070: Accelerate Financial Independence with Tech Equity - Christopher Nelson’s story

00:00 - 00:19 | Christopher Nelson: As a technology employee, you can trade your time and talent for equity as a wealth building strategy. It's important that you think like an investor. You're going to look at yourself and say, what am I bringing to the table as the asset? What is my value? I worked many years of consulting, built a ton of value, and then went for the trade.
00:19 - 00:40 | Fred DeWorken: Welcome to Tech Equity and Money Talk. I'm your host, Fred DiWorkin, and this is episode number 70. You may be thinking to yourself, what in the heck is going on? Where's Christopher Nelson? Well, today we're going to turn the tables and I'm going to be interviewing Christopher because he's got such an amazing story to tell and I want to give him a lot of space and time to tell that story to us.

00:41 - 00:57 | Christopher Nelson: So Christopher, how you doing, man? I'm doing well, Fred. It is definitely different being on this side of the table. But I appreciate you leaning in. And I know you have been somebody who's just been really curious about my story, wanting to get it out of me. Thanks for driving this opportunity.

00:57 - 01:26 | Fred DeWorken: Absolutely. And I'm honored that you'd invite me on to host your podcast and be able to interview you. So thank you very much for this chance. And I'm curious, we've talked quite a bit about you and your career. You're a really accomplished dude, man. High-flying Accenture consultant, three IPOs, not nominal brands with Splunk and with GitLabs and with Yext. How did you start the whole journey into tech? What was it that initial spark that got you into tech?

01:26 - 04:06 | Christopher Nelson: Well, so I'll tell you this story. It's one that doesn't come out a lot because a lot of people don't realize that it took me a long time to graduate from college. It took me in the neighborhood of 14 years to actually, between when I started my degree right out of high school, took a ton of time off, and then when I finished my degree, And in that period of time, I was actually apprenticing to be a restaurateur. I was working underneath a gentleman to be a restaurateur in a high-end sushi, and it was Asian fusion cuisine in San Diego, right near my University of California, San Diego, in La Jolla. And while I was there, we had the opportunity to work on this project in the late 90s, where people that this this tech startup wanted to actually create the first virtual menu. Because we had this food that was very picturesque and people could photograph it, it would look great. And so we worked with this team, we had these digital cameras that at that point, the digital cameras cost $10,000. I mean, today, right, you can buy them off Amazon for 100 bucks. And so we took photos of all this food. We loaded up all the menu items. And there was a touch screen that I thought was really cool. It was very early, because it was still a cadmium ray tube screen that had this touch capability. And when we brought it to the executives at the, this restaurant was owned by the Hyatt hotels, we brought it to these Hyatt executives and showed them this. I felt in that moment that while I was the lead on this project and I was presenting it, I wasn't given a lot of credibility because I was this guy who'd come up through the ranks, but I didn't have this college degree behind me. And it was really this very impactful moment that made me realize two things, fundamentally, is I love technology. That experience on that project of creating and leveraging technology and creating something that could bring to life a menu was super exciting. And then the other thing I realized is that I needed somehow to formalize what I knew in terms of a degree to be able to get credibility. And I wanted to break through that glass ceiling of not having a degree. So it was really that that I turned the corner, went back to UCC San Diego, ended up getting a degree in cognitive science, computer science. And that's where that's where this story really starts. Wow.

04:06 - 04:12 | Fred DeWorken: Wow. 14 years before getting your degree and then you go into cognitive science and computer science. That sounds pretty intense.

04:12 - 05:45 | Christopher Nelson: It was one of the hardest things I ever did. I mean, here I was in my late 20s going back to college with all of these 17, 18 year olds or, you know, 19 year olds that were very smart. And they were standing in line with the professors to try and get the A's. And I just literally wanted to pass some of these courses. But there was this really impactful moment. I'll never forget where I was sitting in this. I had to take advanced calculus. And it had been years since I took calculus. And I was really struggling in this class. And the professor's name was Ron Evans. And on Fridays, he would come in and he would sort of give us lessons that he learned in his life. And he gave us this talk about persistence. And he said that he got to be a professor of mathematics at University of California, San Diego, by persisting that he wasn't always the greatest, he wasn't always the best, but he was able to continually pick himself up off the mat and continue to move forward. And when he gave his daughter the going to college speech, what he said is that the greatest attribute you can have is persistence. And so I ended up failing his class. But I went back and I took the same class again, and that's when I got an A in that follow-up course. And then I ended up taking multiple advanced mathematics courses and really finding my passion for it again. But all of that wouldn't have happened if I wouldn't have persisted. That's amazing.

05:45 - 06:11 | Fred DeWorken: So you go out of college, you get into the tech world. I imagine as a consultant, what's that look like? And then when you're in the tech world, you know, 90s equity wasn't necessarily in the zeitgeist, right? Everybody was working for the gold watch at that point. Even the people who were in HP and things like that, they weren't necessarily thinking about equity. What was that aha moment for you when you realized that I could turn this talent that I have into tech equity?

