Dylan Beynon: And so we sit down and they tell us, Hey, uh, just FYI, Fred's like skiing.
but he's going to dial in on the conference line
and so every so often my co founder and I would be like, so Fred, like, what do you think about that into the conference phone from like a dozen people, the firm. Oh, I wish silence,
Jason Yeh: Oh, God.
Jason Yeh: Just like with any skill, there are beginners and there are experts. Through practice and experience the experts become exceptional at. What they do.
In fundraising, there are also experts. You could call them the seasoned vets of venture capital. And he found her that's raised over four rounds of [00:01:00] venture capital from small angel rounds, all the way to series B and beyond likely knows a little bit about what they're. doing.
Today I get to share my conversation with one of those experts.
Dylan Bindin is a three-time founder. Who's raised over $60 million in his career. His most recent venture is mine bloom, a company that provides at-home psychedelic care that transforms mental health. A company, which he has raised over $50 million across three rounds for.
Jason Yeh: Dylan success with mine. Bloom is amazing, but his why is even better. But for now, I'll leave it to Dylan to share. Since his Y is deeply embedded. Within his childhood.
Dylan Beynon: So yeah, I think if you look at me, you'd think I probably look like one of those archetypical founders. Uh, I went to, uh, the Wharton School of Business undergrad, which is the top business school in the country on a full scholarship. It's actually the same scholarship that Elon Musk got when he went. Um, but [00:02:00] I came from a, I think, a little bit of a non traditional, uh, background.
So Mindbloom is a mental healthcare company, uh, that's built, that's the number one provider of psychedelic therapy in the US And a big reason I started it is because I both grew up in a family that was obliterated by the mental health crisis. And I grew up in a family that had a lot of trouble accessing care because of costs.
Both my mother and my sister were severely mentally ill. My mother was a schizophrenic and an addict, and my sister was schizophrenic and an addict. And for both of them, we tried a lot of traditional treatments. And ultimately none of them worked for them. My mother ended up spending 15 years homeless before dying of a fentanyl overdose.
My sister is the exact same. Um, My family, we, uh, we're working class. My father was a, uh, mailman and then a city bus driver. And so we were in the 70 percent of Americans who live paycheck to paycheck. Uh, fortunately we never had, uh, sort of an emergency that put us, you know, on the streets as, as a family.
[00:03:00] Um, but one accident away, uh, from, you know, being completely insolvent as a family. And so trying to navigate the mental health care field, both as like an uneducated family, I'm the first person in my family to go to college by a light year, um, but also as a family didn't have a lot of means to pay for mental health care treatments was very challenging.
and so as a, as a kid. Um, I think the thing that, uh, was maybe a little different and unique about me where I can draw that thread is I, I think everyone just thought I was very weird. Like, I, um, which is very, very, uh, call it scholastic, scholarly, I would go to the library and just come home and just devour book after book.
Uh, and so, you know, my, my father has this great story where he'd be like, yeah, I'd, when Dylan was a kid, I'd buy him these goosebump books and, you know, I'd buy him one.
And then the next day he, the next day he'd want another one. And it like blew his mind that I could read a book in a day. Uh, and so I'd read the same books over and over again and, [00:04:00] you know, like wipe out.
I actually thought that I was an introvert probably until college or maybe a little after college. I took a Myers Briggs personality test, uh, and it spit out that I'm an extreme extrovert, like 97th percentile plus on the extroverted scale. Uh, cause in my mind, an introvert was someone who enjoyed time by themselves and an extrovert was someone who enjoyed time being social.
Uh, and when I looked at my life growing up, I spent most of my time by myself, uh, but it was time bombarding myself with stimuli. Like. Books, you know, video games, uh, you know, anime, uh, building my own computer, playing computer games and, you know, fiddling around on my computer.
Um, and today my life is the same.
[00:05:00] [00:06:00] Yeah. I mean, that's very relevant to Mindbloom specifically. Um, so I think because I grew up in a very turbulent, chaotic, oftentimes violent home with a severely, immensely ill mother, um, I had a lot of great coping mechanisms. Uh, so I was valedictorian in my high school. Like near perfect SAT score, captain of academic decathlon, science Olympiad, football team, uh, slept probably five hours a night, which was like very hard charging, uh, for, you know, we'd call like, you know, material or surface level success and achievement.
Uh, so I'm going to go to a great college. I'm gonna, uh, you know, get a great job and I'm going to get, I'm going to get out, you know, get out of growing up. And I think what a lot of people would consider, uh, the ghetto. Um, When I was in college, I stumbled upon positive psychology, uh, where I went to college, University of Pennsylvania is, uh, one of the birthplaces of positive [00:07:00] psychology.
Um, I was already saying cognitive science and behavioral science and evolutionary biology as an interest. I'm mostly skipping classes to read books. God, me girls, which worked because I met my wife, who's our head of engineering here at MindBloom in college. And, uh, when I started learning about positive psychology, I had this epiphany where I realized that all of the things I was pursuing, all of my strategies and really the way I was approaching other people in the world, uh, were.
Evidence based, like scientifically shown to be bad strategies that were not going to work for me. And as I started to introspect more on not just like hitting goals and achieving, but on how happy I was and how I interacted with other people and my relationships, I started to realize that I had some really significant issues.
uh, through the study of positive psychology that ended up leading me to trying psychedelic medicine for the first time, uh, namely MDMA.[00:08:00] Uh, I was 20 years old at the time.
Um, and. Uh, and it was like, it was utterly transformational.
Uh, and so I, without a doubt would not be the, entrepreneur or leader or friend or, or, you know, husband that I am today, uh, if it wasn't for that first psychedelic medicine experience. And then a lot of subsequent work with psychedelic medicine, meditation, positive psychology, Eastern philosophy, uh, you know, a lot of other different routes,
Jason Yeh: Awesome. So, very cool to hear about this shift in perspective in the way you interface with the world. Um, I will try to bring stuff back to the, the topic that I focus on, which is fundraising and that the way you interface with the world, the way that you interface with investors is extremely important, right?
Reading you, understanding if this is somebody that they want to work with, that they want to trust with their money to build something big. Um, there is. There was something interesting in your history of companies that I wanted to spend a little bit of time on before we got specifically [00:09:00] into Mindbloom.
