Ryan Rutan: Welcome back to the episode of the Startup therapy podcast. This is Ryan Rotan joined as always by my friend and the founder and CEO of startups dot com. Will Schroeder will, you know, when things go well in startup lands, sometimes we get to these liquid events, these, these cash events, you know, something's gonna happen, that's gonna change our lives financially sometimes for the better. And in those moments, we've seen this happen where family, friends, people in our circles might start coming with hands outstretched. What do we do in these cases? Right? When we've, we've, we've got to this point where now that thing that we wanted to have happen happened. And now I don't want to look at this as a totally negative consequence, but like as this starts to happen and we prepare for this, what do we need to be doing? What do we need to be thinking?

Wil Schroter: Well, the problem is that when we make some cash, a lot of people come looking for it. I've got a friend we were talking about before the episode. We both have a friend that came out of the NBA and made a ton of money and when you're coming out of professional sports, everyone knows it. I mean, it actually boost your, your earnings here publicly. It's in your E P N headline. Right.

Ryan Rutan: Thanks for that. Right. Yeah, I, I wanted to talk to everybody I haven't seen since kindergarten. I definitely wanted to do that.

Wil Schroter: Which is exactly what it is. And so for us sometimes it's not as public. Sometimes unless it's a really big exit. Chances are no one knows exactly how much money we made. But they know there's something that's

Ryan Rutan: the thing I was gonna say, they know it doesn't necessarily matter how much. Right. And in fact, if they don't know exactly how much that can be worse. Right. Because then they can in their, in their imaginations, like it must have been at least a $500 million like it was 38,000. But ok,

Wil Schroter: and that's where our story begins. So, talking about particularly when it comes to, we, we can say friends, we could add friends to this, but I'm using family in this context, Ryan because I think in this context it's something very personal and it makes it a lot harder to kind of disconnect from you can lose friends, but you're kind of stuck with your family forever this hardy. Right. Otherwise, so I think it's important for founders to get a sense for when they have a wealth event. How do you deal with family? Now? We won't pretend to tell you what you should do with your family. That's a personal decision and not our, our position to talk about. But what we can talk about in no uncertain terms is how a gazillion people before you have tried this and failed miserably, including the two guys on this podcast. So I think what would be useful is to talk about where this happens, how to get in front of it. If you can also what to expect, you know, what do you expect those reactions to be? We think that we're gonna start off being Robin Hood just giving money to, to everybody and you know, everybody's gonna love us. It doesn't end that. It starts that way. It does not end that way. And I think that's worth diving into for

Ryan Rutan: sure, for sure. All right. So what are we talking about here? Well, are we talking about just uh big liquid events? Are we talking about perception? Are we because I, I've had this occur in a number of different ways all the way down to things actually weren't going that well, but people around assumed that they were right. That was the funny one for me. I had a family member come to me and go, you know, we, we've got this situation and, and obviously, you know, you're in the best position to handle this. And I was like, looking around like, wait, is there a bucket of gold in the background? I didn't know about like, what obviously what's obvious about this, like, obvious I'm trying to keep it afloat. Like everybody else is, you know, it was early, early twenties and like I was being approached and like, it's, it's not the case. So are, are we talking about everything's on the table here? Like kind of across the board? They can come a call in whenever or is this actually in the event where we do have the ability? Because that, that, that entirely changed the dynamic.

Wil Schroter: Yeah. Doesn't even matter. Let, let's see, even like extend this as much to what it means to give money to family at any given point. Now again, you tend to get overrun during a wealth event. I did, but I don't think it's necessarily limited to that. I'll give you an example. Let's use some context so many years ago when I was starting my career, I was fortunate enough that the company took off pretty quickly and I started to make some money and I did what essentially you're not supposed to do, which is I told everyone about it because I was so proud because I was so broke and all of a sudden things turned around and I was like, yo, look at this, this is incredible, right? Don't you want to share it with me? And I didn't mean quite literally, I'm in the excitement, in the

Ryan Rutan: excitement, not the routing number, just the excitement.