06:11 - 08:08 | Christopher Nelson: Well, so I went to college, 98 to 2001 is when I did my second stint at UCSD and ended up getting my bachelor's degree in June of 2001. So it was a very interesting time because I saw so many people. It was interesting because I was an older student, I could relate to some of the older students. So I stayed in touch with people who had graduated, who went to the Bay Area and were getting some of that the end of that dot-com boom. We didn't know that it was gonna go bust in 2001, but I saw and heard some people doing amazing things, and then we had the bust. And at that point, right, everything seemed really risky, right? There was all the messaging around working for equity at that point, and some people had won big, some people had lost horrendously big because they'd purchased a lot of options and they were upside down and they owed a lot of money to the government. So I think coming out of school, I knew that the technology industry was a growing industry and something that I wanted to be a part of. But what I wasn't sure that working for equity was for me. And so that's where I actually chose to go to work for Accenture, somewhere that I could grow my skills. And I think for me, I came out immediately and started getting exposure to working in CRM systems. And in PeopleSoft was was the CRM of choice back then. And then things really changed for me in 2004 when I had the opportunity to be part of the cloud revolution and start working on the Salesforce.com platform. I was one of the first. It was a team of 10 people that actually went and got trained at Salesforce. We were white label for Salesforce for a while, and then we started doing implementations to the to the enterprise. And what I realized is that when you start understanding and can leverage these bleeding edge technologies early in the space, that can really help accelerate your career.

08:08 - 08:31 | Fred DeWorken: That's absolutely fascinating to be at the bleeding edge of something as consequential as Salesforce within the first cohort of 10. And in that same moment, maybe you don't realize what your value is. Right. Tell me about how do you maintain your value? How do you estimate your value correctly in this environment where you do have an outsized amount of risk? It could be bust. It could be boom, right?

08:31 - 10:11 | Christopher Nelson: Well, and so to your point, I understood my value in hindsight. But what I saw and I think what people can see in front of them is when they start working in a new technology, is number one is you start looking at the rate of adoption, like how many people are starting to use it and how is that technology being adopted. I think for myself, what I saw after a few implementations is that the amount of implementations that pipeline was building. In what I saw for myself selfishly, which I think we do in our careers need to be selfish in some sense of what's in it for me if I'm building these skills is it was able to unlock for me geographic freedom. So all of a sudden I went from a guy based in San Francisco who was doing a lot of local assignments to somebody who was getting flown to different locations in the United States and then starting to get flown globally to different locations because I had this level of expertise. And as simple as it may sound, I started understanding my value by seeing where the type of offices that i was walking into right when you think about a on insurance or coming out here to austin to dell computers in some of these large larger companies that were well known at the time i started realizing wow so i'm actually doing something that these people value this skill this thing that i'm i'm learning has some type of larger value in the marketplace than I may be aware of.

10:11 - 10:30 | Fred DeWorken: That's amazing to go along on that journey in that way from just a passion of technology and now you're actually operating in it and you're realizing your value. Maybe you can provide me with a specific example of when you've underestimated and thinking about across your whole career. Sure. Your value in an equity negotiation.

10:31 - 15:02 | Christopher Nelson: Well, so let's talk about when I made the decision to go work for Equity. Because I think post-2001 and seeing the dot-com bust, you got to realize it was probably eight and a half years. So I worked for Accenture from 2002 is when I started to, I guess it was 2008. the end of 2008, so let's say six or seven years. And in that time frame, I saw people leaving to go to work for equity with mixed results. Some people won. I knew somebody who left Accenture and went to go to work for Google and helped Google go through their IPO. And now they've been at Google for 20-something years, and we know. they've got a bank full of some equity there and they're doing very well for themselves. I also saw some people go and work for startups and then continue to work for startups and nothing really happened. For myself, the impetus was I had gone all in on a side hustle. So I was working in Accenture, and I always had this vision that if I could get some capital together, if I could get a few hundred thousand dollars together or a million dollars together, and I could start purchasing some real estate, I could start Getting these wheels turning on financial freedom that you and I know about you start getting cash flow You start getting asset appreciation all these things So with a friend who we'd done restaurants together back in the day We said let's start some juice and smoothie bars. And this was down 2005 2006 and And by the time we got to 2008, 2009, these things had gone belly up because of the great recession and the financial crisis, because the $4 smoothies were not competing against the $5 footlong subs. And so that was devastating. And so I was at this point where I said, I know I have something of value. I have these sales force skills. Am empty I got it start this dream over again. I made the decision that I said, let me Continue to grow these skills and let me go work for equity Now I had no training at this point of how to go to work for equity So when you say when did you most undervalue your skills? I actually think I don't know if I undervalued my skills what I did and this is a mistake I think many people make is I actually knew the value of my skills. I have these advanced salesforce.com skills What I did is I traded it for fool's gold. I made a poor trade. I knew I wanted to go work for equity. I got line of sight to a company that was doing something very interesting, building a SaaS platform for non-English newspapers in the United States. I was fascinated by the whole thing. You know I have a thing for languages. I love speaking Spanish and other things. So I got to know the CEO. project that we were working on, and so I made the leap. And it was something where I felt aligned with the vision, the mission, but I didn't do any due diligence beyond that. So to your point, I think I've always known the value of what I brought to the table. But what I didn't realize is that in the exchange of time and talent for equity, this exchange i need to be sure on what i'm trading for and so to me where i most undervalued it is i traded i traded it for um for literally nothing and i ended up wasting a year there because once i i started working it was within a matter of months i realized okay You know, we're behind on a lot of these deadlines. There's not a lot of clear line of sight to the funding to try and accomplish a lot of the things. So we're being asked to deliver a lot of things, don't have a lot of the tools. And, you know, after a year of, you know, Red Bull and nursing and ulcer and trying to get this thing over the finish line, I just realized that it was a square peg round hole. This never was going to work. And I actually in that moment, I felt like I'd made a huge mistake. I felt like I'd taken this thing of value that I had and I had then spent it and got nothing for it. And I thought at that point I'd ruined everything.

