October 12, 2020

Episode – 11

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[…] Brad TruesdallEpisode #11 : Brad Truesdell CEO of Tomahawk Robotics and Former Navy SEAL on Raising Capital […]

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Brad Truesdell CEO of Tomahawk Robotics and Former Navy SEAL on Raising Capital




Description:
Brad Truesdell is Founder & CEO of Tomahawk Robotics. Tomahawk Robotics is a leading innovator for robotic control solutions. They are committed to driving enterprise adoption of robotics by reducing cost, optimizing system performance and improving ease of use through intuitive, user-centric design.

Brad talks about his experiences raising capital for Tomahawk Robotics and building the company from the ground up. He provides a unique take on the capital raising process and draws from his experience as a Navy SEAL and how those skills translated over to running his business.

What you’ll learn from this episode:
– Unique perspective on starting a high tech start up
– Challenges associated with raising capital in the robotics space
– Mindset of a successful entrepreneur and Navy SEAL

Connect with Brad:
LinkedIn

Full Transcript:

JP Maroney:

Welcome to another edition of the deal flow show. I’m JP Maroney, your host, along with my cohost for this episode of mr. Paul Nicoline, you seem to be on a lot of episodes. I am mr. Paul Nicoline here from Harbor city capital, and today we have special guests and actually you’re our first in studio guest. So it’s great. And in amongst all this covert, as well as having a lot of people from out of town, it’s a pleasure to have you in the studio with us, mr. Brad, Truesdale from Tomahawk robotics. And, um, my little bit of history that I have from Tomahawk robotics comes from our producer for the deal flow show. Uh, Mr. Daniel Penaranda who went to work for you guys while he was still in college?

Brad Truesdell:

That’s correct. Yes. Uh, yeah, he’s one of, uh, uh, within one of the first 10 employees that we had at the company.

JP Maroney:

Well, I heard lots of good things about the business and I’m very fascinated by where y’all are going both with the technology as well as the initiatives and the thing, the areas of business. So I can’t wait to get into that. If you’re watching or listening to this episode of the deal flow show, you can get more episodes and, um, get subscribe or follow us for future episodes@thedealflowshow.com. So I know you have not always been with Tomahawk robotics, so I’d like to back up just a little bit and talk about how you got involved in the business world, what you started doing, where you started out, and then maybe lead up and talk a little bit more about Tomahawk after that.

Brad Truesdell:

Sure. So my back story is a native of Florida, uh, where we’re located today and, uh, grew up down here and then went off to college and then following college into the Navy and, uh, spent 1998 to 2007. So about nine years in the Navy. Uh, during that time I was a seal and, and this is what kind of, you know, leading into Tomahawk robotics had the opportunity to use, uh, some of the first, uh, robotic systems that were employed by small units, uh, both air and ground. And so had that opportunity, um, you know, during my time in the military. And then following that, um, left the military in 2007, falling in injury, uh, went to business school and then subsequently to that, uh, worked at Harris corporation, uh, here in Melbourne, Florida, and then, uh, worked there from, um, 2009 to, um, 2017 and then started Tomahawk robotics in 2018.

JP Maroney: 

I found, I remembered that you had former Navy seal. I probably wouldn’t have been saying the things that I said when you came in the door to the

Brad Truesdell:

Actually with, uh, with working at Harris, didn’t you meet a professor at Harvard? Is that how that evolved? Yeah, so, um, one of my professors, a gentleman by the name of Steve Kaufman was sat on the board of Harris at the time. Uh, he was a former CEO of arrow electronics, and, you know, fortunately for me, we struck up a nice relationship during my time at business school. And, uh, you know, he’s very encouraging of, um, you know, trying out a role at Harris. Um, and he was very nice in helping me facilitate a great entry point. Um, and you know, Steve is, um, uh, certainly knowledgeable about the industry. You know, I went to business school a little bit later in life than most people because of my military service. And also I just frankly, wanted to give back, um, you know, what the same motivations that pushed me into wanting to join the military in the first place, uh, you know, patriotism wanting to do something important, impactful for our society, um, made me want to go back to work for the aerospace and defense industry. And Steve, you know, helped me, uh, along that path. And so, uh, you know, it turned out to be a great thing, you know, joining Harris, learning a lot about, uh, the industry and frankly, how to run a business. Um, you know, I learned things there that I wouldn’t have learned, you know, doing a many other jobs and as you know, subsequently prepared me well for Tomahawk robots.

JP Maroney:

Terrific. When did you get the entrepreneurial itch?

