How to Fundraise as an Underrepresented Founder with Madeline Pratt

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Full Transcript:

Note: This is an original transcript–edited for sense, length, and clarity.  If you have any questions or concerns, please email our host, Doria Lavagnino, at doria@sheventurespodcast.com.

00:00

Doria Lavagnino:

00:02.79

Doria Lavagnino:

She built her career in business development and sales, and pivoted in 2018 to build her creative consultancy, Fearless Foundry, to help underrepresented founders with the building blocks of scaling a business through branding, marketing, business development, and I noticed with a special focus on helping them with finance through her online network, We Talk Money. She’s here today to talk about her pivot and how Fearless Foundry grew from an idea from her as a solopreneur to a small business. Madeline Pratt, welcome to SheVentures.

00:42.84

Madeline Pratt: 

Thank you so much for having me.

00:59.37

Doria:

Early in your career, you worked both for Fortune 500s, like Intuit, and fledgling — and I mean that in the sense of startup or smaller — companies. Where do you feel most comfortable or where did you as you were moving along your career?

01:10.70

Madeline:

I can’t say that I felt particularly comfortable until I started my own company honestly. I was always the youngest in the room. I was almost always the only female in the room because I was working in the world of tech and tech is a pretty male-dominated space, or was at the time that I was really having my heyday. But I do okay with discomfort. I learned a lot along the way working for rapidly scaling companies. Avalera was one of my first jobs in my corporate career, and that company went from 140 employees to almost 1,000 employees in the three years I was with them. That experience of watching something grow that quickly was really exhilarating and kind of over the top. 

Then I moved to Intuit, obviously a really established company, 8,000 employees at the time when I joined, around the globe. That was my first experience really working with fully global teams and that was very exciting, too. I struggled in that environment. There were a lot of processes in place. Companies of that size need guardrails but, at the same point, I was not one that was a big fan of having to ask 10 people only to get to the last, final person to have them say, “Oh if only you would come ask me two weeks ago I would have said yes.” The time it takes things to get done — campaigns, things like that — inside of a company of that nature is lengthy. But I think that where I shine is in startup mode. So the last company that I was a part of prior to starting my own company was an Australian startup coming to the United States for the first time. And I got a chance to be a part of so many amazing moments, really just accelerated my career and would not have been possible if that company hadn’t been this scrappy bootstrap startup just trying to do whatever they could to get known. I love startup mode, and I think that’s a lot of the reason why we work with so many early stage founders these days.

03:30.41

Doria:

That makes so much sense and it’s also given you, I would think, the arc of experience to when you start — and we’ll talk about your company today in a minute — that arc of experience of large company, small company, and everything in between and knowing how to meet new clients where they’re at depending on how they come to you.

03:53.60

Madeline:

Absolutely and even deeper than working for a variety of companies. My role was always in the realm of business development and so that’s, strategy, that’s partnership, that’s building relationships with other companies, ostensibly. And on top of that, a lot of my niche that I played in was in the accounting industry. Each one of those firms that I was touching had hundreds of clients that we were helping to support of all different sizes, all different industries. And so it gave me this really, really unique window into how business happens and also how all sorts of companies run in very different ways.

04:33.91

Doria:

The idea for Fearless Foundry, where did that come from? What was your “aha” moment?

04:48.20

Madeline:

I don’t know that there was an immediate “aha,” but it was just something that started keeping me up at night. And I joke that the universe puts me in the right place when a woman turns to me and says, “I’m thinking about starting my own business.” I was in this season of my life where I was pretty established in my corporate career. I had kind of peaked really early on. I was 27, I was a global business development director, I was traveling all over the world for business, and I had a lot of friends and even just new acquaintances start approaching me because they were women who were entering a season in their life where they really wanted something of their own, they wanted flexibility, they wanted a business that they could work around their family or their child care, what have you. They would approach me because they’d seen what I had done and they needed help, they needed to build a brand, they needed to build their first website, they needed business cards, they needed to figure out online booking tools and how all that puzzle would fit together. On the side I just started meeting with friends. I joke that I had a really, really good glam season because it just so happened that my three friends who were starting businesses were a hairstylist, an aesthetician, and a woman who was starting an eyelash extension business and so I was trading glam services for free consulting. It was so good.

06:14.90

Doria:

Nice, but you know what’s so cool about what you’re saying is that it gave you the opportunity to really see if there was a niche and because it was people that you knew you also didn’t have —  I’m sure there were pressures but it’s not that added pressure of, “Oh my gosh. It’s my first client. What if I totally mess this up?” So you were able to see what the need was and then go from there I would imagine.

06:47.11

Madeline:

Yeah, and the reason I think it was because when I was doing this I didn’t even consider it consulting. I’d never been a consultant before. I’m that kid who if I know the answer to the question I’m going to raise my hand. So if I could help, I would jump in. So I didn’t even consider it consulting at the time, and I did this for over two years before my business really started to become a thing. What I started to notice was this persistent pattern where women were not being given the same level of support and opportunity to start and scale companies.