Um, which is, kind of when I look at it quickly, I think your first company was in politics, which you, you raised money for that one as well, right? And then, um, I think Mighty after that, which started in litigation, maybe LegalTech blended with FinTech far before people were even looking at LegalTech as something that was interesting far before, you know, uh, GPT 3 is making that an exciting space.
And then now Mindbloom, which is a very. Interesting and hot space, especially within the BC community, but I would say really only in the last two to three years. And so when you started Mindbloom and a highly regulated industry in a space that maybe only hippies were, you know, hippies were thinking about.
Um, and I put them all in a similar category of, of, of not down the middle, like very exciting spaces to invest in. Like it wasn't a, they weren't SaaS companies necessarily, maybe, maybe a little bit of Mighty. Um, they [00:10:00] weren't in industries that people had been indexing against over the last five years.
And so I wonder if at a high level, you could just chat about what it means To go try to raise capital, um, for industries or startups that seem to be left of center or maybe smaller than people, um, smaller in some people's eyes than they actually are.
Dylan Beynon: Oh, when I'm giving people fundraising advice, maybe this is downstream of working in, uh, you know, areas that aren't down the fairway, as I call it, which is Zprint as well. Um, but in my end of 10 rounds now that I've raised, um, or nine rounds that I've raised, um, I've seen this, this. Uh, line of regression, um, that makes me think maybe I have a little bit of a, uh, you know, non obvious secret that I believe about the fundraising process that others don't.
Um, and that's why I look at every single round that I've [00:11:00] raised. I've talked to so many investors, right? Uh, Angel, C, Series A, B, C, um, and, and credit investors as well. At Mighty, we raised several hundred million dollars of, uh, credit, essentially a, a hedge fund within the company to finance our customers.
Um, I pretty much knew that they were going to do the deal within 5 minutes or 10 minutes.
Jason Yeh: Say more.
Dylan Beynon: yeah. So, what I've observed is that it's not that I went to investors and then convinced them by showing them, you know, why this. Why now, why us, you know, here's the market opportunity. Here's our, here's our attraction.
Uh, you know, here's our growth plans. You know, here's the clear path to making this a multi billion dollar company over a reasonable time period. Um, you know, those things all get. Discussed and explained at length with a lot of due diligence. Uh, but within the first 5 or 10 minutes, I uncovered that they already wanted to invest [00:12:00] in something like this, if not this exact thing.
And then I just came along.
Uh, but I've just found that through all of the investors I've worked with or gone term sheets from pretty much all of them up front where like, I've been looking for this, or I've been looking for something just like this. Uh, and so I think they make an intuitive and emotional decision and then find the facts to backwards, fill it.
And of course the facts have to fit. The intuition and emotional decision on the other side, investors who haven't sort of been thinking or looking for this, but get their interest peaked and they say things like, this is so interesting. Like, wow, I'm so interested to learn more. I'm so curious. I rarely see get there.
So now what I do is I. Really look for people who get it up front. Uh, and I just don't waste time, but for me and for them with the people who I think don't get it up front, because I just never see people get there.
Jason Yeh: Yeah. I, I just want to chime in and say, um, for a lot of people that hear that, they might be [00:13:00] like, no, that's crazy. Right? Right. Right. Like. We're talking about millions of dollars and, you know, you don't think they have to analyze A, B, and C. And actually, you're 100 percent correct. Um, and I'm not sure that a lot of investors would admit it fully, but I do think they are extremely sort of grooved before the full pitch and diligence process to making a decision.
And, um, you're right. I think there's one component of it, which is Just their, either their predisposition to a space or the fact that they're done working it, they've been looking for the space, but there's also just the first impression or the way that they were introduced to you, Dylan, to be able to like, um, to have a perspective on you or to have an initial positive feeling because of the way they discovered your deal, the way you were introduced in there, that all feeds into this, this phenomenon that you're describing about, like that first five to 10 minutes is, can tell you so much about what's.
Going to happen. and then, you [00:14:00] know, kind of taking that back to my initial question. Um, I've been curious if, if that means to you, if, if what you were saying, and I had asked like, well, man, you're, you're working on these spaces that aren't down the middle. They're kind of left of center.
They're not everyone is looking for them. Are you kind of saying that it's, uh, it's a numbers game at this point? You know, you're like trying to. Yeah. Find the investor that thinks like you and maybe not many investors think like you, but once you find them, like you're going to be a great connection and great fit.
Is that putting words in your mouth or how would you
Dylan Beynon: right. Yeah, that's right. I, I mean, I don't, I do things through warm intros. because I do think that it's challenging to have that sort of credibility cloud if you, if you go in cold. Um, I think it has worked for some people I know. um, but I find, uh, that. My time is best spent at the top of the funnel meeting those people who are extremely, [00:15:00] they just get it right away.
Like, it's in the first 5 or 10 minutes. You understand they light up. They're excited. They're pulling the questions like they're pulling information out of you. And there's just this palpable, like, visceral, like, getting it ness, so it's hard to describe. And what I do is I cut off the process quickly if I don't see that.
No, I love that. Um, I think the, the other thing that unintentionally you're doing is like, You're sharing a great degree of confidence in your ability to run the company, to find other investors and that confidence and even the people that are actually interested in could get there. If they see you doing that, if they hear that that's your MO, it's like, when you see a founder that's confident in what they're doing in their, in their company, it's like, that's addictive.
Jason Yeh: That's like very enticing. And that's the kind of founder you want to back.
Dylan Beynon: but I, I do want to shift over to Mindbloom because I do find the space of psychedelics very interesting. I'm curious about what fundraising for that has [00:16:00] been like. and I want to, you know, do, I'm doing my research trying to figure out where we would start.
Jason Yeh: I know you raised around in 2021, there's some information on CrunchBase, um, but not a lot. Um, nothing was. So I don't know if you're comfortable talking about that or if, if, uh, if there's something that we need to dance around, but, um, if you could set the stage for us a little bit, then, then maybe we can have a little bit more of a, a substantive conversation about fundraising for Mindblow.
Dylan Beynon: Uh, so we've raised, I founded Mindbloom in late 2018. Uh, we raised our. Uh, Seed Round, which was 2 million, led by, uh, Long Journey Ventures. That's Lee Jacobs, Brian Balfour, and Sian Bannister. Um, and that was in 2019. Uh, then in 2020, we raised our Series A, uh, which was about 13 million from We had a few term sheets.
