Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenebeck on Bloomberg Radio.
Speaker 2: So Arianna Huffington calls her next guest new book quote
Speaker 2: a must read for anyone, from seasoned entrepreneurs to recent grads.
Speaker 1: Cheril Sandberg says that quote every entrepreneur should take advantage
Speaker 1: of her experience and knowledge as they start their own
Speaker 1: journey in business.
Speaker 2: So's so true. Please to have back little, Please to
Speaker 2: have it back with us, Liz, I blame John Tucker
Speaker 2: for this.
Speaker 1: It's okay, we're not live, Carol, that's fine.
Speaker 2: Take two. Please dad back with us. Liz Elton, co
Speaker 2: founder of the translation company Transperfect. They began back in
Speaker 2: nineteen ninety two at NYU Stern School of Business. She's
Speaker 2: also the founder and CEO of the Elizabeth Elting Foundation,
Speaker 2: and she's got a new book out, Dream Big and Win,
Speaker 2: Translating passion into purpose and creating a billion dollar business.
Speaker 2: I'm Liz, great to have you here in studio. Ah
Speaker 2: starting a business, though sometimes you have to have a
Speaker 2: lot of failures along the way. Did you have a
Speaker 2: lot of failures?
Speaker 3: Yes, Carolyn, I had many, many failures, and that was
Speaker 3: what prompted me to write the book. I thought, I
Speaker 3: can create something based on what I did right and
Speaker 3: the many things I did wrong.
Speaker 2: What's the absolutely what's the biggest thing I always think about,
Speaker 2: like you know the mistakes that you really learned from?
Speaker 3: Okay, well, one thing that is very big that I
Speaker 3: learned was when you start a company. And it seems
Speaker 3: so obvious now, but you need the right paperwork in place,
Speaker 3: A proper shareholders agreement which determines roles, responsibilities, debt, what
Speaker 3: happened or sorry, roles responsibilities, what happened in the event
Speaker 3: of how decisions are made, dispute resolution, debt, what happened
Speaker 3: in the event of death, disability, a buy sell provision,
Speaker 3: and an exit strategy. That's critical and we did not
Speaker 3: have one.
Speaker 1: Well but but come on, if you're just two people
Speaker 1: in your twenties with an idea, you know, a in
Speaker 1: a dorm room at NYU, you know this is not
Speaker 1: what you're thinking about. You're thinking about the idea of
Speaker 1: translating the world's business documents exactly.
Speaker 4: And the goal was to bring in the business.
Speaker 3: We had no money, so we couldn't even hire an
Speaker 3: attorney and hire an accountant, so We certainly couldn't get
Speaker 3: together a shareholders agreement.
Speaker 4: There was nothing to fight over it.
Speaker 1: Give people your story about business in case people aren't
Speaker 1: familiar with your story. I mean, you built this business
Speaker 1: with your co founder to hundreds of millions of dollars
Speaker 1: a year in revenue, and then he eventually bought you out.
Speaker 1: But talk a little bit about that and sort of
Speaker 1: like the lack of shareholders agreement there and what happened.
Speaker 3: Sure, And so one issue was we did not have
Speaker 3: a shareholders agreement, and I looked at getting one along
Speaker 3: the way. We talked about it, but we could never
Speaker 3: agree on one once there was something to fight over.
Speaker 4: So that was one issue.
Speaker 3: And related to that, we couldn't agree on decisions day
Speaker 3: in and day out. And we were fifty to fifty owners.
Speaker 3: So that's the other piece of it. I advise against
Speaker 3: being fifty fifty owners whereby you have no one to
Speaker 3: resolve deadlock, no tie breaker, And that was the case,
Speaker 3: fifty to fifty owners and no deciding votes.
Speaker 1: Were you in a unique situation though? Correct me if
Speaker 1: I'm wrong. You didn't raise outside funding.
Speaker 4: We did not.
Speaker 1: Oftentimes with companies these days, especially if they go after
Speaker 1: venture capital. Then you get like a you know, VCS
Speaker 1: with experience on your board, you get all the answer
Speaker 1: to right and you do have to answer to them.
Speaker 4: Yes, you're absolutely right.
Speaker 3: And what happened is with the original company, trans Perfect,
Speaker 3: we didn't raise outside funding. We did start a sister
Speaker 3: company in nineteen ninety nine, seven years after we started,
Speaker 3: called Translations dot Com, and for that we did raise
Speaker 3: some raise some outside funds initially, so for that we
Speaker 3: handled it differently, but we ended up buying those investors out.
Speaker 3: So back to the original company, no shareold agreement, no
Speaker 3: tiebreaker when we didn't agree, and fifty to fifty ownership,
Speaker 3: and I advise against that. I say, you need a
Speaker 3: shareholders agreement. You want to own more than fifty percent
Speaker 3: if there are only two of you, or you want
Speaker 3: to be the decision maker if they're more, and that's critical.
Speaker 2: What would you say in terms of advice of going
Speaker 2: into business with someone who is your partner.
Speaker 4: And your partner meaning.
Speaker 3: Meaning you have a personal relationship, so I should be no, No, absolutely,
Speaker 3: he was my boyfriend at the get go. And again,
Speaker 3: as I said, we started with no money whatsoever, and
Speaker 3: we just focused on sales, not on raising money. And
Speaker 3: what I advise is, no matter who the person is
Speaker 3: that you're starting the company with, whether they're your boyfriend,
Speaker 3: your girlfriend, your husband, your wife, your child, brother, sister,
Speaker 3: you need a proper shareholders agreement specifically to deal with
Speaker 3: the issues I was saying. And so over the years,
Speaker 3: we didn't agree many times, day in and day out
Speaker 3: because there was no tiebreaker, and we kind of diverged ultimately,
Speaker 3: and then we had a very interesting and crazy situation
Speaker 3: at the end and a very intense litigation where I
Speaker 3: spent fifty million dollars selling the company on legal fees
Speaker 3: and the process because we didn't have a proper shareholders agreement.