Wil Schroter: Yeah. And So here's what I did this, this biggest jackass move of all time. I go out, I buy a bunch of expensive stuff. A new house, Lamborghini, all this cool stuff. And then I fly my entire family and I'm not knocking any of them in this, by the way, you know, I love you guys but I fly my entire family in to revel in this victory thinking like how cool it would be not thinking, why the hell would they wanna fly in from wherever they are around the country to hang out with me in my victory dance? And then we broke otherwise, why would they want that? Right? That was obvious when I say it now I had a different vision in my head. Of course. Yeah, here's what happens. I telegraph to the whole family that I've got some means they do not, you know, most of my family is not doing well. And so after that point, they're all thinking, hey, if I run into a problem, I now have rich cousin, uncle, you know, uh son will whatever. And I thought, hey, do you guys got a problem? I got some cash now I can take care of you. And I thought of all those times, Brian, all those times where I was down on my luck where if I had a rich uncle, cousin will et cetera, that it would have been awesome to be able to call up, help me out so I could make it through college or I could do something actually pretty meaningful. Maybe not. Maybe I would have called for dumb reasons. The point is I thought it would be great to be that person and that's how this starts. We all start with noble intentions. We all start with thinking I want someone else to do well by how I've done well, what we don't think about are what those costs actually are. And it's almost like this rite of passage among founders that we all go through this ridiculous journey and we all come out almost exactly the same way. We all think it was gonna be a good idea. We all come out with lots and lots and lots of advice to give.

Ryan Rutan: Summarized as the word. No, right now that that word will save you. You could just, if you just hear that we're just like, just know, uh you can stop listening to the rest of the podcast. But if you're still intent on thinking about right doing this, then keep listening. We'll keep giving it to you. But yeah, here's

Wil Schroter: what happens. I sit down with a founder, let's say a new founder. It's going through this for the first time and I actually did this last week over dinner and we're having discussion and they say, hey, I'm gonna have a wealth event. My first thing is, have you prepared for how you're gonna deal with your family and you know, extended loved ones, friends, what have you. And they're usually like, yeah, you know, I'm gonna give this person this, they're gonna give this person this, I'm gonna give this person this and I would say the same thing, I'm not here to tell you what to give to whom I, those are my relationships. So I can't tell you what I can tell you. There's been a long, long, long, long line of people before you that have done exactly this and it's ended poorly for like 99.9% of them. And here's why the beginning I say is, remember, you don't owe anybody anything. And we did a whole episode on this how you didn't win the lottery unless you won the lottery in which case, whatever, but you earned it. This is fortune. It's not luck. Luck is when you play blackjack or you hit the powerball lottery. Fortune is when you work really hard at a specific goal and it goes your way right. You don't win the Super Bowl by being lucky. You actually had to work harder than everybody else out and perform better in order to win the Super Bowl. Luck doesn't win anything. And so always say that because I think part of what it's instilled in us is that we were lucky. And therefore it only makes sense to share the bounty of our luck with other people almost like we don't really deserve it because we didn't really earn it and that's bullshit. You know what I mean?

Ryan Rutan: Yeah. Yeah. Yeah. No, I, I think it's, it's easy to get caught in that trap though. Right. Especially if you're looking around at people who aren't doing as well or aren't suffering. Like, look in the last, and I know you've probably been hearing this story more in the last couple of years as the macro environment has taken a shit all over itself, right? Starting with the pandemic and everything else. There's a lot of suffering, right? A lot of people suffering in a lot of ways and in a far more public dialogue than ever before. I think people became more comfortable talking about because everyone was going through this shit, everybody was comfortable talking, talking about the fact, you know, they're not doing well, whatever. So if you are one of the outliers who in that same period did quite well, there was additional pressure, additional, you know, contrast between you and those people around you who you may or may have wanted to help, right? So it's made it significantly more difficult in the last couple of years. But to your point, nobody's owed anything right? And it doesn't mean that you don't want to do things to help. But I think that what we're trying to, yeah, you wanna do, right? Yeah, you wanna, you wanna got to come to an understanding of is there's still like maybe we'll use the oxygen mask analogy here. Right. So we've certainly seen this. You and I both have, have examples of people close to us personally who have overextended themselves while helping and then ended up in dire straits themselves. Right? That's the, and guess what, all those people you helped weren't there to bail you out at the end when you were now a destitute, right alongside them. They're like, yo, thank God I gave Uncle Ernie, you know, that uh $750,000 turns out he didn't actually need that for medical bills. He took it to the race track, but he hit the trifecta won $5.5 million and now he's bailed me out. So, you know, all things considered it was worth it. Right.