I brought in two investors to co lead. [00:17:00] Uh, so it was Founders Fund and APC, uh, Peter Tilla, Founders Fund led the deal along with, um, a couple of guys at APC, uh, who are in the healthcare group. Uh, and then we raised a 35 million series B, uh, in 2021, a year later, uh, led by Kleiner Perkins.
Jason Yeh: Oh, wow.
Dylan Beynon: Uh, so we've raised 50 million total.
Uh, we are, uh, by far and away, the best funded, uh, company in. Consumer psychedelics, uh, with by far the best investors, um, Founders Fund, HVC, and Claudia Perkins and a lot of other, uh, really incredible, um, operator angels who are, you know, founders and the biggest consumer. It's all medicine companies and healthcare companies and a bunch of other great funds, um, um, like, uh, left lane capital and, uh, quiet capital, um, and funders club.
Um, some of these investors I've worked with over multiple companies. Um, and we didn't, uh, we didn't announce.
I didn't announce our fundraising for a few different [00:18:00] reasons. Um, so initially I just didn't want anybody to know about the company. Uh, the company was really new. Uh, you know, we came up, we saw that a lot of, providers were doing at home ketamine therapy, which is an incredible.
Boone to patient access because when I started the company, ketamine therapy is like a thousand dollars a session, which my family would never have been able to afford. Um, but ketamine is actually really cheap. Uh, and so through telemedicine, we've been able to bring the cost down like 80 percent from the average provider and bring it to, Hundreds of millions of Americans who can now access it who didn't previously have access through telemedicine were in the 38 states reaching 86 percent of Americans whereas previously most people just were able to access some local clinic that was even hard to get to.
And so, uh, early on, Just didn't want people to know that we existed so that we could achieve escape velocity before we had, you know, a bunch of Y Combinator companies come out and copy us. Uh, uh, [00:19:00] later on as we, uh, started to, uh, take off as the number one national brand for, I mean, psychedelic therapy, um, decided that we actually just wanted the.
Narrative that we are telling in the press and in the public to be focused on Mindbloom, the healthcare company, and not Mindbloom, the venture backed tech company, to be really focused on the fact that we have been able to generate literally the best clinical outcomes for anxiety and depression of any treatment that's ever existed.
Mental health is the number one public health crisis. And, uh, we recently published the largest ever peer reviewed clinical study in ketamine or psychedelic therapy history. It's hanging up by the wall right here. Um, um, demonstrating that we're essentially a 10x better treatment in terms of efficacy, side effect profile, and speed to work for people.
in addition, you know, we're helping, uh, as I mentioned, millions and millions of patients get access, um, by getting educated better, better prices, and actually getting it conveniently, uh, delivered to their [00:20:00] home. Um, And so at that point, we said, that's really the story that we want to tell about the transformational outcomes of our patients and the transformational work that our psychiatrists and psychedelic coaches are doing, uh, and not how we're raising venture funding, how Peter Thiel's involved, uh, not about Dylan, the tech CEO doing a third company.
Raising $50 million in venture capital is no joke. And although a lot of people would count that as a huge success. For Dylan raising 50 million was just a vehicle to get to his true success story. Revolutionizing the way we treat mental health issues. When we come back, Dylan talks about his insights around when it is, and isn't valuable. To announce around.
Jason Yeh: [00:21:00] Before I, before I like tell you my own perspective on that, uh, I, I bet you, you've done both in your career, [00:22:00] right? For your other companies versus Mindblow in terms of announcing your fundraisers. What would your advice be to your, I don't know, your angel investments that close a seed round or a series A, like do you think it's valuable?
Dylan Beynon: depends a lot on the company. a company like Mindbloom, uh, PR is a critical part of our strategy because we are trying to propel ketamine and psychedelic therapy into the mainstream and shift public perception. Generally though, I'm pretty anti PR.
Um, so I think a lot of companies, um, often spin their wheels, trying to get PR, uh, when it doesn't have like a massive force multiplier, uh, for their business or their customers.
Oftentimes, getting a little bit of PR can be helpful for people. Uh, it's nice to get some of those logos. Uh, you know, the average person who is sort of maybe not in the know about how the PR engine works, uh, does attribute a lot of sort of social proof and authority. [00:23:00] An example is I was, um, I was recently at a Thanksgiving dinner, uh, with my wife, Allie, who's our head of engineering at Mindbloom, who I mentioned.
Her, uh, family and family friends in Williamsport, Pennsylvania. They have the Little League World Series out in the middle of nowhere. Uh, and we're at the dinner table and her family friend, they're all doctors, says, uh, Dylan, you, you finally made it. I was like, What do you mean, Glenn? He's a, he's a urologist and a surgeon.
I was like, what do you mean, Glenn? He's like, Oh, I saw your company was on the front page of the New York times. I was like, in my head, I'm like, I saw that story. And I was like, Oh, that's pretty cool. And they moved on to the next thing. Um, I was like, I promise you, Glenn, that's a list of a hundred things that we've accomplished over the last year.
Yeah. That's. Not even in the top 100. Yeah. Um, but for a lot of people, right. Seeing that, uh, does imbue a certain amount of, um, gravitas and authority, um, that I think is good for hiring. It does, I think, help investors, um, with, [00:24:00] with fundraising. I can potentially help with, you know, customers and, uh, can also help convert better on things like landing pages, et cetera.
Um, but I think it's almost like the, the curve flattens very quickly for people where for a little press, getting those logos, uh, being able to show those on your career and press pages, et cetera. Uh, there's some value. And after that it levels off. It also gets harder and harder to get press because you have.
What I call story market fit. So you have a variety of different stories that you can tell and a variety of different things that different journalists want to tell. Uh, and so I think a big part of the press game is matching story market fit, especially in things that you can repeat. Um, and so oftentimes a company might get story market fit for one story, think they can get press, but it turns out it's really hard to get more story market fit.
It's not a point in time, uh, and, uh, beat their heads against the wall.
Jason Yeh: One thing, I mean, I appreciated the fact that you aren't announcing. And I think the thing that I try to tell founders about that specific types of [00:25:00] type of PR, the announcement PR is especially for earlier stage companies, you know, I think it tends to mostly be about ego and wanting to be able to show some level of success.
I mean, this is funded, but I think we all know that fundraising isn't the end game and that isn't. A marker of success, but for a lot of first time founders, it is. And, um, the one, the one thing that I warn people against is like one, it's just, it's going to attract more competition than, than you want. And like, you want to kind of be heads down and building while people are unaware of how sexy this industry is.