Speaker 1: Well, I don't want I don't want people to get
Speaker 1: the wrong impression about the company that you built. However,
Speaker 1: because even though you had all these challenges while you
Speaker 1: were building, the company, ultimately became a very successful company
Speaker 1: that brought in hundreds of millions dollars of revenue per year.
Speaker 1: And today you're able to do whatever you want after selling.
Speaker 3: Yes, absolutely, And I am so fortunate. And that's one
Speaker 3: of the things I say. I say, work today like
Speaker 3: no one else will, so you can live and give
Speaker 3: tomorrow like no one else Can, and it did end
Speaker 3: up being the largest company in the industry. That was
Speaker 3: the goal from day one, because there were thousands of
Speaker 3: translations companies out there when we started. It wasn't a
Speaker 3: brand new idea in the early nineties, but the goal
Speaker 3: was to build the biggest, a top tier company along
Speaker 3: the lines of a high level law firm investment bank.
Speaker 3: And fortunately, after twenty five years, we were able to
Speaker 3: accomplish that goal and become the largest in the industry
Speaker 3: and be a billion dollar company. And so now I
Speaker 3: have the good fortune of having a foundation and being
Speaker 3: able to focus on other things.
Speaker 2: Well, talk to us about that focus and how you're
Speaker 2: helping maybe others create their own dreams.
Speaker 4: Sure.
Speaker 3: Well, one of the things I'm doing is I do
Speaker 3: focus a lot on entrepreneurs I'm a big believer in
Speaker 3: entrepreneurship and education.
Speaker 4: I think they're the two great equalizers.
Speaker 3: So I'm involved in the entrepreneurship accelerator program at and
Speaker 3: Why You Stern. It's called Endless Frontier Labs. I think
Speaker 3: it's the best accelerator program out there. I'm also involved
Speaker 3: in the American Heart Association Social Impact Fund, which is
Speaker 3: also funding entrepreneurs and marginalized communities. And then I fund
Speaker 3: other entrepreneurs and then I speak a lot about entrepreneurship
Speaker 3: and HYU Business School, Columbia Business School, Stamford. And now
Speaker 3: I've written this book largely to share the lessons.
Speaker 1: Do you do any investing, yes, what's exciting to you
Speaker 1: right now? What types of companies?
Speaker 4: Oh?
Speaker 3: As far as companies, yes, absolutely well. I do love
Speaker 3: supporting other women entrepreneurs and ones that are doing good
Speaker 3: as well as doing well. So you know, things related
Speaker 3: to climate change or you know that are fighting climate change,
Speaker 3: things related to technology AI and so I have investments
Speaker 3: in each of those types of companies.
Speaker 4: So do a lot with that as well.
Speaker 2: What do you look for in a leader or an entrepreneur.
Speaker 3: I look for someone who is incredibly proactive, curious, a
Speaker 3: hard worker.
Speaker 4: Focused. Now I say focus pocus.
Speaker 3: If you're all in and you don't get distracted, and
Speaker 3: make it all about the company and talk about it
Speaker 3: and make everything you do related to it.
Speaker 4: That that's very important.
Speaker 2: You know, we saw a real surge in entrepreneurship coming
Speaker 2: out of the pandemic. During the pandemic and out of
Speaker 2: the pandemic. I'm just curious from your vantage point if
Speaker 2: you can tell us you know, whether that momentum is
Speaker 2: continuing or have people kind of moved back and are
Speaker 2: going into more established companies.
Speaker 3: Oh, I think it's definitely growing, and I think it's
Speaker 3: a wonderful thing. It's a great way for all of
Speaker 3: us to determine our own destiny. I mean, I'm a
Speaker 3: big believer in that, and I'm seeing it more and
Speaker 3: more and more.
Speaker 1: So does it worry you though, that with rates going higher,
Speaker 1: venture capital funding might be drying up? We did see
Speaker 1: sort of a risk.
Speaker 3: I don't.
Speaker 2: I can't.
Speaker 1: We can't call it a resurgence, especially with the way
Speaker 1: that IPOs have performed over the past couple weeks now.
Speaker 1: But you know there is some talk of a resurgence.
Speaker 1: I mean, are you concerned that we're not seeing the
Speaker 1: support for companies that are starting right now because VC
Speaker 1: funding has dried up so much?
Speaker 3: Well, I have seen that, But as I said that,
Speaker 3: I think that's how we started the company, no outside funding.
Speaker 3: And in the book I talk a lot about bootstrapping
Speaker 3: and how to build a company without it outside funding.
Speaker 3: And I'm a big believer in that because for so
Speaker 3: many reasons. I mean, one is you retain ownership. You
Speaker 3: don't have to be distracted by investors and their short
Speaker 3: term goals rather than the long term goals at the company.
Speaker 3: I think you don't have to dilute ownership. There are
Speaker 3: a lot of reasons, of course, so if you can
Speaker 3: do it without outside funding, all the better.
Speaker 4: And that's a lot about what I.
Speaker 3: Focus on in the book, because that's what we did
Speaker 3: and that worked incredibly well.
Speaker 2: You know, we've certainly had a fair amount of entrepreneurs
Speaker 2: who have come in and it's all that bootstopping. They've
Speaker 2: done it for themselves, but it can be really, really difficult,
Speaker 2: and I think sometimes they would like that assist with
Speaker 2: some extra funding. Thank you so much, really appreciate it. Lizelting.
Speaker 2: She's co founder of the translation company Transperfect, and her
Speaker 2: new book Dream Big and When translating passion into purpose
Speaker 2: and creating a billion dollar business