I heard story after story of a friend who was trying to build a salon or a space and would go into a bank and have their business plan in hand and just kind of get laughed out of the room, kind of a head pat from an older man who would say, “Oh cute idea, little girl,” and then send them on their way. So they were fighting to be able to build something of their own, and I could see the disadvantage both economically and just from a support perspective. They needed skills that they didn’t know and so that’s really where I think that seed for Fearless Foundry got started. There is a playing field out there in business; it is not level. I wish it was but we’re not there yet. How can I come in and use my skills, my tools, my resources to help level that playing field for founders?

08:15.93

Doria:

When you say underrepresented founders, in some of your messaging you talk about women but I wasn’t sure if it’s specifically women or is it any kind of underrepresented founder, women of color, different gender identities, that sort of thing?

08:36.30

Madeline:

It was interesting. So when I first kicked off, it was very female founded focused, that was my network, those were the people I knew. But we have really expanded our lens and part of that has been my own journey. I’ve been deep, for a number of years, in the world of activism and anti-racism and really since 2019 have just been learning a lot of stuff. I think anyone committed to that work that’s really what we’ve been up to.

I realize that yes I want to help women but there are so many other people who don’t have a seat at the table who don’t identify as women. So we work a lot with female founders, we work with a lot with women of color, we work a ton with the LGBT+ community. I personally identify as queer so that’s my community that I call in.

Then we also work with folks that have any other sort of disadvantage. We work with a lot of folks that we see as disruptors in their industry who maybe see something from a different angle or have a different led experience that make them aware of a problem that needs to be solved and have a unique skill set that they can bring to the table but maybe one that wasn’t being recognized if it weren’t for us coming behind them and helping them boost their brand and their marketing. 

09:52.46

Doria:

Can you give us an example? I’m intrigued.

10:02.30

Madeline:

Oh yeah, one of my favorite clients — and if you ever want to get to know her, check out our podcast because we have an amazing episode with her — her name is Caroline Hill. Caroline is the founder of 228 Accelerator. They call themselves equity designers and what they’re focused on is the realm of education. So Caroline was an administrator. She was a teacher. She is a woman of color who has worked in the education space for almost her entire career but she has an engineering background and so she thinks about things in systems and structures, and she reached this peak moment in her career as an educator and realized that so much of the school system was still broken and wasn’t serving kids equitably. She now has developed programs, trainings, online communities to go straight to the source, go to administrators, go to teachers and teach them you know important things like anti-racist work. Teach them about how they can be creating classrooms that are so accessible to everyone. And particularly during COVID, her work really blew up because there were so many people reevaluating the way that we did education, especially if it was going to be offered online. She was asking critical questions. We’re assuming that it’s safe for kids to learn online, we’re assuming they have access to the internet, we’re assuming that they have a parent who can support them, staying home all day, and pushing that conversation forward so that educators could be accommodating for all sorts of students.

11:26.65

Doria:

I love that, and what role did Fearless Foundry play with her?

11:30.63

Madeline:

We’re her retainer marketing team. So a lot of our clients approach us at a moment of either brand invention or reinvention. So they’ve got an idea or they have an established company and they’re ready to make a transformation. We do a lot of brand strategy work and then that typically rolls into the website. So Caroline approached us originally with an established brand but we boosted it up. So we did a little bit more brand strategy work. We did some reinvention of her website, we rewrote copy, we changed some pages around, and now we’re her retainer marketing team. So we do everything from produce her digital advertising to help her host events on platforms like Twitter Spaces. We help her craft her email newsletters, any sort of email communications. We edit her blogs that go into her site so that they’re SEO optimized. So a little bit of everything on the back end of her marketing based off of the strategies that we’re seeking to play out at a given time.

12:29.60

Doria:

There’s so much wisdom in that because marketing and social media are changing literally every minute and if you are a solopreneur trying to do that on your own you can post things and whatnot but it may not be very strategic because it’s not possible to build your business and know all of the different platforms — LinkedIn, TikTok, they’re totally different — and know how to use each of them in an effective way.

13:05.39

Madeline:

I joke with people, it’s like social media is the easiest thing for us to sell because nobody wants to do it but everybody feels obligated and so it’s this burden. Particularly with female founders, I’ve seen in the last year or two a real level of burnout around social media because we’ve lived through so much that it’s hard for us to feel like we can authentically show up even on our bad days, and I would just say to anybody struggling with that that’s actually what the world needs right now is to see your authenticity. So don’t feel shy to show up with your messy hair or whatever’s going on in your world. Honesty is needed. But the other thing about these platforms is I think the reason we have burnout is because we think that we have to be on all the platforms all the time, and there’s no way that’s sustainable. I just want to say full stop as somebody who runs teams like this. The only people I know who are able to keep up with five-plus social platforms and have content consistently coming out, they’re not running it. They’ve got teams like mine behind the scenes who are creating that content, scheduling that content. No human who’s also running a successful company can sustain that level of content, especially on their own. Unless that’s their full-time job, unless all they do is social media, like an influencer or something like that. 