Wil Schroter: Yeah. Yeah. Well, ok. So, so let's, let's play up the first point. The first point is to make it clear, it never ends. Once you break the seal of giving away money, it never ends. In fact, the moment you break that seal, it's like pushing this giant boulder down a hill and then trying to stop it, it gets worse and worse. Actually, probably a snowball would be a better metaphor here because it just gets bigger and worse the entire time. Here's what it looks like. Here's how it plays out and if you're going through this now you'll probably be nodding your head and if you haven't turn the radio up because that's just important, it starts like this. Uncle Shaggy needs some money. Right? Uncle Shaggy's been a little bit down on his luck. You have a good relationship with Uncle Shaggy. He's a good dude and he reaches out and says I need some money and he says, hey, you know, can you loan me? It doesn't matter the amount it's called $1000. The amount is actually inconsequential and you say sure, no problem. That's actually, you know, if it's money I've got on hand that I never had before. I would love to help you out. You know, appreciate where you're at. Cool. Now, here's what he does. He goes to your Aunt Velma and he goes to your cousin Daphne and he mentions the fact that you helped him out. He's actually, you know, singing your praises, which is the worst thing that he can possibly do. The best thing Shaggy could have done is keep quiet about it. All right. But he shares that fact that of your generosity and, and, and again, in this case, he's actually complimenting you, but it doesn't end like that. Now, guess who the next two people that are calling you are right now. Here's what happens.

Ryan Rutan: Do they all ride in a mystery van? I knew it. I knew this one really have an Uncle Shaggy. I thought we were keeping the names out of this. Shaggy

Wil Schroter: is a giveaway. So, but Velma calls, right? And she's like, look, I really appreciate what you did for Shaggy. She's gonna warm me up. I really appreciate what you did for Shaggy. To be honest, I'm kind of in a similar situation myself. I could really use insert value here. Here's where it starts to break no matter what, what you pick on this, choose your own adventure, you lose. If you choose option A which is give Velma money you lose because now you've just opened that thread from now on. If you choose option B, don't give Velma money you lose because now she thinks you're an a hole. Now she tells the family how she was in need in the same amount of time that Shaggy was spending singing your praises. Let me tell you when people are upset, they sing a lot more and she's talking to a lot. How dare he, how dare he say that he will help out Shaggy but not me. Right. How am I worth less? Is our relationship not good? And here's the fun thing, Ryan. Five seconds ago, your relationship was fine before she made that phone call. Your relationship was just fine. She torpedoed the relationship.

Ryan Rutan: Exactly. Not the way she sees it. Yep. Yep. You're at fault.

Wil Schroter: It keeps going. Now, cousin Daphne calls because she's thinking, ah, maybe that was just Bema. Right? Maybe that was just Bema. And now she calls and she says, hey, you know, I could really use help with this thing and it's pretty important. She understands someone was turned down. So she has to make sure that you really understand the gravity of it. And you do once again, two options. Both of them you lose. Right. If you give the money, which most people do, you've now started a thread with her, which we'll get back to in a second if you won't give the money. Now, you really look like an A hole. Now, you have two people and keep multiplying that by however many family members you have. Right? That's how this actually goes. Now let's get back to Shaggy Shaggy, who's up till this point in the story is the winner of this whole thing. Only su su your praise is right. A year goes by. I don't know, maybe two years goes by doesn't matter. Shaggy comes back to you. He said, well, you're not gonna believe this X Y Z just happened again. I need a little bit of cash. Here's where you're at. If you say yes, you now have to say yes. Every single time. Why? Because you've already done it before. If you gave it to him before, why wouldn't you give it to him again? And instead of the benefit of trying to help him out, you now have the detriment with him and every single other person of explaining to them, why you're not gonna keep giving them? How do I know this? Because I did it for 20 years. In fact, I didn't stop doing it until my wife came along. And she was like, dude, do you know you're writing checks like every month to somebody? And I'm like, no, no, that's, I'm just, you know, that one person needed a thing. No. Literally,