And then there's another piece I always point to, which is especially pre product market fit. Um, when people announce a fundraise and it's like. You know, Mighty doing X finance for doctors or something like that. It can be really hard for a founder to be like, Oh God, I just told the world that I'm financed for doctors when really we [00:26:00] want to do it for litigation, peer to peer lending, we, now we need a pivot.
And I think it makes harder, it makes it harder for certain types of founders, especially first time founders to be agile with what they're doing and. iterate and test because they've announced it to the world that this is what they're going to do. So, I think for everyone, you gotta think about it as a tool and be intentional about it.
Um, and not just blindly go out and announce every round just because people think it's great for hiring or something like
Dylan Beynon: Today's also a very different environment. Uh, when I started working in tech, my first startup job was in 2011. Uh, and then I started my first company in 2012. Uh, the press was friendly to tech, right? They're writing a lot of positive. Generally positive stories that are inspirational about products and founders and companies doing really interesting things and, uh, why these companies getting funded was a positive thing as we're, you know, propelling the economy forward and building new [00:27:00] solutions and techno economic innovations to unmet user needs.
Uh, but today the situation is inverted. Uh, tech is generally hostile to, or sorry, the press is generally hostile, uh, not always, but. You know, uh, on average to founders, companies, um, and, and even tech products. And so if you don't have some understanding of how that game is played, uh, I think people can walk into landmines, you know, very early, um, and create potential negative press cycles before a company has sort of the brands and the clouds and like, you know, the product and the outcomes, uh, to defend themselves.
Jason Yeh: that. It's a, it's a great call out. It's kind of sucks to see, you know. being in tech and wanting to support that industry and seeing so many of the negative storylines going out there. Um, there's something that Mindbloom did that I [00:28:00] wanted to focus on and kind of get you to react to or give us color around and then even think about it as it extends into your future.
Um, but when you talked about your cadence of fundraising, um, it was, I'll mess up the numbers, but it was 2 million seed. A year later, uh, 6 million. A year later, you know, the 20 plus million dollar round. So that cadence was quite quick. There are probably a couple of things that went into that, but a lot of the things I like asking founders about is like, do you remember what the trigger point was, you know, in the beginning when you knew, like, when did you know this was going to be a venture backed?
Sometimes when it's your Series A or Series B, I'm like, where in the operations of the company where you're like, we need to go raise. And so instead of thinking about, you know, it's, now it's been a couple of years since your last raise, instead of thinking about any specific round, I wonder if you could [00:29:00] take that concept and tell me where this Rapid cadence came from, uh, I have some guesses given, you know, when in the market you were raising and other things.
But, um, to share a little bit about that, I think would be extremely helpful.
Dylan Beynon: Such a good question, Jason. Um, yeah, so I raised our 2 million seed round in 2019, right before we launched. Essentially, I raised the money before I did anything. Um, um, and so I was. I had spurned about 1 million of that 2 million by the time that we had launched a psychedelic medicine clinic in Manhattan.
I had treated people both in person and then remotely, which was always the long term plan. COVID helped us accelerate going fully remote probably by about a year or 2. And so that, that timeline just made sense. [00:30:00] We had, we had, you know, validated building out our medical and clinical team, validated like we can do ketamine therapy and at home ketamine therapy, had great early clinical outcomes, um, you know, distribution channels that were working, uh, and, and, and that was sort of an easy story, uh, and time to do it.
Jason Yeh: So you still had half of your initial capital when you went out to raise.
Dylan Beynon: Yes, yeah. I mean, at the time, essentially, um, we were able to move to fully remote because of the public health emergency during COVID. The company immediately took off and I immediately went to race. So it was a very clear, there was already a, like, why this around ketamine therapy and psychedelic therapy for the huge mental health crisis that's getting worse every day.
Why now? Because of regulatory changes and ketamine becoming available and MDMA and psilocybin about to become available for people. Uh, and then, you know, a YS, um, in terms of, you know, my background, building some other companies, having a lot of other telemedicine founders around the [00:31:00] table and, uh, you know, personally having my life transformed by psychedelics and, and sort of being deep into
Jason Yeh: So seed, so trigger point for seed makes sense. You wanted to raise, you were a credible founder, you found the right people. So, and you knew like, look, this is a telehealth, this is a regulated telehealth company. going to take capital. Like I'm not going to bootstrap this. Seed to A was momentum and acceleration, right place, right time, like everything was happening, but you raised it again a year later, you know, and I'm,
Dylan Beynon: when I raised, so, so the, you'll find the AA interesting. So the AA ended up being 13 total. And I had several term sheets actually took the worst offer on the table to work with the investors. I wanted to work with most. Um, and I think they would probably appreciate if I, if they heard me say this, I was told to work with Peter until you have to pay the Peter Thiel price.
And I said, I was like, great. So I'm going to, here's what I'm going to do. I'm going to pay the Peter Thiel price, but I'm going to raise less money than I want to raise. [00:32:00] And then I'm going to immediately open up a safe. at 2X the valuation because now we have better investors and I know other investors who are going to be less price sensitive.
So the A was, I believe, 8. 8.5 million. And then I immediately raised another like 4.5 million over the next couple of months from people who already wanted to invest, but at a higher valuation. Um, and so. you know, that's actually an interesting probably strategy, you know, that the audience would be interested in
Jason Yeh: I think just to call this out, like it happened to be at a, um, by the way, that's my mental health check in alarm says, how it says, how are you feeling?
Dylan Beynon: how are you feeling
Jason Yeh: I'm feeling great, man. This is a, this is a great conversation in a space that I, I really love. I was going to say, I, I want to call it out that there.
When you are able to do things like that, like manipulate the fundraising market and manipulate, manipulate is a strong word, but like sort of push the processes in the way that you would influence them. it, [00:33:00] it happens because there is demand, right? Like no one has the leverage to do this, um, without demand, without actual demand there.
And I think, one, you had a very interesting company and two, this was like. The height of the market, right? And this is when stacking safes was, was very, very commonplace. Um, not just. around and then one safe, but like three safes in a row in order to get to the maximum, uh, valuation that the market would bear.