But for us what we really focus on is what I call a “primary platform strategy.” So primary platform strategy means we really look at your ideal audience and we identify the primary platform that you really want to focus your energy on. So it’s like a “pick one” kind of moment. If you’re really trying to reach emerging business leaders who are CEOs and their scaling companies, LinkedIn might be the right place for you. Whereas if you’re trying to reach moms who are really busy and are trying to get a little bit of an outlet from their lives, Instagram might be a better place for you. What we do is we hone in on what that primary platform is and we shape a strategy from that platform first, then from there we add on other platforms as your ideal audience expands. But again we tailor those strategies around the humans you’re trying to reach on each platform as opposed to what I see quite commonly when people are trying to do it all themselves is just they’re reposting the same thing on six different platforms. It’s like having a megaphone and shouting into the void. It just doesn’t feel tailored. It doesn’t feel authentic. It ends up being overwhelming for a lot of people because they’re like, “I’m doing all this stuff. I’m posting all this stuff but I’m not getting feedback.” And the reason why is because it’s too homogeneous in the style of content.

15:55.63

Doria:

I love that, and I think another thing, if I can just tag onto that, is that I see a lot and I have made this mistake myself is posting but not interacting and then wondering why people don’t interact with you. Well, it’s a give and take. If you’re always — what is the word I’m looking for, you used “megaphone.” 

16:19.55

Madeline:

Just shouting. I always consider it unnecessary noise.

16:28.67

Doria:

Exactly if you’re always broadcasting out and just not listening and being like, “It’s my message, my message, my message,” why would anyone want to interact with that?

16:34.42

Madeline:

Totally, and again it’s called “social media.” You and I wouldn’t have a conversation where I would just sit here and talk down to you all day. That’s not how we have conversations with other humans. Ultimately, at the end of the day, people want to feel that there are people behind those posts, people behind those platforms. The primary metric of success these days — when social media started, people thought it was followers — but you and I could go on the internet right now and buy 100,000 followers no problem. Bot farms are common, you can get them all over, you just pay money, and you can get followers no problem. The metric that really matters these days is engagement. Just so people know: Average engagement for a big brand, let’s say like a PepsiCo. or somebody like that, like big brands they think they’re crushing it if they have 1 percent engagement. And smaller accounts, especially where you really take the time to comment back and engage with your following, have a conversation, ask them questions, comment back with them, those accounts can have sometimes up to 10 percent engagement, which is amazing in terms of what you can do with those platforms. It’s just a totally different landscape than the way it works for big brands.

17:57.99

Doria:

And I think that that’s changed the paradigm of how people are thinking about accounts. It’s not so much the size of the account. It’s really, as you said, how engaged.

18:10.27

Madeline:

And quality of content, too. For me, the influencer world I’m really glad to see us kind of declining on that and a lot of that world is getting really regulated now, too, and so it’s like you said at the top of this moment, it’s a really rapidly evolving space and it’s a lot for individual entrepreneurs to keep track of.

18:37.66

Doria:

Definitely and so I was thinking if I came to you as an entrepreneur and I said, “Madeline, I need help with X, Y, and/or Z, but I’m a new company. I don’t have a lot of money.” How do you work with those types of companies or do you work with them?

18:56.74

Madeline:

Yeah, we do. So we work with a lot of early stage founders and we have a couple different ways that we work with companies. So one thing that is really a part of our mission and ethos is giving back. I’m a big believer that, again, not everybody has the access to the same amount of resources and privilege that I have as a white woman who had a background in technology. Part of the reason I could start my company is because I had stockpiled cash from my career in tech, and I know that not everybody has that economic advantage. So if a company is coming to us with a huge mission and a huge heart but barely any budget, the first thing we look at is could this be a giveback or a partial giveback for our company. So we take on one giveback project a quarter and we have a pretty audacious goal this year to give away services to the tune of 10 percent of our company’s revenue. We’re on track to do about $1.5 million this year, which means we would give away $150,000 of services.

19:57.25

Doria:

Congrats.

20:04.82

Madeline:

Thank you. It’s been quite the growth trajectory over the past couple years. So that’s one way, and oftentimes that’s with a nonprofit organization, oftentimes it’s a queer organization or an organization owned by a founder of color. We’re giving back in those ways where we can, so that’s one option. The other option is we have this really important conversation where we say, “Okay, we want to give you the sun and the moon and the stars, but you’re not ready for all that yet, you couldn’t handle it,” and we can’t give everything for free. So let’s be honest about where the budget is at, and we do have a minimum retainer so project work we kind of flex a little bit but if you’re going to be a retainer client we have a minimum monthly retainer of $2,500 a month. And if you’re not ready for us, we always love to make referrals to other agencies that might be a better fit. But if you are, you know, we look at that budget number and we go, “Okay, what can we do in the next six months that can really be beneficial to boost your brand,” because my ultimate goal is to grow a client’s revenue because I should be the first bill for them to be like, “I’m so happy to pay you. You’re making me money.” And so our new clients typically sign a six-month contract that meets that minimum retainer, and from there we align a custom scope of services that are tailor made for the strategy we want to play out for them. We always say we start with strategy. We’re not a tactics-based agency. We define strategy and then we put forth the services and the execution to make that strategy come to life and we do that over six months. And then it’s very common, almost 70-plus percent of our clients, after that six months, renew for a year and increase their budget spend with us because they’ve been able to grow their revenue through the marketing work we’re doing.