Ryan Rutan: I have, I have it printed out right here. Yeah.

Wil Schroter: Oh my God, man. She said two things that, that really struck me and I'll never forget sitting in our living room, her telling me this and I was just so beside myself, she said one, has anyone ever paid you back? And I was like, well, I mean, no shit, no. Uh OK. The second thing she said, has anybody ever really said, thank you? Not when they hung up the phone, did they ever come back to you later? And actually thanked you, show some gratitude appreciation. And I tried to think of every single situation that I was in every single situation where I did something. I don't, it doesn't matter whether I bought dinner or whatever, right? And again, this is among friends, family, a lot of people because I had helped out a lot of people over a long period of time. And I was like, damn, dude, I can't think of any now. I'm sure someone did, right? I mean, my memory isn't exactly my friend, but it didn't stand out like one of those I got this, you know, long email or letter or phone call from someone just expressing gratitude. It's

Ryan Rutan: not framed on your office somewhere.

Wil Schroter: Right. Yeah. No, but I got an awful lot of I O US on that frame. I had a lot of I O US and I was like, damn. And she said something and again, she was just a catalyst and I'm not gonna put it on her because I should have known this. She said at this point, what would make this stop, given what you've done? How many times you've said yes. How many times you've enabled behaviors? Why would it ever stop? And I had no answer in that was just mind blowing. I like she saw it obviously because she came to the situation fresh and she was like, dude, you're getting taken advantage of. I looked at it being like I'm just doing it for so long, I lost sight of it. You know what I mean? You know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you, which means the answer already exists. You may just not know it, but that's ok. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups dot startups dot com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it.

Ryan Rutan: Just lose track of it. Yeah. And look, I think there's, there's a several fold problem there once, like, once you start it. Right. Like, then how do you stop? Right. How do you say no to one person when you've said yes to somebody else? I think it's worth noting, like, when people need something they can be deeply manipulative. Right. So, uh, we'll go back to your, whether

Wil Schroter: they expect to or not. Yeah.

Ryan Rutan: Yeah. Whether they expect you or not, they're just, they're doing what they think they need to do because they weren't coming to us asking like, hey, you, you grabbed me a Rolex like it wasn't that it was like, hey, we're not gonna make ends meet or hey, we can't make the twist pit, whatever. Like it was, you know, it was important stuff and of course you want to help, but it can be insanely manipulative to go back to your example. I guess this would have been, wasn't Velma coming? It was Daphne coming, right? So I had already said no to a subsequent ask. I had helped and then I said no to someone else and then a third came and referenced those two as leverage, right? And basically said, like, look, I totally understand why you weren't able to help Thelma. What is Velma Velma? I, I need to, I need to review my eighties cartoons. You're mixing movies at this point. I know, I know like, yeah, where's Louis? That's how this one ends with us going off the uh off the cliff in a car. That's how, that's how all this ends metaphorically. Yes. So that is how we should do this. So in any case, the third one came and, and basically referenced those other two, like, you know, of course, you helped Shaggy because of this and you know, that was great and I understand totally why you couldn't help. So and so, and I get that you'll help me because of it. And it was like, oh damn, like you went deep here and assumed the sale. Which clever but damn, that's evil.

Wil Schroter: Right me out. Yeah.