Uh, it gets harder to do that when, you know, in like more bearish fundraising markets, but I, I mean, I love exactly, I mean, that's what I would have done too. And I think decoupling your, your preferred, uh, expensive investor with just capital, I think was, was brilliant. So,
Dylan Beynon: Yeah. It's, it has to be dicey, right? Like I had, uh, people who said, Hey, I want to get in so badly. If you let me in. I'll take an even higher post money cap on the safe. Uh, but [00:34:00] I didn't want to do that because I didn't want to risk being underwater at the next round if the value at the price round valuation came out lower than the safe cap, which I think a lot of people are experiencing right now.
Jason Yeh: 100%. So, so 13 total across like sort of a tranched raise. Um, but then a year later. So tell us a little bit about that trigger point.
Dylan Beynon: So a year later when we got to the B, I actually only burned 2 or 3 million of the 15 total we had raised. Uh, so we had everything in the bank, the business was exploding. Um, and... When I went out to raise a lot of investors, like, why, why are you raising? You you're breakeven. You can't even keep up with the business right now.
You have nearly all the capital that you've raised to date Uh, why don't you just wait another year or two and come back and raise it away, higher valuation. I, I didn't even sugarcoat it. I just told people the truth, which is [00:35:00] one. The market is wild right now, and I know that there is demand and I'd be kicking myself if a year or two from now, exactly what happened happened.
The market implodes, the capital markets dry up and, um, it's much more challenging to raise capital. Two, uh, is we had a lot of momentum on our side. Uh, we had had, when I started Mindbloom. Everybody, including all my friends who've done telemedicine companies said you are going to have state medical boards and the DEA and the FDA, like banging down your door right away.
Um, you're, you'll probably be able to get through them, but you are going to have like regulatory inquiries that you're going to need to deal with. Because what we're doing is good medicine and legal medicine. But people are going to be asking a lot of questions. Um, Um, also MDMA assisted therapy is going through clinical trials, solicitment assisted therapy is going through clinical trials and all of those just continue to hit their milestones.
And so at that point in time, we actually had no meaningful regulatory inquiries into the [00:36:00] business. Uh, everything was going our way in terms of our business and tailwinds. Um, uh, these other medicines were looking better and better with more and more sort of market excitement and hype every single day.
Uh, and so I just saw that there was a hole open. I played football for 12 years and I played running back and you play running back in the hole opens, you hit the hole, you know, dance around it. And so I saw that the hole was open and we needed to sort of hit the hole while we could, um, because who knows what was going to happen tomorrow.
And I think it was like four months later, this was, you know, summer of 2021. It's like, I think, I think three or six months later, I was like, maybe I should have waited and then six to nine months later, I looked smart.
Jason Yeh: Yeah. Wow. I mean, it looks like so prescient now. I mean, uh, being able to fund yourself past a few milestones is. And I think like before we, we pivot away from this part of the conversation, I think my, [00:37:00] my takeaway there is like, people might listen to this at different times of funding environments.
Um, or you might run a process that allows you, you know, creates a ton of demand and your valuation is much higher than maybe your fundamentals say you are and you raise way, way, way more money. I think the key to that, and I wonder if you've done this and I wonder how you think about this is like. Essentially think about the fact that you probably skipped a round or, or you bundled two rounds together. And so I remember this because I made some investments at the height of the market, you know, when YC companies were getting funded at 40 million valuations and, you know, pulling down four or 5 million with No revenue or like minuscule revenue.
And I was so uncomfortable at those times. I mean, some of your investors might've been uncomfortable too. Like, but, um, the best founders I saw were like, look, I, I know what this means is this doesn't mean we have product market fit, or in your case, [00:38:00] maybe this doesn't mean we have repeatable sales channels or marketing strategies.
It means we need to allocate a part of that fundraise to answer those questions and get to that milestone. And assuming we get to those milestones. The next tranche of capital, that chunk, is going to be dedicated to something else. Um, when you brought in so much extra money, how did you even think about the doubt?
Like you said, you had 80 percent of the money already and what were you going to do with that money?
Dylan Beynon: I'm a big believer in, um, really investing into building a very strategic and intentional company culture. Um, I actually have, I'll show you, actually, I'm pretty proud. We actually, um, or I won the, uh, the Tony Hsieh award this year, uh, with a couple other founders, including the CEO of Dropbox for being like a transformational company culture.
Tony Hsieh was the founder and CEO of Zappos and wrote Delivering Happiness, which is like one of the. Sort of seminal books on company culture. Uh, and it is part of building company culture. I think a lot of [00:39:00] it is like, um, how do we do things around here? Like how does work get done? And then encoding that into the company's operating system and DNA, uh, with like rituals, artifacts, and mechanisms such that if I get hit by a bus tomorrow, like the culture has to live on because it's literally how everyone works all day.
Uh, someone would have to come in and be like, we're doing everything differently. Uh, which, which obviously can't happen. Um, and so we have four core values in there. With, you know, behaviors and again, rituals, artifacts, and mechanisms for each, uh, they're to practice intellectual honesty, make exceptional decisions, uh, cultivate wholeness and focus. Uh, and so the way we make decisions here is, uh, we really treat our managers and individuals as capital allocators. Uh, cause at its core, like we have a company with equity and I sell a piece of that equity for financial capital. Any intros or advice from founders are nice to have, but inherently I'm selling it for financial capital.
Uh, and then the goal is to [00:40:00] alchemize that financial capital in to enterprise value and the company, uh, usually through strategic human advantages, uh, and the way we're going to do that is we're going to metabolize the financial capital into human capital. So like employees, contractors, uh, robots, so software we build, software we buy, uh, you know, campaigns, initiatives, vendors, services, tools, et cetera.
Um, uh, and so we are very thoughtful and rigorous about, uh. Upfront looking at how we are making decisions on what we're investing our capital on, uh, what's working that we're going to double down on. And even more importantly, what's not working,
Jason Yeh: thing.
Dylan Beynon: not working. What's, what's not working that we're going to sell, uh, which is a common failure mode I see is that companies don't sell losses, like they don't sell things that aren't working.
They don't sell, you know, people who no longer are the right fit. And the right job and execute on a strategy. Um, and they just keep compiling costs because they're [00:41:00] not selling losses. They just keep adding new things. Um, and so I think for that reason, because that's such a part of our operating DNA. Uh, we've been able to stay very capital efficient.
So I raised our series B two years ago and, you know, we still have like 75%. Of the capital we raised in the B in the bank and three plus years of runway. Um, so, you know, a lot of people might say that's like you raise money for 18 to 24 months and we're two years in with, you know, three more years without pulling any extend the runway levers, uh, which we obviously can pull because our core business is profitable too.
