it so that they can talk to a banker who's done this type of deal before, who is looking at their sequences, who is looking and helping them pull investors who are most relevant to them?

Jeffrey Fidelman46:34Yes. Because that, I think that's where the value is of any business. It's not creating kind of a tool that can create automations that don't really work for you. And, it's a play... It's differently applicable to different types of things, so I'll say that.

Brandon Parker46:50Well, that is a fantastic, I think, place to kinda wrap up and leave people with some real interesting information.

Jeffrey Fidelman46:58That chiller thoughts there. Thank you, Jeff. One of the last questions I usually ask guests is,

Brandon Parker47:04and then I'll give you a chance if we skipped over anything to go back, is if you could put one message out onto social media, let's say on Twitter, a short message and everyone in the world would see it at once, What message would you send out to the world?

Jeffrey Fidelman47:22There are no shortcuts in raising capital. And I'll add on top... I mean, that could be the message, but that is the reality. If you're looking for a shortcut or a silver bullet or some sort of answer that you haven't found yet, it's because there is no answer. It is difficult. It takes consistency. It takes whatever you think you need and times that by three, and then go and put that effort in. But best practices are posted on Google or posted on ChatGPT or whatever else you use in between.

Jeffrey Fidelman47:57And that's why even I always say, we don't do anything proprietary. Database is proprietary, workflow or systems and processes, sure. But what we do is implement best practices for our clients on raising capital. Get a list. Call them. Email them. Put them on a monthly update newsletter. Go to conferences and events. See people in person, take them out and do dinners or lunches or coffees or whatever. All of these things are... It's nothing mind blowing that I'm saying right now on this podcast or proprietary or nothing that people can't find So that's why I say there's...

Jeffrey Fidelman48:33There is no shortcut in fundraising. Just do the best practices. We're here to help if anybody needs, but even if you don't need. We're... We are always telling people that if you do it the right way, it will get done. Or at the very least, you will know what the appetite is. You will know feedback on your product. You will know more than what you did by just buying a list of a thousand investors and slapping that out through a mail merge. That does not work and is not helpful.

Brandon Parker49:05Beautiful. How can people find you online and at what stage would you say people should reach out to you and find you online and talk to you? Sure. In terms of stage, we work with

Jeffrey Fidelman49:17early stage companies raising anything from a seed to a series B. So 1,000,000 up to about $2,030,000,000. We also work with a lot of managers, both emerging and established fund managers, that need our services. Those are in any quantities, 50,000,000 to $100,000,000 plus. And effectively, you can look at us as outsourced investment relations. We have access to PitchBook and Crunchbase, ZoomInfo, Fintrix, Frequent, and all of those. We've aggregated into a single CRM and then layer an analyst on top of that so that the analyst, Alex the analyst, can do all the outreach on behalf of you and your company.

Jeffrey Fidelman49:54Our website is fiddlemenco, fiddlemenco.com. My email is jeffrey@fiddlemanco.com, and I'd welcome anyone to reach out. Drop me a line, your pitch deck if you wanna review, and happy to chat chat further.

Brandon Parker50:11Alright. Wonderful to have you on the show today. Really interesting conversation, Jeff. Thanks for your time, and can't wait to talk to you in future.

Jeffrey Fidelman50:20Likewise. Thank you so much, Brandon. Show.