Ryan Rutan: Yeah. It just, it feels awful. And again, like you want to be able to do these things, I think there's a level of addiction there once you've started and you've begun to do this and look like nonprofits, you know, deploy this tactic all the time, right? Once you've given, once they keep coming back to you and saying, right, I get the email every year from Wikipedia, thanking me as like one of the eight people who donate every year and, and reminding me that, you know, I'm unlike 98% of their users, I'm special, right? Oh, good. I wanna keep being special. I'll keep giving you or

Wil Schroter: said differently. Everyone else is awful. Yeah. Here's the thing to your point, right? They see a pattern of behavior. And now unless you follow the positive pattern of behavior, you're an A hole and you being an A hole. This is just the beginning. See, because all we're talking about it is where you're an a hole at the point that, uh you said no to somebody, trust me, this goes on and on and on. Here's some examples of how many opportunities you get to be an A hole from here on out. You're sitting at Thanksgiving, let's say, and someone's talking about how their car broke down and how they can't afford to fix it and how blah, blah. Meanwhile you're mentioning prior to that this sweet new Lamborghini that you got right now again, those were two different conversations, right? But they overheard it, you know how they processed it, fuck you. That's how they had processed it, right? So instead of being just the fun person that gave everybody hugs, et cetera, you're fuck you person now. And like it's like damn dude, what did I even do there? You might say, well, well, don't talk about that stuff if your family, if you know they have issues, et cetera. Cool. You know how many things you have to censor in a conversation to be 100% sure everything because everything can be mapped back to where you have the luxury of doing something and someone else doesn't, I'm not talking about the repair bill on your Lamborghini. I'm talking about literally anything And so, yeah, this thing gets its over and over and over. And if you look at lots of families where someone has made money, you always seem to have someone who just disconnects from the family, right? The patriarch kind of like disconnects from the family and, or the uncle that made money disconnects from the family. And it always happens and everybody just assumes that person's a total a hole. Maybe they are. But generally speaking, it didn't start like that. It started because they started to feel disconnected, right in an awful way. And so when people think, oh damn, you know, this won't be an issue, dude, it's an issue whether you give the money or not, right? You know, this is, this is hard coded, the relationship changes whether you like it or not. You know what I mean? It's just

Ryan Rutan: it to some degree, it, it comes down to just a little bit of jealousy and it doesn't take a lot either, right? And it doesn't have to be monetary at your point. We, we talked about this a little bit before we kicked off the episode uh live, but it can occur over just even how you get to spend your time. And again, some of this is just perception, not reality, right? Like the family member that came to me early on and was like, hey, obviously you can handle this. You are reading the situation wrong. My company is running me not the other way around at this point. And so this happens in a, in a lot of different ways, but let's circle back to something that you, you said earlier, which was, you know, there's a bunch of I O us hanging on the wall, right? And I know you meant that metaphorically because I don't think we ever, we ever done documented any of this, right? I would have to like go back and mentally tally who and, and where I've given money to because I haven't documented, it clearly wasn't treated that way. Generally presented is like, you know, could you lend me some money until we get through, could you help us out with this until? Right? There was almost always some follow on circumstance that was going to change their lives that then they wouldn't need the help anymore. Oftentimes with either an implied or even like a direct statement of repayment. I don't know how your mileage has gone on that, but I have yet to get any money back. Right. I haven't asked for any either. I have. It

Wil Schroter: would be the worst bank

Ryan Rutan: ever. Yeah, I've gone, I've gone to Exactly nobody and said, hey, remember when I gave you that money, you know, and you called it alone, you said, lend me some money, you know, help me out for now and it's time now, you know, it's been 14 years now would be a great time to, you know, kick that back. I've got some stuff I wanna do with it. Never had that conversation, never asked, but neither has anybody brought it up to me nor paid me back a dime.