Like the core, you know, carry delivery business without all the R and D and. Things we're doing around it. Um, so that's, that's how I think we've been able to do it. It's like sort of inputs, not outputs.
Jason Yeh: so impressive, man. I think, like, knowing very little about the company financial situation and the rounds and stuff like that, even just without knowing the dollar amounts [00:42:00] raised, the cadence of year, year, year, and then all of a sudden nothing, especially with the market going down, one thing I would have guessed or one narrative that could easily be right would be it hasn't been working and like, you know, you're custom words, right?
You might have tested the market before and not a lot of people were interested in, in raising, um, and to hear, like, you showed such strong fundamentals is like very, very impressive. So
Dylan Beynon: we've, we've definitely multiplied the business several times over and could raise again. Um, no idea what the valuation would be relative to our last one. We also had better, um, it could have raised a higher valuation last round, but it was already getting aggressive. Yeah. It was a great, it was already like.
Like felt generous and aggressive in a way that said, I don't wanna put us too far out ahead of our skis for where we're at. Um,
definitely, yeah, they, they're other friend. I've had some friends who they're like, I'm doing this company, or, Hey, I'm, we're doing this next round. I'm like, I'm in, what's the valuation?
They told me, I'm like, I'm out . Like [00:43:00] it's 50 x, uh, you know, a few million revenue. I, I, sorry. Like I don't . I don't think so. Um,
Jason Yeh: Before the episode ended, I asked Dylan to share whether or not he had any crazy experiences when fundraising. Let's just say this one was ice cold.
Dylan Beynon: Uh, I've got a good one from Mighty. Should I share that?
Jason Yeh: Yeah, please
Dylan Beynon: All right. When we were raising our Series A at Mighty, uh, we were building the company in New York City. And our number one choice, uh, was Union Square Ventures. Uh, you know, we, they, uh, had some lawyers on the team. My co founder was a lawyer. It's a legal tech company.
Incredible investors. I've been, both my co founder and I were reading, you know, Fred's blog, Fred Wilson, you know, the general partner there has blogged religiously for years. Uh, and they were super interested. And so we ended up getting to a final partner meeting with them. Uh, I think this was my first final partner meeting that I'd ever sat in.
Um, you [00:44:00] know, in like a, like a, like. At a top VCs office, like a tier one VC, and so they prep us and they tell us, um, you know, we're working with a guy there who's a lawyer, who I'm not sure if he's there anymore, who's a, who's a partner at the time. Um, and he tells us, Hey, like, you know, I'm your champion.
Um, but just let you know, like. Deal does have to go through Fred Wilson, Fred, and he's like pretty skeptical. He thinks like, even though you are disintermediating these sort of bad actors in the space and bringing rates down that like the space litigation, finance, legal funding, lawsuit lending, legal loans is like a little.
It's a little repugnant for us and for him. So you're gonna have to really sell him like division here. And so we, we get in to the office and it's probably a dozen people sitting around this massive conference room table, but no Fred Wilson. And so we sit down and they tell us, Hey, uh, just FYI, Fred's like [00:45:00] skiing.
Um, but he's going to dial in on the conference line
Jason Yeh: Oh God.
Dylan Beynon: and we're like, okay, that's a bummer, but no, no big deal. We'll roll with the punches. Um, and so my co founder giving the pitch and answering the questions. Uh, but we knew that like the strategy going in was like, Fred was the guy to convince. Like we were told upfront, like you have to convince Fred.
If you convince Fred, the deal's done. If you don't, probably not. That's, that's your, your objective here. Um, and so every so often my co founder and I would be like, so Fred, like, what do you think about that into the conference phone from like a dozen people, the firm. Oh, I wish silence,
Jason Yeh: Oh, God.
Dylan Beynon: just silence. And we'd wait and wait and be like, okay, we'll continue.
And you know, we give the pitch, talk to another partner. And then be like, so Fred, like, like, what's your, you know, what's your reaction to that? Like, do you think that's good traction? Like, how would you deal with this issue? You know, have you seen this before? Just silence
Jason Yeh: Oh, God.
Dylan Beynon: and the whole room is squirming.
Everybody knows this deal is not happening [00:46:00] that we're wasting our time that he already clearly had said no, but they didn't, I didn't get an, my hypothesis is they didn't want to say no after they say, we're gonna have a final partner meeting. So they had it, but. And we, yeah, it was, it was, I think, uh, sort of embarrassing all the way around.
Uh, so that was, that was, that was a tough one. I remember my, my co friend Josh and I walked in the elevator, turned to each other like, they're not doing the DLR. They're like, they're, they're, they're, they're not doing the deal.
Jason Yeh: so we don't end on that, like, brutal note, um, or at least that one story. Um, do you remember where you were and, uh, what happened? When you got the note from Kleiner that they would be leading this, this latest round and that they would be like, I mean, pushing a ton of money in, um, pretty early within the, the life cycle of your, you know, your last round.
Okay. So I don't remember where I was when they said they'd like to issue a term sheet. I think I was probably at home. I do remember distinctly where I was when we [00:47:00] decided to do the deal together. Um, which was, I was actually in Paris for the first time at a close friend.
Dylan Beynon: Here in our little anti commune commune that we're building in Austin, Texas. Um, he's also a really meaningful investor in Mindbloom. Um, an angel investor who's invested in both our A and our B. I was at his wedding in Paris. And I was like outside of their like, welcome party, like, pacing on the phone, talking to my lawyer, talking to managing partners, uh, doing backchannel references.
Uh, and unfortunately everyone really understood, you know, it's like cheering me on. Uh, it was definitely one of those moments where you could see. Um, you know, your, your wife or your peers be like, you work too much. You're workaholic here. We're at this wedding. You can't get off the phone. Um, but instead I think I've really, you know, supportive and like minded, you know, group of friends and, and wives are always like, you know, cheering me on.
How'd the call go? Does the, is the, is the deal done yet? and so yeah, it was like literally, uh, walking [00:48:00] into this, uh, opening wedding weekend as we decided, you know, let's, uh, let's, let's do this together and partner up and, uh, build the future of psychedelic medicine together and, and bend the curve on this mental health crisis.
Jason Yeh: Exciting.
Dylan Beynon: One thing that I want to wrap us up with is, um, you know, I like to create a little bit of texture around the companies that I talk to. Um, so I'll have different versions of this question, but, um, what's one of the more meaningful or like crazier stories that you have about. Um, Mindbloom in terms of your interactions with customers.
