Venture Capital vs Bootstrapping: Jason Peterson of GoDigital Media Group On How To Determine If Fundraising Or Bootstrapping Is The Right Choice For Your Startup
Venture Capital is required where you have to grow quickly and capture a market to create a sustainably defensible market position. If this is not the case, then bootstrap and hold off on equity funding as long as possible so you preserve your upside as a founder.
Founders are often faced with the nagging question of whether Fundraising or Bootstrapping is the best choice for them. What is better, having access to capital or maintaining full control over your vision and profits? What is preferred, to have the seasoned oversight of an experienced investor, or to plow forward with a disruptive and pioneering ‘can do’ attitude? Of course, every situation is different, but what standards can be used to help a founder decide? As a part of this series called “Venture Capital vs. Bootstrapping: How To Determine If Fundraising Or Bootstrapping Is The Right Choice For Your Startup”, I had the pleasure of interviewing Jason Peterson.
CEO, JASON PETERSON — Billboard’s top 100 POWER PLAYERS, Billboard’s LATIN TOP 100 POWER PLAYERS 2020. Entrepreneur and innovator, Jason has become quite the “star” entrepreneur in a number of arenas including the digital and tech world. CEO of GoDigital with four subsidiary companies that employ over 200 people in 16 countries, Jason is also a top influencer in the music industry (as named several years in a row by Billboard Magazine).
Through the acquisition of YogaWorks (no more physical facilities) and other influential niche companies, GoDigital is building the Viacom of the 21st century.
Jason is known for his visionary work in the world of streaming entertainment content (earning status as an essential service), creating ways to distribute and monetize content digitally via his companies. He recognized early on, the move from physical DVDs and CDs to streaming services (i.e., Netflix), transitioning the music and visual world into a new realm. Jason foresaw the coming revolution and used this period of volatility to help re-revitize the music industry.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
In 2005, while at Pepperdine, Ryan Seashore introduced me to Master P who was at the time one of the ‘big 3’ rap moguls alongside Sean ‘P-Diddy’ Combs and Jay-Z. Master P showed up for a meeting at Jerry’s Famous Deli in Westwood with no grill, no chains, no entourage, looking like a normal person. He turned off his Blackberry on Suge Knight and listened to me talk for two hours. Master P gave me a five year worldwide exclusive deal to do all his digital distribution. I had nothing, just an idea. I called Bruno Ybarra at Apple the next day and got a deal with iTunes so Apple would have Master P’s music. That was the genesis of GoDigital and the rest is history.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or takeaway did you learn from that?
I was invited to Gwanju in South Korea for the Asian Content Expo. The government of South Korea paid for the entire trip. I was one of only a handful of westerners there. The South Korean’s love their pomp and circumstance so they had a large luncheon with the mayor, city council, congressmen equivalents, and other dignitaries. We were all sitting at 10-person round tables in a large conference room. A few hundred of us. I was at one of the front tables. There was an empty seat across from me. Next to which was a gentleman with a name card that said in English “President, China Central Television (CCTV)”, the largest television network in the world. He had a translator. So, during dessert I moved to the vacant seat next to the President of CCTV and attempted to introduce myself. The first mistake I made was, I assumed his translator would speak English. She was in fact a Mandarin-Korean translator. The second mistake became clear when this kind Chinese executive spoke enough English to tell me we had met in Cannes, France and I didn’t remember him.
My take-away from this was I never say ‘nice to meet you’ I always say ‘nice to see you’ to never give away if I remember someone or not.
You are a successful business leader. Which three-character traits do you think were most instrumental to your success? Can you please share a story or example for each?
- Being fearless: fear of failure, rejection, abandonment is paramount for most people and stop far too many people from changing the world for the better. Getting divorced helped me overcome my fear of failure and freed me from the shackles of caring what others think.
- Living in an inspired state: The quality of life is the quality of your emotions. Living in a state of perpetual ‘super fantastic’ tunes our brains to focus on positivity which attracts more positive people and opportunities and creates a positive feedback loop.
- Being curious: Life is about continual learning. When we stop growing, we start dying. Being curious has helped open doors for me I never would have seen from a hidden surf spot in Mexico to an underground club in London.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
There have been lots of inflection points that I’ve built upon. Meeting Master P, Daddy Yankee, T.I. Psy, Janet Jackson, Jason Derulo. I like to be close to doors so when they open, I can step through before the next person.
None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?
I’ve been fortunate to have many mentors over the years. I’m grateful for Larry Slamen for teaching me the lean startup, business model generation and business model canvas methods taught by people like Steven Gary Blank at Stanford. Larry and I had a falling out over some significant differences. It goes to show that everyone has something to teach us, even people we don’t align with.
You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?
We all are traumatized by life. This creates fear based behavioral holding patterns that we repeat. Everyone who wants to be successful should make time on a regular basis to go to therapy to work on metabolizing their stores traumas to release them from the fear of failure. When I say therapy, I don’t mean cognitive behavioral ‘talk’ therapy. I mean Image Transformation Therapy, Rapid Eye Movement Desensitization and Reprogramming, Dynamic Breathwork and similar practices that literally metabolize stored trauma so we can return to a state of being rational.
Ok, thank you for that. Let’s now jump to the main part of our discussion. Can you share a story with us about your most successful Angel or VC investment? Or an investment that you are most proud of? What was its lesson?
I’m a big fan of asset backed alternative investments either directly or through operating companies that give access to the assets. Buying the recording artist T.I’s recorded music catalog was the best investment we’ve probably made. The music industry is growing quickly due to the perfect storm of smart phone, high speed wireless and banking penetration rate increases. Music catalogs are making more money every year. The lesson is purchase assets that earn income from a large and fast-growing market.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
We invested in a startup record label that had four promising artists and no product. We will never do that again. The execution risk of an early-stage business is significant, including the risk the people in the business are negligent or reckless. We’d prefer to pay more for a business that has been derisked.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
We turned down investing in Bad Bunny, Ozuna, and Nicki Jam. They basically begged us to invest in them. Now they are some of the most streamed artists in the world. The lesson is don’t focus on the failures. Fail forward, fail fast, learn, and repeat. You will succeed.
Super. Here is the main question of this interview. Let’s imagine that a young founder comes to you and asks your advice about whether Venture Capital or Bootstrapping is best for them? What would you advise them? Can you kindly share “5 things a founder should look at to determine if fundraising or bootstrapping is the right choice”? If you can, please share a story or example for each.
Venture Capital is required where you have to grow quickly and capture a market to create a sustainably defensible market position. If this is not the case, then bootstrap and hold off on equity funding as long as possible so you preserve your upside as a founder.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I believe that the quality of our emotions is the quality of our life. We are all traumatized by life and need to heal to live in a perpetual state of happiness. I’d like to progress a movement of people focused on healing their life traumas in order to live in a state of perpetual health and happiness.
We are very blessed that a lot of amazing founders and social impact organizations read this column. Is there a person in the world with whom you’d like to have a private breakfast or lunch, and why? He or she might just see this. :-)
Richard Branson. He is arguably the greatest entrepreneur of his generation. Richard has worked in dozens of industries and always had fun doing it. I love that he is a tri-athlete, plays tennis, does watersports all while controlling over 100 companies.
How can our readers further follow your work online?
Linkedin.com/jasonpeterson
Instagram.com/uscjasonpeterson
Thank you so much for your time. This was very inspiring!