15:02 - 15:47 | Fred DeWorken: That's where, you know, I'm thinking about the themes with your professor and the calculus class and the perseverance, right? And also the importance of due diligence as a muscle and really implementing that. Now, I would calculate that you're in your mid to late 30s. You feel like you've probably wasted a lot of time by not going to college, that you've You wasted this bullet that you had with the Salesforce skills and maybe they're getting crusty because you went and spent some time with this startup that didn't work out. How did you manage the mental and emotional challenges to that point to get you to the point to persevere and have the clear eyed focus that you obviously have now of honing those due diligence skills?

15:48 - 19:47 | Christopher Nelson: Well, it was definitely a low point in my life. I'm not going to deny like I literally had an ulcer at that point in time. And I was walking away from that company and I was feeling depressed. I was feeling frustrated. But what what I knew at that point and a lesson that I learned a long time ago was you can be a smart person. You can have things that will allow you to be successful, traits of success, but you can also have blind spots. And if it's truly a blind spot, you can't see it. You don't know what it is. And so you have to then go seek help, understand what's in your blind spot. And so for me, what that help looked like was as I was needing to find a way to get my career going again, I called up an old mentor and got on the phone with him and let him know, you know, here was my experience. Here's how I was feeling. And immediately this gentleman spoke into me and said, hold on, we're talking about 12 months here. Right. Your skills still have value. You can go immediately get those things back on track. And when you look at all the experience that you have, it's just a blip on the radar. Like you need to get back in the game. And that literally that conversation physiologically, I started to feel better. It created a lot of mental relief and. All it was was just somebody else validating my value in the marketplace. And it was literally two weeks later that I had another consulting engagement and it got me, you know, sort of back in the flow. So I made the decision to go back to consulting so that I could sort of plan my next move. And I wasn't done. I was not. And this is where when I know for myself that when I start having clarity, that clarity brings confidence. And then the confidence brings commitment. So I was clear again, I have something of value. I had to do the homework. And one of the things that I've also learned to do is when I have something that is a failure or it's perceived as a failure, didn't go as expected, I have to translate that into a lesson learned. And so I did and I have some writing exercise where I looked at the lesson learned and I realized I led with my heart, not my head, meaning that I was so impassioned by this project and what what I thought the change we could make. And I think a lot of people get into this, too, is I was excited about the change we could make, but I didn't look at the underlying fundamentals of the company. And so the other thing I did is I wanted to get data points. And so this was 2010. I was on LinkedIn. And I started looking at people's profiles who had worked for early stage Google or Netflix or Amazon. And I started direct messaging them saying, hey, would you jump on a Skype call at that point in time? There's no Zoom back then. You're on a Skype call. You're Skyping, baby. And I want to try and understand, if I saw somebody that went from Google to Netflix to Amazon, or you start seeing some of these great companies lined up, I wanted to understand what their thought process was. I wanted to lean into that. And this is where what I learned from everybody is that all of them had some level of due diligence process. All of them had some way that they looked at the product. They looked at the leadership. They looked at the company. And I realized that I didn't have that. I needed this due diligence process. And so that's where then I formulated a due diligence process. And then I started going around and looking at companies because I realized that I had the valuable skills, now I just needed to find the right asset to invest in.

19:47 - 20:03 | Fred DeWorken: Right on. Walk me through that diligence process a little bit. And it strikes me as, man, have you ever considered a career in sales? Just cold prospecting people on LinkedIn. That's right. Hey, let's have an information interview. Let's talk about your path.