Brad Truesdell:

Well, um, originally I think, you know, two things I’d probably go to that point. So number one, my parents owned a business themselves, and so I got to see that, you know, their own, um, you know, the highs and lows that they dealt with when they started their own business. Right. And they started a relatively, uh, um, you know, late in life. Um, and, uh, you know, uh, you know, let’s say middle of their careers, probably a better descriptor for it. Um, and you know, they build up a good business and a good living for themselves and, uh, you know, after school and during the summers, I worked for them. And so I got to see that, um, you know, both the, again, the goods and bads of that. Um, but I got to see how impactful that, you know, good management, a good culture could be on, you know, their coworkers or their employees lives.

Brad Truesdell:

And that’s something certainly that I, uh, took away from that experience. Um, so that, you know, that certainly that, you know, kind of formative experience that I lived through, but also I think that, um, you know, as you progress through your, your own careers, right, you learn things as I talked about, you know, both during my military time, my education and at Harris, and at some point, you know, you want to take a swing yourself, right. And I think that’s, you know, I got to that point in life and I was ready to, you know, I felt prepared and I felt like I could do something, um, more impactful on my own.

JP Maroney:

When you go from having the resources of a Harris behind you to running a small team on your own seal team, so to speak in an entrepreneurial effort, how did you make the transition to that? Knowing that, you know, you don’t have the big backing behind you, it’s up to you, you got to eat what you kill and things like that.

Brad Truesdell:

So I think that, um, you know, so there’s a resource element and then I’ll, I’ll call that the, you know, the mindset and the ability to trust yourself and operate on your own. So that certainly came from the confidence I gained during the military, that I would have that ability, right. Confidence in yourself to, you know, make smart decisions or make mostly smart decisions. Certainly we get some wrong all the time. Right. But, uh, I think I, you know, created that confidence because of, you know, frankly the, uh, the fire and experience I had to deal with, you know, during, uh, you know, the time I served in the military. Right. So that was very formative on me. And then to the point of resources, um, yeah, it was certainly tough starting out, you know, and it’s funny, uh, and we’ll get into this more, you know, we’re about to commission our new building, right.

Brad Truesdell:

And it’s a significant improvement over where we started the, you know, the first office, um, you know, my partner and I are, and, uh, you know, Matt, some of the gentlemen I started the business with, it was literally as big as this table. Right. You can lean over and slap the other guy if you want it to. Um, and we’ve grown since that time into, you know, we’ll be moving into about an 8,500 square foot building. And I think that, um, you know, making that transition was at times tough, but it taught you such good lessons about being, uh, resourceful. How did you know how to do more with less, um, you know, how to work through all the books, you know, again, having good educational experiences and good business experience has helped me do that, but forcing me to do those things, you know, it’s certainly made me a better business manager and frankly, um, uh, more adept, I think just general, you know, dealing with the highs and lows of running a business as well.

JP Maroney:

I’d like to know, tell us a little bit more about Tomahawk, robotics, exactly what the services are, the, what you provide to companies

Brad Truesdell:

So forth. Sure. Um, you know, I’ll tell you what we do and I’ll give you an analogy to kind of, you know, maybe baseline this for a broader set of, uh, an audience. So what we do is we make software that makes robots easier to use safer and more effective. So think about what windows did, you know, 30 years ago in the PC industry stacking on software to make laptops or PCs at that time, much more capable and make it a tool from, you know, that, you know, the entry level employee could use, you know, mid level manager engineering team, or the CEO could use that whole spectrum is what we’re doing for robotic systems today. And we focus not on, uh, robots in let’s say a manufacturing environment, but rather robots that people will have to interact with on a regular basis. Things that they typically call field robotics. So things used outside dull, dirty, or dangerous jobs, oil and gas mining, and certainly the defense industry as well.

JP Maroney:

That led into my next question then who, who’s your customer? Who’s your client?

Brad Truesdell:

So fortunately the good news is we have a few. Um, and, uh, as of, um, I guess about a quarter ago, we actually have customers on three continents, uh, Australia, North America, and Europe, um, and our customers range from, uh, here in the U S national labs, defense agencies, you know, both in Europe and Australia, as I talked about, uh, but also large enterprises, um, you know, people who build robots, um, examples of that would be, uh, companies like Baker Hughes, you know, from a large oil and gas perspective. Uh, but also, you know, again, people who build robotic systems, okay.

JP Maroney:

I want to get into the deal flow process and talk a little bit about how, because you all play a very long game in terms of business development. So it was very much a long game. We’ll get into that in just a moment. If you’re watching this episode or listening, this is the deal flow show. You can get more episodes, subscribe, and follow us for additional future episodes@thedealflowshow.com. So again, the deal flow show and the whole idea of our content is we obviously want to introduce people to great companies, great leaders, operators, but we also are going to share back a lot of this content in a book called dealmakers deal breakers. So I want to talk about the deal makers for you. When you go into a new environment where you’re going to be working potentially with a new strategic partner or a potential client, what’s your process of preparation for the deal flow for the deal process or the deal making process? How do you, my guess is some of that, and I’d like to even get deeper into the background with military, but I’m guessing a lot of what you did there in preparation for a mission maybe you’ve carried over, but how do you apply it specifically to the deal making process?

