Jay Jung of Embarc Advisors: “Building the right team is really key”

Building the right team is really key. There’s only so much that you can do by yourself. Time is your most valuable resource, and you have to be able to find people who are better than you at specific tasks. And that’s how you accelerate a business and gain leverage. Startups have such a glamorous […]

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Building the right team is really key. There’s only so much that you can do by yourself. Time is your most valuable resource, and you have to be able to find people who are better than you at specific tasks. And that’s how you accelerate a business and gain leverage.

Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles.

Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup?

In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experience about what it takes to create a highly successful startup.

I had the pleasure of interviewing Jay Jung.

Jay Jung is the founder and managing partner at Embarc Advisors and has nearly 20 years of experience in M&A, capital raising and corporate finance. Jay is a former Goldman Sachs Investment Banking Vice President and McKinsey & Company Engagement Manager. He has completed more than 50 billion dollars in transactions, including marquee transactions such as the sale of Yahoo, the sale of MuleSoft and the sale of SanDisk. He also co-founded a technology startup that raised capital from Softbank and other VCs. Jay currently works with a broad range of companies as a fractional CFO or advises them on M&A and capital raises. During the past year Embarc Advisors has grown from a one-person shop to five people and helped numerous clients on the sale of their business, capital raise, mergers and celebrity investment partnerships. Jay received an MBA from Wharton Business School of the University of Pennsylvania.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

During my last summer in college, I was interning at Bain, and I thought consulting was such BS. When my friend asked to co-found a s tech startup, I ditched my internship and joined that adventure. It was in the network solutions space. We did it for a few years and eventually closed shop. I learned how hard it is to run and build a business. So I joined a large successful Internet Company (it was about 15B dollars market cap back then) to see how the successful guys did it. After a couple years I realized in many ways they did not know what they were doing either. So I asked myself, who is the expert in managing companies and ended up back in management consulting with McKinsey. So full circle. I was part of the Corporate Finance practice there and really got enamored with M&A and capital markets. One thing I realized was investment bankers had more experience and expertise in this area. So I went to business school and got a job at Goldman, where I stayed for the next six years (living the dream). Three years ago I left and started Embarc advisors and e tand I’ve worked with a variety of small and large companies.

What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?

So, I think it really was a couple things for me. One, my wife was really doing well with her work. But more importantly she was very enthusiastic and happy with her job. I wanted to find something like that. But hopefully where I don’t have to wake up at 4am during my family vacation to do a call with London.

So, I left Goldman. I’m a finance guy, but I didn’t want to go work in a large company to be in finance. I did that before, and it was not my cup of tea, and I wanted to work in a start-up. But I also didn’t want to do FP&A for a single startup; from a day-to-day, that’s not as exciting for me.

So, I was trying to figure out what I wanted to do. And while I was doing that, I started working with a bunch of small startups, kind of as an advisor/consultant. I realized that there is a significant need for people like me, even amongst smaller companies.

Frankly, most people with my background don’t want to work for small, unproven and unknown companies. When I look at my my ex-Goldman colleagues, they’re all working at Facebook, Google, Uber and all of the big unicorn companies. Nobody’s working with small companies. But that kind of made me realize, `Well, I like working with small companies and it seems like they could use the help. And there’s a market and a need for it.’ So, I decided, `Let me let me see if I can make a business out of this.’ And here I am now.

Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?

My dad, Yeon-Bo Chung, started his own biotech company. He had had a really stable job as a university professor and we were doing just fine. He saw this opportunity, and I would never have thought until then that my dad was the entrepreneurial type, but he took the risk and started his own company. And right after he started his company, the 1997 Asian financial crisis hut, but he was able to weather the storm. He had a solid technology base and products and managed to run that business for 15 to 20 years.

You can think of my father’s business as like an earlier version of what is now, 23 And Me. It dealt with personal DNA testing and DNA fingerprinting

Many years later, I realized that my father’s entrepreneurial endeavor could have been much more successful financially if he had someone like me advising him. He is an amazing scientist and was brave to start his own business, but he made some critical tactical mistakes because he did not have a firm grasp of corporate finance.

What do you think makes your company stand out? Can you share a story?