20:04 - 23:07 | Christopher Nelson: That's pretty commendable. Well, yeah, there's plenty of directions I could have taken my career. I did wind up in IT, so I guess that makes me a masochist in some sense. But I think the due diligence process that I had at that time, I mean, I went back and I took notes from everybody that I spoke with, and then I also went back and reflected on the, you know, how I learned to to do stock picking when in the 90s, like I started my investing journey, really investing in individual stocks. And I'd learned a lot of that through the Motley Fool. And so what I did there was I went back to some of their lists. And I think it's relatively fundamental. Number one, you need to look at the product and you need to understand what problem does it solve for its customers? And then number two, you need to start understanding what do customers think about that product in the marketplace? I mean, I think it's really, you know, you can you can go deeper down that rabbit hole. You can keep it as simple as you like. But as you and I both know, when you're when you're just doing initial vetting, I think having a way to just sort of go through and say, is this something that I want to go deeper on is important. And to keep with that, it's the product, what do the customers think about it, do they have a differentiator, do they have a moat, are they first to market, are they early to market, and then what's that total addressable market, I think that's the product. then leadership, been there, done that. Who on the team has been there, done that? And you start understanding that when you see these teams that are going from private startup companies to public companies, they're going to start swapping out. They may swap out a CEO. They may swap out a CRO. Or they may swap out a CFO. But they're usually going to try and find somebody who has that been there, done that experience. on the team that's going to help take them public, and then even post-public when they're going through growth cycles. So understanding how that team is going to grow and evolve is super important. And you know this, too. We talked a lot about the study of Frank Slootman and what that guy's done, right? And then it's the financials. How do you just basically understand how close they are to profitability? You also want to understand how much money they've taken. And then I usually like asking questions in interviews. Are they hitting their sales number? Is that consistent? But I think there's a way that you do a financial analysis. And those themselves will give you some good guidelines. And I know earlier this summer, I went through with Brian Faroldi. And I had a full episode on public company due diligence with him from a stock picker's perspective. sort of a private company due diligence episode two. So I'd recommend that people go listen to those, because that'll give them the deep breakdown.

23:07 - 23:40 | Fred DeWorken: Get them to double click on the financial aspect of it. Oh, 100%. Because it can be confusing. And there's been such a proliferation of venture capital. And everybody hears, oh, yeah, seed, and A, and B. You hear people chasing those milestones. But to me, it's kind of chasing those milestones out of context, right? Yeah. The seed, and the A, and the B are really worthless milestones if the product isn't the right product. That's right. If the churn is big, if the leadership hasn't been there, right? Those are things that, once put into context, have for greater meaning.

23:40 - 24:06 | Christopher Nelson: 100%. And I think, you know, and then even getting back to the product, you have to understand, is this a B2C product? Is it a B2B product? In that episode on private company due diligence, because I've done a lot private to public, I really focus on companies that sell into businesses because generally they're going to have a budget. That buying cycle is going to be more predictable. You also understand generally their broader need.

24:07 - 24:38 | Fred DeWorken: Okay, so let's turn the tables a little bit to Christopher Nelson as a product. Okay. So we talked about how do we analyze these companies from due diligence and great opportunities. Now, I would imagine that part of maximizing your value as an employee for one of these companies is getting the best position possible based on the value you bring to the table. That's right. So how are you identifying that value within yourself and then communicating that value in a way that creates greater opportunity for you?

24:38 - 29:06 | Christopher Nelson: There's an amazing book by Cal Newport out there called So Good They Can't Ignore You. And so many people are focused on his deep work books that I think they've overlooked this. And in this book, he talks about how Understanding and knowing the skill that you're building and how it's valued in the marketplace will always give you a greater value and literally let you live the life that you want to live by building skill. I also think that Naval Ravikant, who is a great serial investor, VC investor in Silicon Valley, talks about the fact that building skills that are unique and irreplaceable will always allow you to provide value. Now, what I've done is I took Cal Newport's concept that he calls career capital, and I added some definitions to this. And I said, career capital is a combination of my education. People do want to know, OK, you got a computer science degree from UCC San Diego. That's sort of table stakes. It's not a big deal right now. But they want to know that I have the education. Then they want to know my experience. Where did I work? Okay, you worked at Accenture, you worked at Splunk, you worked at Yext, you worked at Forcepoint, you worked at GitLab, in different roles that I had there in leadership. But then the third leg of the triangle, which is arguably the most important, is the results. What did you deliver? OK, if I was able to, I know specifically a couple of projects it when we were at GitLab, we were able to reduce the time to close the book by 48 hours. You know, when you become a public company, that time is pivotal. And so that is that is a numerical result that when you put that on your resume, people are like, whoa, I want some of that. And that's really, when you start thinking about the results and the way that you talk about your skills, you want to be able to position yourself. with your skill set so that people are able to really say, I want that on my team. So being able to describe and articulate your value is really important. And then I think the other thing many people overlook is going to somewhere like a levels.fyi and understanding what's the value for you in the marketplace. what are people when you think about we're working for equity so go to public companies and say if a public company would pay this much salary a bonus and this much equity for me in dollar value Okay, how do I now match that to my level, understand the job descriptions and say, this is what I'm worth on the marketplace. If you're able to do that, and that was something that I was able to do, is go in and do some work and be able to display my market value. and really then go and vet that with some people, meaning that I could go and sit down in interviews. And when they asked me what I was interested in, I said, here's what I'm interested in and here's why. Here's what I've been getting paid previously. We would do that at that point in time. Now, I know some people that you don't have to do that anymore. And then I would say, and here's what I'm seeing out in the marketplace. And then here are the results that I deliver. So when you get that and you're making a business case for yourself based on your education, your experience, and results, and you understand your market value, then you're going to go in and have a respectable business negotiation of what it's going to take for them. Because I think it's so important in the trading the time and talent for equity, what does your employer want? What do they want? They want access to those same results. So for myself, my positioning was I can come in and I can organize your business applications and I can help you get ready to go past a Soxotic so that you can go public and I'm your easy button. Like all of those things, you don't have to worry about that. And let me show you the results that I've delivered before in getting prepared for the SOX audit, but also some of the other value add results of reducing time to close, reducing time to quote, all of the things that are going to be really important for you in making your business more efficient as you think about scaling and growing.