21:49.15

Doria:

That is fantastic word-of-mouth advertising right there if so many clients are staying with you.

21:56.13

Madeline:

It’s one thing I’m really proud of coming out of the tech world where turn is so high. I’m really proud of the fact that we’ve been able to just grow with our clients. 

22:08.70

Doria:

How do the founders typically find you?

22:16.70

Madeline:

All sorts of ways. I’m pretty active on social media. So I have three new clients in my pipeline right now that all came from seeing a social media post for me. I also have a really amazing network of friends, business partners, and people I’ve worked with in the past. Being in business development means you’re a relationships person and so I have a lot of relationships that have led to referrals for our business. I would say so at least 60 percent of our revenue comes just directly from referrals from just our network or existing clients, which I always love those ones where clients pass our name on. Then a smattering from other places. We do a little bit of outbound. We’re pretty selective, we create what we call a “client wish list,” where our team members when they see a brand that they really love but they know that needs to be loved on a little bit they add it to a client wishlist and we do some outbound outreach to try and call in those companies to work with us.

23:13.30

Doria:

That’s great. It’s a great combination, and understandably since business development is your area you obviously feel very comfortable in that realm. I wanted to just go back one moment to venture capital founders. One of the things that I say in the intro of my show, and this stat is for tech founders but I’m sure it’s probably pretty similar across the board, is that 0.5 percent — so less than 1 percent — of venture capital goes to women of color tech founders and 2.2 or 2.3 percent goes to all women, generally. That’s paltry and frustrating, and I know that part of the issue is getting more and more women to angel invest and get us into positions where we can help each other. I wanted to hear your point of view on that and then from the side of the founders that you’re working on, is there anything that they could be doing differently that could improve their chances?

24:34.82

Madeline:

You’re trying to get me riled up. Anyone who knows me and anyone who follows me, this is my big mission in the world is to get more money in the hands of underrepresented founders. This is why I do what I do. In order to get investment, you have to have proof of concept and you have to show the fact that what you’re doing is working and that you have business development happening in order to get people to invest. So this is a big part of my “why” is to change those statistics. I will never forget, I think it was 2018 right when I started my company, a stat came out that Juul, the e-cigarette company, had raised more venture capital dollars in one year than all female founders in America combined and I was like, “Are you kidding me?” I was just so livid because I’m like, “That’s a product that’s detrimental, and yet we have women here starting companies that have so much potential to change the world and yet they can’t get the funding they need to grow.” 

I have a lot of opinions on this one, but I’m going to try and dial it in to three core things. First and foremost it is the fact that we don’t quite have access to the rooms, or we think we don’t have access to the rooms, where these kinds of conversations around money are happening. Oftentimes because we’ve been schooled by a capitalist patriarchy that tells us it’s not polite to talk about money. We shy away from having these conversations. I see so many women trying to scale businesses on a shoestring, or even worse showing up at my doorstep and saying, “I wish I could work with you but I don’t have any money to pay you,” and I’m like, “Then you’re not really running a business. Bless you, but the way that businesses run costs money, and you’ve got to figure out how to make it if you want to grow a really healthy business.” First and foremost is getting yourself into the spaces where conversations about money are happening, and the good news is these conversations are happening. I’ve got a community for it; there are dozens of other communities for it. There are Instagram accounts you can follow. There are platforms like Ellevest. There are all these places where money conversations are happening among women in particular. You have to just start being a part of those conversations. And, again, money is one of these esoteric things where we think we should know it but we were never taught it. So if you don’t know what a cap table is, if you don’t know what equity means, if you don’t know you know the difference between angel and venture capital, don’t feel bad about it just get into the right rooms where you can start to learn about the way money moves through companies so that you can start to make the right decisions. That’s a key thing for me: Just get in the rooms, ask the questions, don’t feel like you’re dumb for asking. If you weren’t taught it, how are you supposed to know these things? So that’s number one. Go for it. Yes.

27:21.40

Doria:

I just want to tag on for one second — now I’m getting fired up — and I totally agree with that. And also this ties into this being Financial Literacy Month and, women in particular, but all people, in high schools I think only 32 states — no sorry, it’s less than that — have a mandated financial literacy course and so it’s almost assumed that people just know. We just supposedly know how to parent, we know how to deal with money, no these are things that you have to be taught. To your second point, I really feel strongly about women learning because I think that many of us suffer from imposter syndrome and feeling like, “Oh if we don’t know something 110 percent, we really shouldn’t be doing it at all,” and I don’t want to make this a male/female generalization thing, but I have seen so many guys show up in rooms who just know very little of what they’re talking about but they’re so confident that they pull it off. Okay, please, you’re my guest. I shouldn’t be taking over.

28:26.43

Madeline:

You teed me up perfectly. So my second is once you’ve gotten in those rooms, practice having those conversations because the difference between women and men when they come and they ask for the money is confidence. It is the ability to say, “This is why I’m worth it. I’m building a big, badass company. You would be so lucky to invest in me.” The data shows that men pitch ideas, women pitch established companies. We get too much into the details. We don’t share enough of the big vision. We play small when we get in those rooms. We just want to show that it’s working. We don’t show its path to 10x and the thing is, if you’re an investor — I know, I am one of these — I want to get a return. I want my money to grow and I want it to grow at a rate that’s faster than my other investments in the general market, which means that you’ve got to give me a return that’s much better than 12 percent. 