The reality is that any small company can benefit from working with the right kind of financial advisors. But usually an ex-Goldman Sachs expert isn’t going to work with smaller companies. Where we stand out is we deliver kind of those big guns to the small guys, and we’ve just seen phenomenal results. With one deal, I think just the working capital terms that we put in — which was a very small kind of deal — pretty much more than covered our fees. And we’ve helped our clients increase their deal values phenomenally while going through a transaction.

Now, would I make more money if I worked for bigger company? Yes, probably I would. But you’ve got do what you enjoy.

How have you used your success to bring goodness to the world?

We help the smaller companies, the small guys, and that’s a big deal. These are the people that that really need this kind of financial expertise to make it.

The reality is there aren’t a lot of people that have a strong M&A toolkit — even at Goldman. I think Goldman has 40,000 employees, of which only a few thousand are investment bankers, of which only a handful of them have them have a ton of M&A experience.

So, it’s not like just anyone who has worked in finance can run an M&A deal. That makes the people who can do it be in high demand and they usually don’t work for small companies. So, I think that’s the big difference we make. We make a difference on for every single one of those companies and their employees. And I think that’s why all of my clients usually end up becoming really good friends with me.

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?

First, I would say I would say persistence and diligence. Nothing beats hard work.

Number two, I’d say it’s about being honest with my clients and having the integrity to give them the right advice — even when it’s not in my best interest. There are a lot of times where the best advice for our clients isn’t the best result for Embarc Advisors.

The third thing is identifying the right people to work with. I can’t do this alone and I’ve been fortunate enough to find really good people to work with me as a team. And frankly, we could grow a lot faster, but we’re limited by our ability to hire the right people in terms of aptitudes and cultural fit.

Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?

I think one piece of advice that I received early on was, `Hey, just put your head down, work hard and let your work speak for itself.’ I disagree with that now because I realize the work doesn’t always speak for itself and you always have to be an advocate for yourself, whether you’re in a big company or starting your own business. If you don’t advocate for yourself, then don’t blindly expect someone is going to do it for you.

Can you tell us a story about the hard times that you faced when you first started your journey?

When I when I first started with Embarc Advisors, even though I did have really good credentials, I didn’t have any track record of working with smaller companies. So, it was very difficult to win new clients. It’s only been three years since we started, but it almost feels like the distant past. Now, we don’t even have to have to pitch for new business because we just people coming in through inbounds or referrals.

There was a time when I would spend maybe half of my day pitching and many times I wouldn’t even get a response. It was rough and I wasn’t sure if there was a need or an appreciation for the services that I was proposing to offer.

I wanted to work with small companies, and I felt like I had a lot to offer, but if there was no buyer, then it wasn’t a good business. There was a time when I was on the outside and kind of struggling.

Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?

If you are starting your own business, you kind of have to be an optimist. For me, the persistence goes back to the earlier point about being persistent and diligent. You celebrate the small wins.

I remember that I was walking with my wife, and I was telling her, ‘Oh, we just won this deal!’ And, right now, that deal would be too small for me to even take. But, at the time, we were really excited about it and we celebrated with a nice dinner out. Back then, you just take the small wins and then you build on them. I think it’s important to maintain that optimism and confidence and believe in yourself and keep that passion. I know that it’s a lot of fluffy words, but I think that’s what it takes to get a business off the ground when you have nothing.

The journey of an entrepreneur is never easy, and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?

I think that it’s very important to have some kind of separation in work and life. The way I do it is, even though I work from home, I compartmentalize it. I make sure I still sleep seven-to-eight hours a day. And I make sure I carve out separate time with my wife, where it’s just time for us and when it’s not about work. I’m not gonna take calls or respond to emails, and just about decompressing, and knowing that there is more to life than the business.

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 a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?

I think it depends on the nature of the business. Nowadays, everyone is so enthusiastic about raising capital, announcing a big raise and showing these high headline valuation numbers. I think that people have to realize that it also means that you’re giving up a lot of your ownership and diluting yourself when you do that.

There have been, traditionally, a lot of businesses that have been very successful without raising a lot of external capital. With Clif Bars, the original protein bars, I think they took zero, or maybe very small amount of external capital, and they still retain largely all of their ownership and that has been hugely successful for them.