Wil Schroter: The other thing we'll talk about is not only it never ends, it's never a loan. We wanna believe that it looks and feels like a loan and it's always presented as a loan. It's always presented as, hey, will you loan me some money? I need $500 for something. Will you loan me some money? Because saying straight up will you just give me your money? It just makes everybody sell me a jerk. So no one does and to be fair sometimes that's the intention. Hey, you know, I'd love to go to, to Uncle Ryan. He let me borrow some money and I can take care of this one thing and I'll just pay him back. Now. There's a couple of things to note. Generally speaking, depending on who you are in life, you probably can't pay it back. That's one piece who you were an unsecured creditor. You know, just saying like banking terms, you were a very unsecured creditor. And so the moment I lend someone money, let's say that Uncle Fred calls and Uncle Fred, the only person we, we haven't used in the mystery other than Scooby, Uncle Fred calls and he says, hey, I need to borrow $1000. Cool. Ok. Now a couple of things are at play there. He used it in terms of I need to borrow because asking to borrow money doesn't sound that nefarious. Asking to borrow money implies a little bit of nobility that I'll actually pay you back. Cool. So it's an easier way to take my money. And again, I, I know I'm sounding like a, a little bit off here. Like, wow. You know, he seems like really angry about this subject. It's not, I just have watched it so many times with so many people. We've

Ryan Rutan: seen a lot of people put through a lot of really undue pain over this. People who didn't do anything to deserve being ostracized by their family and yet now they are right. They became the a hole at Thanksgiving. Why? Because they gave some people some money and then they didn't. Right? OK. Well, are you mad at everybody else who never gave anything? No, they were just noble and stayed their path and just didn't have any resource. Yeah, they're cool, cool that they never ever made it great. Yeah. So that, so if you're hearing, if you're hearing an edge to our voice today, I think it's because it's partially because of personal experience, which of course does form an opinion and, and does shape how we feel about things. But man, we see this play out so many times with other founders that we talk to and some of them have like, I haven't been deeply wounded by any of this. And I certainly haven't taken that additional step of going into, you know, full debt myself and needing help. But we've seen people that have had this happen, right? They were very generous to people around them and then their turn to pay the piper came up and it didn't go well and there was nobody there to support them. Right. That leaves you feeling both betrayed and desperate and it's just I, I hate seeing people in this, in this situation. So I think, you know, as you're hearing any vitriol, any, any edge to our voice today, it's not necessarily personal experiences having watched this played out across dozens and hundreds of founders at this point. And just, it's bad. It's bad for your folks.

Wil Schroter: Also, the other side of it is, look, if you're gonna do it, do it, just know what you're signing up for. Just know what you're signing up for, right?

Ryan Rutan: It's not alone, it's not coming back.

Wil Schroter: Ok? So, so Uncle Fred calls and says, hey, I need a loan, I need $1000. Cool. It's a loan. It's exchange of money. Everyone understands that I'm gonna get my money back will be even at the end of it, right? Except you won't, you're never getting paid back because here's what's going to happen if Uncle Fred could have made the money himself or, or gotten the money himself, he would have if he could have gone to a traditional lender that would have based it off of his credit, et cetera. He would have no lending is not fair to

Ryan Rutan: everybody. There's a reason they came to you.

Wil Schroter: Yeah. Yeah. Yeah. Lending is not fair to everybody. I was in a place in my life where I couldn't get a loan from anybody so I get it right. I get it. But here's the difference. I take your money and now a month goes by two months goes by whatever your time period where those payments are due. Here's what actually happens. Fred calls you up and he's like, oh man, ok, listen, I got you. We're good, we're good. Your money is, is is good as cash in the bank but I can't cover you this month and you're like, oh man, don't even worry about it, you know, it's not a big deal to you, right? You're not too worried about that $1000. Month two goes by and he still hasn't made a payment yet and he's like, hey, listen, I can't do it this month but I can definitely do it next month. Sob story, sob story and you know I've got you covered. Cool. But it's awkward by that point it's awkward month three goes by and now you're just gonna get a curse text, right? Just something that's basically minimum viable answer for what you're also not getting paid this month from this point on two things happen. Number one, you're not looking forward to these interactions anymore because the, that

Ryan Rutan: sucks. Oh, man, I remember being so relieved when I just stopped getting them. Like once it got to the point where it was just like you get to that third month terse, like things are still shit, sorry and nothing else. And that was it. I was just like, oh, ok. Well, hopefully next month there'll just be nothing like that. It's preferable at some point, right? Like it's not what we wanted. It's a victory compared to the, the constant threat of excuses. Right? When you said you got me covered, I didn't mean for you to blanket me with excuses about why you're not paying me back. I really just do not pay me back and not say anything at this point.