Jason Yeh: Uh, is there any like, sort of like, tear jerky or wild stories you have around, um, you know, Mindbloom's interactions with your, your end user?
Dylan Beynon: uh, tear jerkies. So our clients stories are like the lifeblood of the company. They're actually one of like the main pillars of our brand. Uh, is that, um, biggest. impediment to people trying ketamine or psychedelic therapy, we found is fear. Uh, and the thing that helps [00:49:00] people get over fear the most is hearing that someone just like you, who you trust, tried ketamine therapy and got an outcome.
So one client's story that, um, means a lot to me. I mentioned that my mom and my sister were both severely mentally ill. And over the last couple of years, they both died of fentanyl overdoses. Uh, my sister after getting out of a 90 day inpatient rehab facility. Uh, my mom after being homeless for 15 years.
Um, my dad struggled with mental health issues for a long time too. He's had a challenging life. And after my sister died about eight months ago, uh, he was in a like deep suicidal depression. Uh, he couldn't leave his bed, shower, or shave for 20 days straight. Uh, and was, you know, texting me very, uh, ups, unsettling things like here are all my passwords just in case.
You know, I have a bunch of silver hidden around the house just in case. Uh, things like that. Um, And so I [00:50:00] had like really thought about it and had essentially assigned like a 50 50 probability that he was going to kill himself in the next 30 60 days and sort of meditating and trying to come to terms with that and trying to figure out how to get him help obviously. Uh, I've been trying to get him to try ketamine therapy, try Mindbloom for, you know, since I started the company, uh, but just a little too scary for him. A little too old school, um, you know, a little too resistant to trying really any mental health treatment that's not, you know, antidepressants, including talk therapy. Uh, but this was the catalyst that he needed to give it a shot. And so he started working directly with our medical director, uh, Dr. Leonardo Vondo, who's, uh, like a nationally, you know, renowned addiction and psychedelic therapy psychiatrist, uh, has been a pioneer in bringing ketamine therapy to lower, uh, sort of income populations.
in, in the Bronx, in New York. Uh, and after doing ketamine therapy through Mindbloom, uh, he was literally in full remission from suicidality, uh, [00:51:00] and like not just alleviated his depression symptoms, but he sounds like 30 years younger. he has like sort of taken back control of his life and his health.
He's exercising, he's eating healthy. You know, he has goals now to sort of find a, like another, like romantic partner that he could, you know, potentially spend the, you know, uh, last chapters of his life with, uh, he's like reorganizing the house and throwing things away and decorating. Um, and he just retired and is now going from like, being sort of, uh, down on and nervous about retiring.
What am I gonna do? What about my meaning purpose? Like excited and engaging with the next chapter of his life. And so he's actually done, he's actually done several programs now, uh, and now he actually doesn't need to do them. So he doesn't like vary. And so for me to, um, you know, have not been able to help, you know, my mother and my sister with their mental health issues and ultimately lose them, uh, but get to bring psychedelic therapy to my father and, you know, potentially, [00:52:00] uh, maybe most likely save his life.
Uh, it was really cool.
Jason Yeh: I was not expecting that. That is insane. Dude. Um, Thank you for sharing all of that. There is a lot of, of surface area to react to from just a learning standpoint for any founder, entrepreneur, and then people going through fundraisers and then, uh, just, you know, drawing a lot of attention to mental health and the stuff that you're doing and then your own personal story, like.
Thank you for being so open and honest about that stuff. This is going to be great to share with other people.
Dylan Beynon: Yeah. Thank you for having me on and giving me an opportunity to share.
That was my conversation with Dylan Bindin founder and CEO of mine, bloom at home psychedelic care that will transform your mental health. I really loved this episode. Not only was it packed with knowledge, but it really pulled on my heartstrings to.
Jason Yeh: Make sure you check out mine bloom and see the impact they're making on the mental health industry. It's pretty wild.
When we come [00:53:00] back, I get to talk to my producer page to see what she thought about the episode. This one is right up her alley.
So I have a feeling she really enjoyed it.
Paige Randall: All right. Hello Jason. How are you
jason_1_01-22-2024_131009: hey hey P. How are
Jason Yeh: you?
Paige Randall: Not bad. Um, this episode had a lot going on in it. From, you know, emotional stories to incredible venture Backable stories, to just overall, honestly, me being impressed with the founder that he is and how much he was able to accomplish within the three years that he raised for mind bloom.
So there's definitely a lot of different things that I wanna touch on,
I will admit this episode stumped me just a little [00:55:00] bit, um, especially when he was speaking around his series A and. I hope I don't butcher this, but, so this is my question that I have for you because I'm, I'm terribly confused. He went out to raise his series A and because he wanted a specific investor, Peter Thiel, Thiel,
I'm sure if I'm pronounced Thiel.
Um, he decided, he allowed, you know, um, the valuation to be lower and he, he like closed the, the round with him and then he went out. To raise again a few months after still for his series A. I'm just awfully confused here. I, I know I got some clarity around this, but I just wanna make sure that the other people or founders that are listening to this understand, like, my mind goes to how is that possible?
Is that allowed?
Um, are you allowed to have like a lower valuation and then go out and raise with, um, a higher valuation? Can [00:56:00] you just please clarify some of
Jason Yeh: Sure. Yeah. And if you're just gonna hear the, this story without context or, uh, without this debrief and you haven't seen it before, there is, there's no shame in being a little bit confused because one, it's, it's a nuance and aggressive strategy. Two, like I would say most founders don't know the legality behind the things that they were doing.
So, um, at a high level, and this isn't for all cases, I just like putting out this perspective around business law or the legality of contracts and what you, you, you ask the question, are you, can you do these things? Can you not do these things? This is a broad stroke statement, and of course the sort of the legal hawks out there will be in the comments and yell at me for this.
But in general, I truly believe you can do almost anything in business and you can write into contracts almost anything. [00:57:00] Um, and anything that's in a contract right now can also be changed as long as people agree to it. So like, people are like, can you do this? Can you not do this? You can kind of do anything if people agree to it. So that's a high level. And I, and that might sound overly simplistic, but it's an important message for founders to hear because so much of being good at fundraising and business is like understanding what is easy to get done, what's possible to get done. And so many founders think like they can't do it 'cause they've heard that you can't do it or that other people haven't done it in the past. So that's one The second thing is, go ahead.