So, it depends on the nature of the business, and also nature to the competition. Sometimes, even though you might not need capital, if your competition is raising a ton of capital and burning through cash and playing that game, you might have to play the game a while to be competitive.

Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.

Obviously, you need a good business idea or product. That’s a given so I’m not going to touch on that. Over the last few years, I’ve worked with dozens of entrepreneurs and looked at all different types of businesses and business models, and I think the ones that are successful, it really hinges on execution. So, I’ve seen many situations where people have a great idea, but they botch it because they’re not able to execute on the plan. And sometimes people are extremely worried about their idea, like, `Oh, I can’t share that idea without an NDA.’ Honestly, the NDA doesn’t matter because you can share your idea with people and most of the time they still wouldn’t be able to execute on it. So, execution, I think, is the key.

Number two, building the right team is really key. There’s only so much that you can do by yourself. Time is your most valuable resource, and you have to be able to find people who are better than you at specific tasks. And that’s how you accelerate a business and gain leverage.

With the third one, tying into finding a good team, is learning how to delegate. Sometimes with founders, some of them try to do it all. They feel like they have the capability to do everything, they don’t need to bring on other people on to the team or bring on advisors. But, from what I’ve seen, the ones that have been the most successful are the ones that have a robust team around them where each person brings something to the table. And they also have a pretty strong slate of advisors. These are not just advisors for presentation slides, but they are advisors that really help the company in each of the aspects because they bring true experience and a depth of skills in their respective areas.

Bringing on the right partners can be really important, too. A lot of times founders tend to do things that they’re comfortable with, and what they’re familiar with doing, and they don’t deal with things that they’re not familiar with. Those can sometimes be very important issues, but they kind of kick the can down the road. It’s a natural tendency. But this ties into my point of making sure to surround yourself with the right people to tackle direct problems.

Lastly, I think financial management is very important. A lot of times, people will focus on product and technology and things like that. But if a business runs out of money, then you have no business. In the early stages — even after you raise a big Series A or a Series B — keeping track of the finances and cash flow is very important. I’ve seen a lot of companies that initially had good traction and messed it up because they weren’t able to manage their cash flow right. That’s where we at Embarc Advisors are able to really bring a lot of value because we can help companies grow while managing that cash position.

Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?

This is extremely important! If you don’t take care of yourself, you are not going to be able to take care of your company and your employees. No matter what people believe, a sleep-deprived person, or an unhealthy person does not deliver peak performance on mental activities. I think is very important — even if it’s just 15 minutes a day — getting in a workout is very important. Anyone can do that 15 to 20 minutes a day. It could just be floor exercises in your living room because I think getting some sort of exercise every days is very important. There’s such a big difference between zero and 15.

Number two, I would say is, you have to sleep! When people go around saying, ‘Oh, I’m only sleeping for three hours a night,’ you actually have to take that with a grain of salt. I don’t think that its healthy or feasible, nor will that person be being bringing their very best if they are actually only sleeping three hours a night. I’ve seen people who don’t take care of themselves, they will eventually break down, they become sloppy and they become emotionally unstable.

It’s detrimental in the long run to operate that way. So, I think it’s very important to build those right habits, and like I said earlier, learning to compartmentalize your work and maintaining the right habits is very important.

You are a person of great influence. If you could start 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 am very passionate about helping children that are underprivileged with a focus on education. My wife and I sponsor multiple children in Central America and Africa through World Vision. I also volunteer with organizations such as Hawaii Rise Foundation that help local underprivileged children and students.

We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

Bill Gurley. I have viewed Bill as one of the most influential and thoughtful VCs. I would love to have breakfast with him and pick his brain on how I can be even more helpful to my clients as they raise capital and grow their business.

How can our readers further follow your work online?

Anyone interested in working with Embarc Advisors for financial consultations can find out more information at our website: https://embarcadvisors.com/. To keep up with the work that we are doing, you can follow us on Facebook and LinkedIn. Of, if anyone would like to connect with me directly, they can email me at jung@EmbarcAdvisors.com.

This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!

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