29:07 - 29:51 | Fred DeWorken: I love it. I love the business value approach and building a business case for yourself as the easy button. All of that kind of productizing your own self operating in a position for a company to drive value for them. I think that is a great framework and mindset for people to be in as they navigate through all of this. And the results that you've generated speak for themselves. But I imagine it took you time to hone this. Yes. Maybe there was a couple missteps along the way, even with some of these big names. And was there a time in one of these negotiations where you felt like you left a significant amount on the table where you could have optimized the offer in one way or another by thinking in a different way or understanding the value of the company or the shares or?

29:52 - 32:04 | Christopher Nelson: I definitely think, and I mean, when you go back, there's definitely things that yes, I think that in all of those negotiations, I always think that if I would have done something slightly different, I always believe that somewhere there's probably 10 to 20% that you leave on the table. And I think part of that is just this whole learning experience. And so as I think about all of those different negotiations, I think that, in all of them, there's there's not a one size fits all. I can't I can't say, oh, I did this or that. But I think in hindsight, I think some of the things that I've learned is. Number one is always, always ask for more and be willing to take less. I think that was something that I I learned that over time, where I think at the beginning I thought, let me ask for something in the middle and negotiate for more. versus let me ask for more and then let me let them negotiate down. That was something that I learned. I also realize now that there's also other things to negotiate besides quantity, meaning you can negotiate vesting schedules. I think this is something that people, including myself, I overlooked a lot. And it's now as I become an educator and I'm talking to a lot of HR compensation professionals and people who are out in the marketplace negotiating and trying to help them get strategies as well, is that vesting schedule is the other dimension. There's a quantity of how many shares you're going to get, but then there's how it's delivered to you. You know, that's an opportunity to negotiate, too. You can get things sooner. You can make them performance related. There's a lot of leeway and room to negotiate in some of these things. I also think that as you start taking more executive roles, being able to negotiate up front for, hey, if things don't turn out the way that we think, if the company is going a different direction or we have to part ways, negotiating your your exit up front is something that I know a lot of c-suite executives do but I think you know VP levels especially if you're going for a relocation I think that that's something that that should be on the table.

32:05 - 33:08 | Fred DeWorken: All excellent advice. And just, you know, when you go back and you look back on a career, it's like, man, I wish I'd have known these things as I was negotiating. And I'm sure as you begin to get into vesting also and now you're building this equity and maybe they've made it available to you through a portal from the law firm, or maybe they've made it available to you in a portal and JPMorgan Chase or Merrill Lynch, whichever banker that they selected. And you see these amounts. How do you then ensure that as you're operating in this tech space, which is constantly on super high-paced, and the companies that you picked are hypergrowth, which is a completely different level of operating. It's like a transactional brain on steroids, right? And all of the IO that you have to do seems a little counterintuitive to what you have to do to actually invest and to preserve. Right. And then there's the whole fact of like, is this money even real yet? So tell me about that, that that dynamic and flipping the switch and learning how to manage the equity as an investor.

33:08 - 38:13 | Christopher Nelson: Well, I think step number one for me, and this is what I tell people today too, is first understand how to manage the equity as equity is that asset. And I'll explain what I mean in a minute. And then you understand how to convert the equity to cash. So for my first IPO, I got the equity, and I did two things right away. Number one is I took the stock agreement, and I went to a stock options lawyer and paid for an hour of their time. It's like $350. Walk me through this. Help me understand what are the most important clauses. Now, I'd already signed it at that point. I mean, you and I talked about it in our previous conversations. When you get to the point and you get into a company you want to, and especially you see it's a rocket ship, like I'm getting on the rocket ship. But I wanted to understand it. And so I understood a lot of the details of the stock agreement that I think it's important that people understand. And I then went home and I made a spreadsheet that said, OK, here's my grant. Here are my different vesting dates. And I just started tracking that. The other thing I started tracking was, You know, we would do as private companies, we do quarterly updates to the company. And this is what I love when everybody is a shareholder is is the the leadership team wants to report out to the shareholders, which is just yourselves. And I know they are reporting that out to the larger investors at that point, how the company is performing. So I started then tracking down some of those metrics as well and in understanding how that was performing. This is something a lot of people overlook. Many people, they'll take their equity agreement, their stock, and they put it on the side. In the file cabinet. In the file cabinet. And they think of it like a savings account when it's really an asset. And even myself, I think the first time out, I didn't really understand with my eyes. So what was going to be the tax implication of going through the IPO and what things it was? It was a little late in the game where I really started understanding, like when you should exercise, how you should sort of manage that. So that was something I wish I knew sooner. But this is where Creating a process of how you manage the equity, meaning I want to know the value of my shares quarterly. What are they valued at? What's the current fair market value? How many shares do I own? What is my option strike price for ISOs? And understanding, OK, this is sort of the dollar amount of what I have. And then tracking that into my Schwab account, into my E-Trade account, making sure that I'm getting that and I know the value. Because ultimately, in the exchange, when you think of trading your time and talent for equity, you should be able to have a direct line of sight to, I'm getting salary compensation. I'm getting this equity. What's that equity's value? And then we went through the IPO and we had these multiple seven figures on paper. And that was very confusing because I felt excited. My wife felt very skeptical. Like, what is this? And we were in the six month lockout period. At that point, it was ninety five percent of our wealth. And we were riding this. I call it riding the rhino. We every day we got on top because if you're on a rhino and you get bucked forward, you're going to get stabbed by the horn. You know, you just. Yeah. And you definitely don't want to get kicked off that thing. Yeah, and that horns the IRS. Right. Yeah, exactly. Yes. And so I think it was that time period of when all of a sudden my stock had this value that then you start thinking, now I actually have something that's more than just a few thousand dollars. I've got multiple seven figures that I have to manage. How am I going to manage this? And arguably, that's the long tail of the journey, right? You think about this started for me in 2012 to where we are right now in 2024. It's been a long journey of how do I change my mindset from being somebody who goes and makes money, a money maker, to how I become a money manager? Meaning, how do I take this asset, track its value, and see it increasing in value and say, okay, I want to continue to trade my time for it. I then want to get with a certified tax planner and I want to then convert it to cash. And then once I have it in cash, now I need to go deploy it. And that, to me, was a whole other, once I got it to cash, then there was a whole other level of learning that I had to go understand and develop my own wealth ops practice, wealth operations of, how do I actually go find the team? What is the method and strategy that I'm going to go deploy this? How to create a portfolio thesis? How do I now systematically deploy it so it's generating income and growing to be able to take care of me and replace my paycheck? Right.