If I’m going to invest, you’re not just selling me on what you’re doing today. You’ve got to sell me on what you’re going to do in the next five years and the pace of growth you’re going to have because, here’s the thing, and this is the dirty little secret that people don’t talk enough about when it comes to institutional investing, is that you if you sign on that dotted line and you take that money from a venture capital firm you are committing to getting your ass on a rocket ship and trying to go to the moon, and not everybody is up for that ride. Not everybody wants to do it. I didn’t take that money and I have many friends who have and I’ve watched them give up their bodies, delay having families, gain weight detrimental to their health because they have to perform at all costs to be able to keep raising money to keep growing their companies to create an exit that is attractive to their investors. That’s just one of the pieces that I really want to talk more about publicly because there’s very clear reasons why I didn’t take that kind of outside capital to start my company and we still grew 100 percent year over year for three years running. So there are ways to do it bootstrapped but, again, you have to know what you’re signing up for, so that’s just an asterisk I want to add there. 

Now the third thing, and this one is really important and ties into this asterisk that I’m mentioning, which is know what you’re getting into when it comes to the money. There are so many different ways to get money, particularly as an underrepresented founder. There are grants. There are community economic development funds. There are small business loans. There are lines of credit. There are predatory online banking options. There is good and bad money out there that has very different terms when it comes to interest, that has very different expectations when it comes to exiting. And you need to really understand the money that you’re bringing into your business and more importantly, why are you doing it. I took on a community economic development loan this past year of $100,000. That was the first time I had brought outside capital inside the company but I was doing it for a really strategic reason. My goal for this business was to grow it to a $10 million valuation within 10 years and that means that I have to have a company that’s producing at least $5 million in annual revenue. I love cash flow strategy and I have a background in business analytics so I built our projections for the next five years and then worked them backward to understand what I needed from a staffing and a capacity perspective to support a book of business that was $5 million plus. And I knew that I needed to make three strategic hires in revenue-generating areas to get us to that point. I took on that funding, which is great funding, community economic development are an amazing option that have grown really rapidly in this COVID era to help small businesses reevaluate and and prop themselves up and grow. I took on that funding to hire three people who I know will produce millions of dollars in revenue for my company and we’ll be able to pay that loan back in probably 50 percent of the time because of the fact that I’m using that money really strategically and very aware of why I got it and what kind of capital I’m working with.

32:59.15

Doria:

I love that and the other part of it that you made me think of when you were talking about venture capital and kind of giving over your life is that it could turn into a situation very easily where the whole reason why you wanted to work for yourself and do your own thing was exactly that, but once you take on venture capital, you are often working for someone else on their timetable, with their KPIs, and their rules. So to your point, it’s very important to know, and kudos to you for bootstrapping it for three years because that is not easy.

33:38.63

Madeline:

This is the other thing that I want more women to talk about is how hard that is. I have been inside bootstrap businesses before. So in my last corporate career, I took a company from zero to a couple million in revenue in three years, and it was amazing and it was a wild ride. So I’m very comfortable with that growth trajectory. I’ve done it before. But I did it on somebody else’s dollar and I look back and I’m like, “Oh my God,” am I allowed to swear? I was going to say the shit that they put up with, the shit that my bosses put up with because I didn’t know what it was like to pull the purse strings, and now it’s all my money and I’ll be honest I made more when I was a solopreneur. I make great money either way but I was not spending as much and now that I have a team of 12 soon to be 15 folks that work for me, I bear the the weight of cutting those paychecks, making sure payroll is there, when a major client stiffs us on a bill, I bear the the legal costs of fighting them to get paid. The cash flow is one of the most stressful things for a small business owner. It’s also the reason why most companies fail within the first three years, and it’s something that I’ve really had to work hard at as a founder. And I’m lucky to have a really great director of operations who does that work side by side with me. I’m also privileged in the fact that I — I joke that I play a CFO on Fridays, Fridays are my financial days, I do all of my reporting, I do all my KPIs. We huddle together and we go through our numbers and we look at the cash flow, we look at our pipeline, and we do all these things. But those were skills that, had I not learned them on the trading grounds of other companies with other people’s capital, I wouldn’t feel as confident as I do in my ability to grow a really successful, really profitable business.

35:49.63

Doria:

Absolutely and I love what you said about payroll because it’s so true. It could be large vendors, small vendors, they may have a net 90, and you have to pay people and you’re like, “Are you kidding? I need the damn check,” and you still have to figure it out because, at the end of the day, it’s not your employee’s or contractor’s responsibility to understand your cash flow issues. 