Paige Randall: I was just gonna say it's kind of genius, um, when you think about it, like it's totally genius. Like he ended up raising less than he wanted to at a lower valuation with the person that he wanted, and then he was, was able to go back out. And raise to, you know, create the actual amount he wanted to raise in a series A, which was like, uh, [00:58:00] 13, 13 or 12, 12 million.
And he was able to get like the best of both worlds. So, I mean, I'm, I'm all for it. I
think you have the mind
Jason Yeh: and Dylan has the mind for it, and he has the experience that he probably has people around him that help give him the advice that he can get this done. But yeah, he did something that most people don't do, and because that's something most people don't do, you won't find it in the fundraising textbooks necessarily, and you won't find it.
You just have to kind of know the nuance of, Hey. What is it I'm, I'm trying to get done and what is possible? What will people be open to doing? So that's, you know, level setting there. The second thing is, you know, you asked about raising a certain round, like raising a Series A and if you can chop it up and do all these things. Well, when it comes to the legal documentation of rounds, what you will find is that when people do their investment at the same time, those. Things are considered rounds on the same legal documents. So if you and I all invested at the same time on the same documents, [00:59:00] that would be called, let's call it the Series J for Jason. And, um, if afterwards, people invested at the, the same kind of time, but different terms on the legal documents, it couldn't be called the Series J two, it would have to have some other designation. So sometimes they would put Series J two.
the legal point of view, they're technically different rounds, but when we are just talking to people on the street, um, and we're talking in, in business terms and media, I. What people wanna know is when did people take money in? And at that time, how much money in total did they get so that they understand the context of what else? What were they able to accomplish? What did they use that capital to invest in? How much capital did they have to invest in business operations? So they would consider all the different investments that happen around the similar time zone to all be the same round. So it's overly [01:00:00] simplistic. We all invested in the series J.
So that was, that's what was, that's what was happening with Dylan and Mind Bloom is that he was chopping up, like how people would come in and when externally, people would just, you know, we would think about like everyone came into the series A, but if you really dove into it, you would find out that there were these different. Sort of rounds, like series of rounds that were probably series a, series A one, series A two or something like that. So that's, that's the clarification there. And then
in terms of, yeah, and then in terms of the overall strategy that he went with, uh, you know, we will do some simple math and ideas around this. He wanted to, let's say he wanted to raise. 10. These weren't the numbers, but let's say he wanted to raise $10 million and in his mind he wanted a valuation of a hundred million dollars. Like let's say, that was the hypothetical situation. Right? And there was [01:01:00] an investor that was a super all star, Peter Thiel, who first backer of Facebook and a lot of other amazing investments who has the leverage because of his track record and his ability to help. Companies succeed to say, well, I want a great price. That's the only way I'll invest is, is if I get a great price and I don't want to do a hundred million dollar valuation. Well, uh, what Dylan was saying was like, well, my goal is to get overall, I. X dollars total in, in this simple math version, I want to get $10 million of invested capital. If I give Peter Thiel his discount, his price break that he wants, he doesn't wanna invest at the a hundred million that I want, I'm gonna give him a 50% discount. As in you get to invest at a $50 million valuation. I'll take $5 million from you. I still need to raise $10 million. You know where I wanna get at is if all [01:02:00] the money we're invested at a hundred million dollars in order to get that done on a blended basis, we'll go and say, well, let's raise another 5 million.
Let's raise the rest of the round. But at $150 million valuation, in which case, the blended impact of all those investments will all feel like the whole 10 million was done at a hundred million dollars. So that's kind of how he thought about things. He was like, I really want Peter Thiel. By the way, the signal, the the perception of a company that got Peter Thiel to invest in is already one that like, now the value is going up.
Wow. This is an amazing company. So he was able to give what he called the Peter Teel discount to Peter Teel and then go out to everyone else and be like, Hey, do you want to invest alongside behind Peter Thiel? Well, here's the price. And people wanted to do it. And he got the best of both worlds as you put it.
Paige Randall: That is literally genius, but like [01:03:00] extremely hard to pull off.
Jason Yeh: correct. I think
that, you know, your instincts are right. It, it's smart to be able to think that's happening here. Here are the things about, um, what we said, what I said. Here's the sort of the rub of what I said about anything is possible. Well, in investing when things are non-standard or when things don't look. Like you're used to. It can kind of raise eyebrows. It can kind of have people take a second and hesitate and when there's ever doubt or hesitation around things or why is this happening? The mind of a vc, an investor can go in a lot of different ways, and a lot of times they'll be like, I. I, I don't want to deal with something that looks off or looks nonstandard, where I have to think, is there a reason why it's like this?
Is there a reason why it's like this and it's hurting me and hurting my ability to make money? Why I'm just not gonna do that? So in order for this is the, the caveat about anything is possible In order for you to do non-standard things the way Dylan [01:04:00] did, you have to have a lot of momentum. You have to have a lot of leverage.
You have to lot have a lot of like. Excitement about the deal to overcome some of that. Like if, so, in his case, he was doing it at a re, in a really hot market. Uh, and, and he was doing it with Peter Thiel coming in. He was doing it with him as a. Experienced, successful repeat entrepreneur, he had a lot of things going for it.
So the little bit of a curve ball was overcome by all that excitement. This isn't to say that some random, um, founder who's never done things before can go in and be like, oh, I, you know, I'm gonna chop up my round at three different rounds, get the average, and go tell people that they get different prices. Well, if you don't have the same things that Dylan and Blom had, that might be difficulT.
Paige Randall: that was, that's ama Well, 'cause that's the biggest hunk of, of that was the biggest hunk of the episode that I needed to like, wrap my head around. And, um, I think you just did that beautifully. And I, [01:05:00] I think it goes to show honestly how. How good Dylan is at what he does. He's got a lot of knowledge up there and he is putting it to use and you know, all power to him.
I think this was an amazing episode. It was a tear jerky episode. It was. It was. It was a lot of things, and I'm glad that we get to give this to our listeners.
So good and, um, I, you asked the exact right questions to make that emotional story be the, the surface area to learn a lot of the things that founders don't really understand about valuation and pricing. So,
Jason Yeh: Great.
Paige Randall: I'm glad I could, I'm glad I could ask the embarrassing questions so they don't have to.
Jason Yeh: Awesome. Great stuff.