38:13 - 39:06 | Fred DeWorken: Sounds like a extremely emotional ride and a very high mental burden. Yeah. Because you're talking about a lot of, you know, the Matthew McConaughey where he's up there with Leonardo DiCaprio and Wolf of Wall Street, a bunch of high-brained stuff, a bunch of in-out, right? How did you break through the barrier of that? I mean, you seem like a very, you are a very organized person. I mean, thinking about, okay, I'm gonna take my strike price, I'm gonna put it in the spreadsheet, my investing schedule, and I'm gonna religiously bring in the fair market value. You took the bull by the horns. What would your advice be for somebody that is in a hyper-growth environment, that has this equity package coming at them, what are kind of the baby steps, the bare essentials that they need to be thinking about to build themselves a ladder so that they can get onto that long tail? If that makes sense.

39:06 - 41:57 | Christopher Nelson: It does make sense. And I think, you know, I mean, obviously, this is why, you know, Tech Equity and Money Talk is here, Tech Equity and Money News, the newsletter. And and now as we've started Tech Equity and Money University to help deliver education, there's going to be more and more things available for tech employees, but I mean, it's important that you have to believe and understand that the equity that you're working for should have value. It may yours may not, but there is some somewhere that for your skills, you can trade for it. So making sure that you are understanding what is the value and you're tracking that over time. Now, you're right. I was very focused on this because I really had clarity that I wanted to, I think starting my career later in life, like I knew that I only had a short period of time that I could run that hard before I needed to try and find something to to step off. Because, you know, tech is is grueling, can be really intense. And so I think it's being able to track some of that and then being able to start figuring out how do you get it to cash and then just getting educated. I mean, I think more than anything, like, you know, because I'm talking about the tactics now. I do want to switch back. And I think, you know, in the newsletter that just went out yesterday was really on Sudden Wealth Syndrome. which is what impacted me right after our first IPO, is that I went into depression and felt a lot of anxiety because I didn't want to be the fool that lost all this money or did something ridiculous with it. And I think the strategies that got me out of that are also the strategies and tactics that can help people move forward in this, which is get educated. And for me, I look for people who've been there, done that. I think that the the best education I want to invest in is somebody who has made the money, somebody who has invested the money and managed it with other people. I'm not saying all by themselves, not a DIY masochist, but somebody who has actually, you know, done some things with the money and then achieved a result and then understand what are the things that they studied? What are the foundational education that they got? And then surrounding yourself with people who are doing the same thing. I mean, this is obviously why you and I are in groups and we do things together where we're trying to keep each other accountable for managing and becoming money managers. I think fundamentally, those things are going to help you calm down the animal brain and get out of this fight or flight or freeze mode and allow you to start taking some steps.

41:58 - 43:04 | Fred DeWorken: That's so prescient because I had a very similar thought whenever we went public with Tableau and then again with Snowflake and it recurs. I watched my grandmother basically go through all of the wealth that my grandfather had set up. And it was, you know, she didn't understand how to manage it. That's right. And that's kind of a traumatic experience, you know, and it's always there and underlying and you don't want to be that person that doesn't leave your family set up or that winds up losing it all. And I think the more that you can surface those type of feelings, I love how you address it head on, calling it sudden wealth syndrome. Yeah. The better. you know, so that people can rationalize where they are and act accordingly. And support groups, accountability groups are amazing to that end. I think that there's something to be said for finding that. And I know that you're developing a cohort program that's coming up, and we may not be able to talk about it yet, but I'm very excited about that in the content because I feel like people with the right type of frameworks can find their success.