Brad Truesdell:

Yeah, so I, I think, um, with the context of Tomahawk robotics in place, I think there’s really two main, um, two main elements that I go, I start with from an assessment perspective. So number one would be, you know, do we have technology alignment, right? Is there, you know, is there a, you know, appropriate technology, um, you know, intersect between our company. So as a for instance, uh, we just signed a partnering agreement, uh, within the last 30 days with Samsung electronics. Right. Great opportunity for us, you know, huge, you know, one of the top makers of cell phones in the world, you know, by volume, right? So in that, for instance, they have a product, um, you know, it’s called a Samsung galaxy S 20, where we put our software on and you can use that to run robots from, okay, so technology alignment, they have an end user device, we have software and we put it on that phone to run robots.

Brad Truesdell:

Right. So that’s number one. And number two would be, um, and I’ll use a bit of a military term here, but the human terrain, you know, who who’s on the other side of the table. Right. And this is certainly I’m sure no surprise to you that I’ve gone to this part of the discussion. Um, do we have somebody who has, or shares similar motivations, um, you know, do they see the vision of the combined technology in a similar way to us? So those are, you know, the, my first two, um, you know, ways to assess things. Um, and certainly, you know, beyond that, after we kind of moved through, can I make a deal? Does it make sense from a technology perspective next, what are the deal terms, right. Um, you know, is this a situation where both companies will benefit and it’s easy and understandable? You know, those are the kinds of things that I certainly, you know, kind of work

JP Maroney:

My way through. How do you bring the people together? Cause you know, we talked about Daniel joining your company. It was very early first in the first 10, first 10 employees. So how do you pinpoint, I was talking in fact, I kind of did a little bit of a training slash article the other day, talking about surrounding yourself with people that fill the gaps, but what is your kind of approach to sourcing the right people for the deal process?

Brad Truesdell:

Yeah, so I think, um, you know, certainly from the other side of the table, you know, the people that we work with, I think you, what I typically look for is, you know, we do some do deal diligence ahead, identify, um, you know, people we want to work with our company targets that are appropriate for us, right. May contact, um, and then kind of assess them through, you know, a getting to know you phase. Right. And I think that getting to know you phase typically for us is, Hey, we’re working together. You know, as a, for instance, with Samsung, we were buying product for them before we signed a partnership agreement, you know, uh, and you know, smooth, you know, kind of a smooth relationship there. They were supportive of us, you know, good terms from, you know, buying products, supporting the products, you know, all those things that you’d want to have in place before leading up to an actual partnering agreement. And that, for instance, right. So what you hear from me is, um, you know, kind of the, uh, you know, let’s call it a trial run, right. You know, you have that, you know, get to know your face, that’s predicated upon, you know, doing good business together. And I know that’s a little bit different because we’re talking business to business versus maybe a kind of an investment, you know, um, take on things, but that’s how we worked through it.

JP Maroney:

Well, we don’t, and I want to talk about that, the investment side of things in a minute, but we haven’t actually had a lot of issuers or a capital raise or founders in here. And I definitely want to get that take on it because as you have lived the CEO of a growing company like this, a lot of your work is making sure, making sure you got money to do what you need to do in the business. Right?

Brad Truesdell:

Yeah. So the idea of a Tomahawk robotics, how did it evolve? Was it, was it something that when you were in the military, it started to tick in your mind that this is something that’s needed and you could take it to fruition. You could take it to the, to the public now, can you talk about that? Yeah. So I think, um, like many early stage technologies, often they, they, you know, when they first kind of debut there, they’re challenging to use, right. There’s a lot of difficulties let’s, you know, impediments to effective use. Right. And certainly, um, robotics that I experienced were, you know, reflected that. And so, um, you know, I think that, you know, gave me the idea of, you know, the, you know, um, this technology is going to have a profound impact on the way people do business people, you know, serve in the military, how they keep themselves safe.

Brad Truesdell:

Right. So I think, you know, I saw that in certainly, you know, thousands of other people saw that, right. So there’s nothing unique there, but I really was focused on, and this is, you know, because of, you know, where I served and, you know, the units I served in, um, you know, ultimately, you know, my hope and my goal with this company is to give people technology so that, uh, you know, reduces risk to human life. Right. And so for me, that those were the motivations that kind of, um, you know, propelled me to found Tomahawk robotics. I think that, you know, those, you know, the, kind of the, the challenges of use in a, in a, you know, in a tough environment like Iraq or, um, you, the, the ultimate goal of, you know, allowing people to do their job more safely is what I was going for now.