Wil Schroter: If you ever, ever, ever, ever want to assure that you can end a relationship, loan, that person money, we guarantee

Ryan Rutan: it will come to a head one more time again.

Wil Schroter: So it's Christmas morning and Fred's waking up. He's got a bunch of calls to make because he wants to wish people merry Christmas what he who he thinks he's calling first, his buddy that he hardly knows and could give a shit less about calling or you who he owes money to. I guess you're never getting a Christmas call again. And that's how this develops because loans aren't loans. Loans are someone, uh, you know, look a loan is when you give it back, right? When you don't give it back, you're just taking money. That's either a gift or a theft, depending on, you know, and how you feel about it. And so for us again, as the person loaning the money don't loan money, you may give it to people. At first, after I had not gotten paid paid back like 100 times, I realized that all I was really doing was giving people money, which by the way, Ryan reduced its own challenges, particularly among men. By the way, men have like this ego thing, right? Where? No, I'm gonna pay you back and like, bro, I know you won't but just giving them like a handout.

Ryan Rutan: That's the thing like they, they need to say it, they need to feel good about it when they take it. So it's, it's their own ego that's insisting that it's alone. They had

Wil Schroter: a selfish pride.

Ryan Rutan: Yeah, selfish pride. Uh That look, I get it. I get it. Nobody wants to be dependent on somebody else, right? Even if they

Wil Schroter: are just so I'm not totally sexist about this. That was just my experience, right? Women were just cooler about it. Like I don't know how else to say it, right? But men were, were almost like this confrontational like arm wrestling transaction that it had to be and I was like, I, I just give you the money like we just get beyond this because it's making me super uncomfortable. Now, get this fast forward. Way beyond this is where I really want you to understand how this snowball compounds. You've now lent Shaggy Velma Daphne and Fred money. None of them have paid you back. Maybe one person paid you back a little bit. Now it's Thanksgiving and you show up and everyone in the room owes you money and everyone in the room hasn't called you in forever and everyone in the room had excuses of why they can't, uh, give it back to you. Here's where it gets really cool because number one, you probably didn't even get invited to, to Thanksgiving, pretending that you did. You show up. Now, everyone's filtering every bit of their conversations. They can't talk about how they're doing well in anything because that means you could pay their money back. Right.

Ryan Rutan: Exactly.

Wil Schroter: Exactly. And so they're avoiding conversations with you and what, they're also avoiding it with your wife, your kids or anybody else that might talk about their ability to repay back. Imagine going to dinner with all of your creditors and how fun that conversation would be right at dinner. That's essentially who you are to them at this point. And it sucks. And even if you try to be really cool about it, which I know I did and I was like, you know, don't worry about it. You know, it's, it's water on the bridge. What have you, that's not the way they feel about it. Because what they'll typically do. And again, I'm not speaking to for me from what I've heard, they demonize you instead of saying or vilify you. They say what a rich asshole Ryan is. So they want to come up with a reason why you're in the wrong. So they can just feel better about basically having taken your money. And it happens all the time that said like we were saying, we hope it doesn't happen to you. None of this happens to you. Here's the way it was one way to actually attack it. This is kind of, you know how we wrap and focus. I went to my family and I instruct lots of founders to do the same and use the same exact words when someone asks for money as, as early on as you can, especially if you're just getting into this straight up. Say I don't wanna have a financial relationship with you. I'm down for everything else. If you need me to help you move and carry your stuff, call me, I'm there. If you're having a tough time in life and you just need somebody to walk through stuff, make sure I'm the first person you call, I'll walk you through anything. I've got your back just like every other family member hopefully does. I just don't wanna be your bank. I don't wanna be your credit card company. I don't wanna be your auto lender. I don't wanna be that person because I don't wanna come around collecting for people. I just don't wanna have that and I think that'll ruin our relationship. And if I'm being honest, like, when I went through it in my life, people actually took it pretty well. Like they were actually pretty cool about it. Now, maybe they told me to go f, myself as soon as I hung up the phone. Probably. But, but it did change the dynamic of the relationship and I haven't lent a penny since, you know what I mean?