43:05 - 45:10 | Christopher Nelson: No, we can. I mean, we can talk about it. I mean, it's like I, I believe that for us to be successful, we have to be able to find groups that we can trust and have people who are at different points in the journey and have conversations. That's what's really helped me the most. I mean, what's helped me the most is being able to sit in the room with people who have grown their wealth from 5 to 10 to 15 million and helping understand their emotions, how they overcame those, the mindsets, the strategies, the patience. And and the ups and the downs, because like anything else, it's a journey. And I think it's it's so easy for us to look online in and we see here in our culture, you know, we're going to see the commercials that show the touchdown, that show the winning, the sprint, that show all these things, the results and these magic moments. But they don't show the work. They don't show the grind. They don't show the nervous breakdowns. They don't show the nervous breakdowns that may happen right before the breakthrough. The reality is if we can do this together, I believe that we can go further together than we can alone. And so that's where I am building out the Wealth Ops Collective, which is going to allow people to come together and really understand the fundamentals. That's a big thing I'm focused on is fundamental skills. It's the same thing with my sons in sport. Like, OK, I want to play football. Dad, OK, well, let's practice passing and running and blocking and all. Let's get to know the fundamentals. Now let's go execute the game. It's the same thing when you want to manage wealth, like understand the fundamentals, which it's hard to find out there, but understand the fundamentals and then go, go execute and be in around people that you want to achieve what they've achieved.

45:11 - 45:41 | Fred DeWorken: Absolutely. And I'm honored to be invited to your exclusive first cohort of this. I'm looking forward to the experience that's coming up. And, you know, anybody who's listening to the podcast should definitely consider it. Christopher is a national treasure. And what he's sharing for tech workers out there is the easy button. It's kind of like fits your framework of, hey, let's present value so that people have an easy button to execute on their business plan, their life, their dreams.

45:41 - 46:50 | Christopher Nelson: 100%. Because, yeah, more than anything, my heart breaks for the technology employee that is just continually stuck on the Ferris wheel. And they have they have the money locked up in equity that they could actually have freedom. But they just again, I think many people get stuck in this. I know how to make money and I'm very successful, but they need to transition to being a money manager. And what that means is that my vision was always. And I had this for a while as I worked, you know, consulting work was very hard. And I threw myself at it because I wanted to be great. I wanted to really build that skills. And I wanted to you know, I think I just have a blue collar worth that work ethic, you know, in a white collar world. And so as I did that, though, I envisioned that when I made this this money, I wanted to get it working as hard as I did. I wanted to have it sweating. I want to have late nights. I want to have a drink in Red Bulls and get an ulcers. Skipping lunch. Exactly, skipping lunch, doing lunch at the desk. I'm just having some jerky. Yeah, I wanted to have it doing that. And that's essentially what I've been able to do is get it sweating his heart so I don't have to.

46:51 - 47:37 | Fred DeWorken: That's amazing. So OK, you mentioned 1998 to 2002, that kind of early period for you. I hear some echoes, some eerily kind of similar moments right now with the whole AI boom. And everybody chasing generative AI, going to work for generative AI companies. And you had your experience with the Fool's Gold. Yes. What are the red flags that would go off in your mind if you were on a hamster wheel right now chasing some equity in this generative AI space that you thought was going to be worth something? But maybe it's time for a reality check. Maybe it's time for a gut check. What are the red flags that you would look for in a company that you would be working for right now?

47:37 - 49:34 | Christopher Nelson: Well, I would just I think the biggest red flags that I that I look for is, you know, and it goes back to the due diligence criteria is is the product solving a problem that a lot of people really have, whether that's, you know, and again, B2C or B2B. But I think if if it truly is solving a problem and and it's it's tangible and it and it can be measured, That is going to be less risk than something. Well, we think it's going to do something. I think I wanted to make sure that I was not speculating with my time. And that's part of I think that's part of what made me like when when people will come and say, well, wow, once. So I had the swing and the miss the first time before I had a due diligence strategy. And then I went three for four. And people say, how did you do it? Well, part of it is I was really, really choosy. I really did a ton of due diligence. I threw a lot of opportunities in the trash can because I knew that I had already, to your point, I'd spent my 20s. And I don't regret it at all. I had a great time. I had a great time. But I knew that I was a little late to the game, so I had to be really, really choosy. So this is where I would encourage people, when they're looking at AI companies, Be very, very choosy. Understand what's solving a problem. What's its time to revenue? Who are the leaders? Have they been there and done that before? And then always look at the valuation. I would much rather have a company that has a conservative valuation, meaning it's possible this company is worth more than it's stating. You know, there's probably some upside here versus something where they're saying, oh, I don't know. Is it how is this company valued at two billion? Where where is the revenue that supports that? Those are some of the things that I would I would really look at.

49:34 - 50:06 | Fred DeWorken: Right on. That's wonderful advice. Because it is. There's a lot of AI-funded companies out there right now. Many of them don't have a lot of revenue or they're not supporting the multiples that they've generated on. It feels to me a lot like the dot-com when everybody was out there supporting Webvan and what was the other one? Pets R Us or something like that. That's right. That's right. Pets.com. And that whole thing blew up. We watched the whole thing just go down into a giant dumpster fire. And a lot of people got turned off for equity for a long time for that.