36:17.75

Madeline:

Yeah, I mean they sign up for job security, that’s not their problem, like that’s what they did when they signed their employment agreement. To just be really, really honest, I am a big believer that my company doesn’t exist without my team, which sometimes means I get paid last and that’s a really tough pill to swallow when you’re a founder who’s working as hard as you’ve ever worked and everybody else around you is getting paid except for you. But the way that I rationalize that is, one I’ve been very good with my money and was lucky enough to start investing at a pretty young age and so I have a cushion that most people don’t have. Should I need to go a couple months without a paycheck, I’ve got money in savings and money in my investments to cover that gap. Also, I have been able to grow in my equity. I have an asset that’s now valued at a couple billion dollars. To me, should I ever choose to exit my business, I’m going to reap a financial reward that far exceeds what anybody on my team would achieve because everyone on my team is offered equity after a certain portion of time, but I hold the biggest portion of the company. And because of that, in those moments where I’m not cutting myself a paycheck and everybody else is getting paid, I can sleep at night with the comfort of knowing that my equity is really worth something.

37:47.58

Doria:

Absolutely, it’s not liquid and it’s not immediate, but it’s definitely growing and it’s there. As a woman founder, how has that experience been for you?

37:51.45

Madeline:

It’s been an evolution. As a person, I’m deeply passionate about both business growth and personal growth. The biggest joy in my life has been building my company. I love my family, and it’s not a comparative thing, but really truly I know that my calling in the world is to build great companies, both my own and then helping other founders do the same. One of the things that’s very exciting for me, particularly in the season I’m in right now as a CEO, is I spend a lot of my time coaching other people, especially the first 10 years, maybe we’ll say five, I’ve been in the work of leadership development and coaching other founders and coaching their teams. 

Now that I have a team that we’re really in this — this is one of my favorite but it’s also a super difficult season — we’re in a season of adolescence where it’s like we’re not a little baby business anymore, we grew last year from five to 12, this year we’ll grow from 12 maybe all the way up to 25. As the company grows, you have to be different things to your team. I’m really stepping into a season of my CEO-ship where I’m very focused on bringing that coach energy internally and doing that leadership development work with my emerging leaders inside the company, and that evolution as a founder is really fun. It’s also something that takes a lot of work. My primary hats I wear are Chief Revenue Officer. I’m still very much the CRO inside of our company. I’m still very much the CMO inside of our company. I’m still the CFO but I’m getting to a point where I’m starting to take those hats off and starting to hire the people who are going to wear them in the future, and that’s really exciting but it also means that I have to be evolving. And I also have to recognize that ultimately my team works for me, but I work for my team. My company doesn’t exist without them. So 50 percent or more of my time is really working with my leaders inside the company to help them grow and that work is really, really deeply rewarding to me. So that’s been one of my favorite parts of being a founder is getting to do that work not in somebody else’s company but in my own.

40:17.69

Doria:

I don’t think I’ve ever had that answer, and I love that it speaks to the fact that you don’t end up with high churn, I would imagine, because people that work for you feel that they are being invested in your part of a mission.

40:33.44

Madeline:

That piece is really critical. If you read anything on our Fearless Foundry site, I hope you’ll walk away with this knowledge that I really tried to build the business I always wanted to be a part of. I didn’t set out to create a creative consultancy or a digital marketing agency. I set out to just consult and what happened was I started to have more work than I could handle and so I started reaching out to contract copywriters, contract designers to pull them in to support me with these projects and to create work for them as well. I saw a couple persistent problems. One was they were often undervaluing their work, so they were charging too little. They were often, this one really made me sick, working full time for another agency but side hustling to make ends meet because that agency wasn’t paying them well. Then they often, if they were a solopreneur, did not have the kind of benefits that you have if you’re working for an established entity and so for me, that all influenced me becoming the company that I am today, which supports a dozen staff members, which provides healthcare, which provides paid time off, which provides paid maternity leave, which does all these things that I wish I would have had inside of another company, not just for myself but for my team. That creates loyalty, for sure, in a really beautiful and organic way. But it also creates people who can see themselves growing long term with your company, which is the part I live for.

42:14.40

Doria:

Wow paid maternity leave because I have been led to believe that small businesses — and you’ve made it work — but that small businesses it’s too hard on them to offer a paid maternity leave because they’re making ends meet so how can they expect to do it? But you’re saying that there is a way if you’re judicious and strategic with how you grow and your money?

42:43.73

Madeline:

Yeah, the thing that I love — I’m going to tell a little story here — the thing that I love about the way paid maternity leave came to light was that I always require when somebody is in a hiring process with our company that they negotiate. I tell them this after their final interview, which is always with me. I say, “The next step in this process is we’re gonna make you an offer and part of our process is you’re required to negotiate with me and you can negotiate on any area in the offer or come up with an area that doesn’t exist but I need you to negotiate with me so that you can practice and learn that skill. I will give you candid feedback after the interview or after that negotiation to let you know where I think you could be stronger,” because women do not negotiate enough and that’s a really important skill that I want people to learn, so I require this as part of my offer process. 