Ryan Rutan: Yeah. Well, and it, yeah, was that, that's the, that's the important part, right. Which is that it, it had its own circumstance. But what it didn't have were a bunch of knock on circumstances that continue to snowball out of control. Right. Yeah, I, I think the other, the other thing, I think that's, that's sound advice. Right. Like, just, you know, putting it out there that you don't want that type of relationship. I dealt with this slightly differently. There were a couple of situations where even after knowing better, I continued to, to support some folks and then, you know, and again, like, because I didn't feel like fighting their egos in the moment to say no, this is just a gift. This isn't a loan. They insist, ok, it's a loan after 678 months or whatever it was, you know, the time period had lapsed where they were supposed to have started paying it back. They said, you know, I just need three months and then, you know, we're gonna move, we're gonna get this new job, we're gonna refinance whatever it was. I went back and formally formally forgave the loan, right? I didn't use the word forgive because that sounds a little over the top. But I basically said, hey, let's close this out. You know what, I'm in a position right now where I don't need that back. I don't want it hanging over your head. I don't want it hanging over our heads. Collectively. I don't want you to have to feel differently about what's going on in your life. Like you can't tell me, hey, this is really exciting. This thing's happening or like when we got to the dinner that you can't order appetizers because you haven't paid me back yet because fucking owes people money and orders appetizers, you asshole. But you know, so it's like I, I took

Wil Schroter: it off the table, I'll take it to go back. I

Ryan Rutan: took it, I took it off the tail. Yeah, like you're not eating all that. You're gonna put the sugar in your bag. You still owe me money, you shit head. Um you better milk this for all it's worth. So I I that helped, that definitely helped, it helped to ease those really. So if, if that's more of what you're worried about is like how it impacts the family dynamic. There are definitely ways to both give and not become completely ostracized. Now, it's not as controllable as just not giving the money that is by far, prevention, far easier than maintenance, repair or cure here. But I have had success with that as well where it just took a bit of over the top communication with people to say, look, this is what it was when we decided to do it. This is where we're at now. Nothing's happening. I'm ok with that. I want you to know I'm ok with that and I want to know that you're ok with that too so that we can just move on and have a normal relationship to the extent that that's possible with anybody you're actually related to. I

Wil Schroter: agree. I'll tell you what, let's caveat this, let's caveat this kind of a post script to say, giving money away, whether it's a loan, whether it's a gift however you do, it is a personal decision. We're not here to tell you what to do with your family, do what you will. All we're here to tell you is that what you're about to do or have done has been done for generations before you by lots and lots of smart people who all expected a different outcome and generally didn't get it. All we're trying to convince you is that there are consequences to this, that when this comes up, that this isn't quite as easy as it sounds and it doesn't make you Mr High five guy the entire time, there are consequences to doing this. And so long as you recognize the consequence, so long as you understand the long term costs of doing this and how you plan to deal with it, you should be fine and honestly, from Ryan and I, we actually hope you are. So in addition to all the stuff related to founder groups, you've also got full access to everything on startups dot com. That includes all of our education tracks, which will be funding customer acquisition, even how to manage your monthly finances. They're so much stuff in there. All of our software including BIZ plan for putting together detailed business plans and financials launch rock for attracting early customers and of course, fund for attracting investment capital. When you log into the startups dot com site, you'll find all of these resources available.