50:07 - 51:14 | Christopher Nelson: They did. I think, though, it's interesting as we go through more cycles, like, think about it like we also had, you know, sort of the Bitcoin and blockchain was out there for a while. So I think that now that we're seeing some of this, you know, and I think there's value in a lot of those technologies as well. I just think that as employees, if you want to work for equity as a wealth building strategy, you have to do your due diligence and understand what you're trading for. And if you don't, then just take it for what it is. It's speculation. Then the question I would ask you is then, what's your overall comp package? Because if you're actually taking a cut on salary and you're speculating on your equity, then you're probably not even at what I would call simple career compensation, meaning what's your salary level for where you're at. And so this is where I think anybody like, can you work for tech equity as wealth building strategy? Yes, you can. Do you have to think like an investor? Definitely. Because if you don't, if you're not thinking like an investor, then you're really gambling with your time. And time is your most valuable resource.

51:14 - 51:44 | Fred DeWorken: let's talk about managing the emotions while you're being choosy. Because a lot of us have this kind of ingrained, call it type A, call it the busy body, you know, gotta be working. Guilty feeling, right? Maybe I'm between innings and the opportunity's there for me, there's a great package, but how do you be choosy and go from it's a great package to it's the next splunk, it's the next company that's gonna hit and it's gonna generate a lot of equity for me.

51:44 - 54:44 | Christopher Nelson: Well, so I mean, I think there's a few things that you need to consider. This is where I think having good financial practices help, meaning that if you're in between innings and you have a buffer in the bank account while you're still going to feel some of that anxiety, it's not going to be pressing. I also think, you know, part of that is like strategies on especially if you're living in high cost living areas like the Bay Area. How are you buying your home if you're buying a home for, you know, two point three million? Like how much are you putting down so you're not overweight on the mortgage, et cetera? I think those are really important because if you have good financial health, then you'll have time. And that's to me is is when you are in between innings, You're looking at the next thing. You need to make sure that you have a good set of time. Then I would say having an emotionless criteria. Meaning that I know when I go through my checklist, I know all the things that are hard reds, hard stops. OK, if it's a B2C company, OK, I'm throwing it over there. I'm not going to look at that versus it's a B2B company. OK, now I can start then drilling down and going to the next level to due diligence. But you have this emotionless criteria. Then you have. You have a personal board of directors. You have like, I love this company. I think this is so great. And you lay out, OK, here's, you know, and I actually go back to your the interview that I did with you. And one of the things that you said that I think is is something I did as well, which is when you get down to options, you really want to have no more than three. You want to have three companies that you're really looking at. If you have more than that, it's going to be hard to do the due diligence. It's going to be hard to go deeper. So you have three companies that you're really looking at. Then you really want to make sure that you're bringing in your personal board of directors to give you some advice. What do they think about this choice? What do they think about the career move? What do they think about who I'm going to work for? You're wanting to do a lot of back channeling a lot of this as you're going through the process. But I'd say to remove the emotions, try and create a financial buffer, have a an emotionless process. So, you know, like what your, you know, non negotiables are and then have a personal board of advisors. I think the fourth thing that's always a fail failover, which was something is like I always had the ability I had from when I did that failed startup. My wife and I had an LLC that we would do consulting through. So it's like we always would have, hey, if if on the bench too long, let me go get a consulting gig. Let me make sure I'm still in industry, still talking to people, chatting it up, getting a few dollars going in. I think having having something like that, you know, again, is is sort of that's going to relieve the pressure. OK, I don't need a job immediately. I'm bringing in, you know, a check or two here and there. I'm still in the game.

54:44 - 54:51 | Fred DeWorken: Yeah. That's amazing. Well, I know we're at time. I appreciate you coming on my show. Thanks so much, Christopher.

54:51 - 54:53 | Christopher Nelson: This is a hijack. What's happening?

54:53 - 55:05 | Fred DeWorken: Yeah. I'm very excited about the Wealth Ops Collective and what you've got cooking. I'm excited for the actual launch of that. And if you've got any parting shots, Christopher?

55:05 - 56:22 | Christopher Nelson: The parting shots are this. As a technology employee, you can trade your time and talent for equity as a wealth building strategy. It's important that you think like an investor, number one. If you have that framework, then the next logical step is you're going to look at yourself and say, what am I bringing to the table as the asset? What is my value? That's so important that you understand that first, because that's what you have control over. And so being able to build and grow that value, maybe it's not at a company for equity like I did. I worked many years of consulting, built a ton of value, and then went for the trade. Then thinking like an investor, you would have some type of a due diligence criteria. And you can go on to techequityandmoneynews.com. I have a resource there where I give you my due diligence criteria. And then essentially use that when you're selecting to make sure that you're trading into the right companies. And if you do that, that's the fundamental framework, you will find that you're setting yourself up for success. And I think always remember, what is the most valuable equity? Three things. It's going to be liquid, it's growing in value, and you don't have any restrictions on when you can trade.

56:22 - 56:33 | Fred DeWorken: Wonderful advice from the master. Thank you for everything that you do for the community. This has been Tech Equity and Money Talk, episode number 70, with our esteemed guest, Christopher Nelson. Thank you so much, Fred.