One of my employees who’s been with me the longest, she got to this point and she came to the table and she said, “I noticed you don’t have a maternity leave policy,” and I was like, “You’re right.” I myself was very committed to being done having kids and anybody else we had hired to that point was done having kids or didn’t see it as part of their future and so we hadn’t built a policy yet. So she said, “I’d really like to see you guys propose a maternity leave policy because children are a part of my near future.” And I said, “Okay give us a moment. Let us figure this out.” We went to the internet, every policy we saw we thought was just atrocious. It was very obvious they were all created by men or people in HR who had never given birth to a human. It was all just like six weeks unpaid good luck. So we crafted a policy that we were confident we could pull off, which we offer four months fully paid, so 100 percent of your pay.

44:34.40

Doria:

That’s incredible!

44:35.21

Madeline:

Yeah, it’s a big freaking deal and it is not easy to pull off, let me be candid. I made the commitment and I said, “We’ll figure this out on the back end,” because this is what I would have wanted as a mother and it was not something that was offered to me. We then had to do a lot of diligence, and luckily about 30 percent of my team lives in Washington State and as fate would have it this employee ended up — she was thinking she’d have kids in a year or two and they started trying, they got pregnant on the first time. She ended up having a baby almost a year to the day of her signing her contract with us and luckily for us Washington State had implemented an FMLA policy that covered a portion, I think it covered about 50 percent, and then we were on the hook for another 50 percent of it. So that was a huge benefit to our business and actually allowed us to actually hire somebody to take on some of her role while she was gone. But it wasn’t easy. The policy was new. The state didn’t really have their stuff together, they kind of screwed it up. We had also bought a long-term disability policy, which is one tool that you can leverage as a small business. But you really have to talk with your insurance carrier and very, very much verify that they’re going to cover a significant portion. So we use that now for employees that are not in the state of Washington or not in a state that has an FMLA-type policy. Then for our employees in Washington we use that one and then what we do is we make up the difference out of our own coffers.

46:15.13

Doria:

That’s incredible and I did not know Washington State — is it for all companies regardless of size?

46:18.60

Madeline:

Yeah, regardless of size, and you pay into it as part of your tax process and then the state pays out. It’s offered that you can split it, as well, I believe. So I believe there’s an option regardless of the gender identities of your family, like if a new baby comes into your life you can use that, which I think is quite progressive. And I love that about my state that we’re leading the way, and I also think they have a long way to go. I think that there was a lot that we discovered in the process. It was not elegant. Let me just say this was a big learning experience for us. One of the other things we did, actually, that was really, really helpful is we have a client, she’s amazing, Kimberly Didrikson. She runs a company called Learning Motherhood, and all that they do is focus on helping employers and employees navigate the return-to-work process for mothers. So they’ve got online training content, they consult directly with organizations, and they have support groups from mothers. So we also worked with Kimberly and had her vet our policies a little bit further, helped us navigate, we offered a return-to-work program for that employee, and that also really taught us a lot and gave me the confidence that we can continue to offer this in a smoother way going forward.

47:35.59

Doria:

I just have to make sure that the world knows, as much as I can in my small little way, what you’re doing because it is incredible. And I’m sure there are other female-led companies that do it but it’s not easy, yet you are an example of someone who is doing it.

47:56.46

Madeline:

I’m a big believer in core values and part of the reason I left the world of tech was because I saw a lot of companies that couldn’t really live up to the values that they claimed to have and so I always say, “Core values are not for a wall or for a website,” unless you can show me them in action, I don’t really believe they exist. For me, I value the work of women but I also really believe that if a family is a part of your story, you should be able to make space for that. And so creating a workplace that’s flexible and allows for women to bring the whole of who they are to work is really, really important to me. We’ve been working really hard on living up to those values.

48:44.63

Doria:

It’s incredible, and then I’ll get off this topic because I’m getting so riled up. But number one: The United States has one of the shittiest family leave policies as a country out of everyone in the world. It’s incredible, I think that might be one worse than us, but it’s some very tiny developing country, which you would understand a little better, that’s number one. Number two is women perform so much unpaid labor and it’s just an expectation that we become unsung heroes and I have never met a woman who’s like, “Please don’t pay me for all the work that I do as a mother, as a caregiver, as a professional.” I’ve had this realization recently that the whole system of capitalism, of which I believe I’m in favor of, however, if it’s based on this notion that we have to exploit 50 percent of the population to make it work, well that’s fucked up.

49:51.80

Madeline:

There’s capitalism, and then there’s a capitalist patriarchy. So the capitalist patriarchy is what is the paradigm we’re currently still under. Patriarchy is a system where you know male presenting people are the people in power. We have a real imbalance here. This is why I believe that underrepresented founders need to start companies because, I’ll be honest, I don’t have confidence that we’re going to figure it out anytime soon at the governmental level. Little tweaks and policies will change. But it wasn’t until Netflix put into place paid maternity leave and they did six months and then they did a micro study, and in that micro study period they realized that it saved them over a billion — billion with a B — dollars to offer paid maternity leave because of the cost to fill roles from a recruiting standpoint, from a training standpoint, from a projects and jobs lost standpoint, if they had not offered it women would just not return to work because they needed that time and so it wasn’t until that data was released that companies started to go, “Oh wow this could be beneficial to us to actually support new moms.” 

But to me that kind of action is really important because I believe in business, we have the ability to build a testing ground, to build a Beta environment where we can showcase that these processes can be really beneficial to people and, quite frankly, to our bottom lines as businesses. That employee, she is a leader in my company now. She’s somebody who’s so grateful to work for us and she’s amazing and she deserved that time. She deserves to be both a mom and a leader. For me, the reason I really think that we have to invest in women and other underrepresented founders is because we can come to the table and build businesses with a different paradigm in mind that then starts to upend that capitalist patriarchy construct and make people see actually that system doesn’t really work for us, let’s go over here and build something better.

52:07.94

Doria:

I’m totally on board. So I know we’re getting close to the end of our time together. I wanted to ask you one last question because I feel like we could talk for hours on this and it needs to be talked about. What is one thing that you’ve aced, and I know you’re a very modest person but just have some swagger, and one thing that you would do differently as an entrepreneur?

52:35.40

Madeline:

One thing that I have aced — or this is a hard one for me because, like you said, I’m one of humility — but I would say that I kick ass at people. What I mean by that is I am a connector and I am a relationship builder. Part of the reason my company is so strong is because I invest in relationships. So whether that is the humans that I hire or the people that I say yes to as clients. We’ve screwed up here and there, we’ve lost clients, we’ve hired the wrong people but compared to other companies that have grown as fast as we have, we’ve done a really, really good job on the people part. Now tell me the second part again?

53:21.89

Doria:

What is one challenge that you’ve had or something that you wish you could have done differently knowing what you know now?

53:29.72

Madeline:

The one thing that I wish I would have done differently and advice that I give to early stage entrepreneurs is I would have built myself a different safety net. What I mean by that is when I started my company I walked away from a very sizable director-level salary in the world of tech and stepped into my company with $20,000 in my pocket. Based on what I had been making, I had less than two months of runway because I had a family that was used to my six- figure paycheck. As the primary breadwinner, I had to go out and build something that would produce revenue as fast as possible. And in many ways that was really beneficial for me because I think that sometimes people who don’t have the pressure of revenue creation create hobby businesses and side hustles instead of something that really can scale.

So I do think that pressure was beneficial, but I also wish I would have had a little bit bigger of a safety net so that in the season where things slowed down, and particularly during COVID our our sales pipeline you can literally correlate the ups and downs of it to COVID surges. In those seasons I think I would have slept a little bit better at night had I had a safety net. Also, just given my experience in tech, I shied away from outside capital for a really long time. I didn’t want to have the burden of taking on those dollars. It was not to my detriment, per se, but I could have done some different things had I had the comfort of a little bit more money in the bank because of the fact that we were spending and scaling so quickly. Now that I’ve worked with different institutional investment models and have a better handle on the kinds of money I want to bring into my company and what I can do with that money, I’m seeing us open up this amazing growth trajectory. It comes with a lot more ease, a lot more sustainability, and a lot less stress than the first couple years of the company.

55:33.92

Doria:

Well said and, at the same time, who was to know that there was going to be a black swan event like a pandemic, but I guess that that’s the point is to be prepared for anything. Two questions left. What is your long-term goal with Fearless Foundry?

55:51.99

Madeline:

To be clear, I have a couple companies and Fearless Foundry is my primary and my long-term goal has always been to create enough revenue that I can then give back, both in the form of services and in the form of capital to the underrepresented founders that I’m supporting. We’ve reached that point in the business, particularly on the services side, and now my goal is to be as profitable as possible without compromising on our core values in order to create a money machine that allows me to take that money and invest it where I think it really matters. So I am playing with some concepts around disrupting in the venture capital space and how we could take those dollars and really put our money where our mouth is and put it behind founders we really believe in and make a return that everybody wins. So I’ve got a long-term vision that I’m being very coy about around disrupting that institutional investment space in a way that I think works better for women. Part of my goal is to generate the revenue needed to self-fund that initiative.

57:06.43

Doria:

Is that going to be through We Talk Money, Fearless Foundry, or something else?

57:10.80

Madeline:

Great question. It’s a little up in the air right now but We Talk Money has definitely been my playground for this is how I connect with and get more underrepresented voices out there in the realm of finance. So I have a really strong network and part of the model we’re exploring is one part incubation, one part venture capital. Really putting businesses through a little bit more of a boot camp and drawing on my network where it’s like I know some of the best CFOs in the business, I know some of the best marketers in the business, I know some of the best strategists in the business, and putting these underrepresented founders through a moment where they have to really do the work in order to prove that they have something viable and then if they are able to get through that process, backing them with the seed round of funding.

57:58.96

Doria:

Love it. Where can listeners learn more about you and what you may be up to — I’m not asking a timeline — but in the future?

58:09.11

Madeline:

Clearly I do a lot of stuff on the internet so you can Google me or Fearless Foundry. Our website is fearlessfoundry.com. Our social media is all @FearlessFoundry. I’m all over all of the social media, it’s part of my job. I don’t really hang out on Facebook but Twitter, Instagram, LinkedIn those are my primary platforms and @MadelineKPratt is my handle.

58:38.52

Doria:

It has been really a pleasure speaking to you today. I feel like we’re kindred spirits.

58:44.19

Madeline:

Me too. Thank you so much for creating the space for the conversation.