Brad Truesdell:

I think that, you know, that needs to be combined with, you know, those motivations are certainly good, but combining those with, you know, the business side of things, and frankly, the industry exposure that I got, you know, subsequent to my time in the military was very important. Right. Um, who are the buyers? How do they buy, what are their really technology problems? You know, how can you insert a technology? Like I just talked about into the industry with, um, with, with as little friction as possible, right? How do you make a product that actually people can buy and use, uh, you know, easily, and that does actually make their, their end products or their, or their mission better, depending upon the user.

JP Maroney:

Had you ever had any experience raising capital before Tom hunt? No.

Brad Truesdell:

And it, it was certainly, it was a learning experience.

JP Maroney:

It’s easy, right? Yeah. I mean, all you gotta do is go out there and just ask people to write a check. That’s right. We’ll get into that just a minute. This is the deal flow show. I’m JP Maroney, along with our cohost Paul Nicoline, we have a special guest on with us, Brad Truesdale from Tomahawk robotics. If you’re watching or listening to this episode, you can get access to our archives as well as future episodes and follow us and subscribe@thedealflowshowdotcomthedealflowshow.com. So let’s talk about it, the, the necessary evil of raising money, I guess, in growing a business and, um, you know, good products, good companies, good ideas, as long as you’re telling the story, right. Do attract capital. So it doesn’t have to be hard or complicated, but it is a process, right. Can you walk us back to the beginning of how you raise the first seed money? Cause we are going to have folks watching these episodes that are in their first venture first time raising whether it’s friends and family, or a first round of capital all the way up to we’ve got sponsors and deal makers, broker dealers that are watching. So walk us through that early process that y’all took to get the money in the bank.

Brad Truesdell:

Yeah. So we, uh, and just, we’ve gone through two capital raises thus far, and I’ll talk about the first one, I’ll focus primarily on that and you know, how things, uh, went there. So we, uh, bootstrap the company initially, um, you know, we wanted to validate the ideas, Hey, can we actually attract customers and all those kinds of things. Right. Um, you know, not a novel concept for sure, but we wanted to show a little bit of traction and, and frankly give, give our investors confidence that we could, you know, deliver on the products that we said we could. Right. So for the first, um, Oh, roughly nine months, the company’s life, that’s where we focused on. And by the time we started raising capital, we had a half dozen customers. Um, and then from that point forward, what I focused on was, um, capital providers here in the Southeast, you know, Florida, primarily in Florida in the Atlanta area, uh, you know, Georgia, you know, and, and the reason for that was, um, you know, certainly there’s a significant population down here, but it’s not as dense as a, for instance, as an Atlanta, right.

Brad Truesdell:

So those are the, really the two geographies that I on. Um, and in that, you know, I, I went to, um, you know, small equity providers, you know, venture capitalists, um, you know, again, regional type venture capitalist here in the Southeast and wealthy individuals. Um, you know, today we have a mix of both, uh, as part of our cap table and, you know, just, um, what I did was, you know, kind of share my story, the background, you know, the expertise that, you know, both myself and my partner had when we started this company again, Matt Sommer, um, by himself, by the way, he’s named on nearly 40 patents. So a very, uh, accomplished technologist and engineer in his own. Right. Um, you know, but even then it was, it was, it was challenging. Um, you know, what we’re doing is, um, fairly specialized number one, and number two, um, you know, the first money in is always, always the toughest.

Brad Truesdell:

Right. And I think that, um, you know, we had to work through that process, educate people about where we were focused, the markets that we’re in, you know, or are generally, you know, I think to some, you said JP was the, uh, um, you know, we’re selling business to business or business to government that is a long sales cycle. Right. And many investors saw that and they were nervous about it and rightly so. Right. So, you know, how much money would you need, uh, how long would the sales cycle take to actually show, you know, uh, positive traction. Right. And so that was one of the, again, one of the reasons why I did want to have some customers at the table already, um, but you know, this is a very different business than, um, you know, let’s say doing something in consumer space where there’s a, you know, much more rapid cycle time.

Brad Truesdell:

Um, you know, but on the flip side of that, uh, we did have some people who saw what we’re doing, you know, believed in, you know, the capabilities of myself and the co founder, Matt summer again, and, um, you know, had confidence in what we could do. And I think, um, you know, when we raised capital in 2018, we pulled in about two and a half million in total, and it allowed us to, you know, take our product from what I would call a very nascent, um, poor, limited feature set state into a much more capable state, um, you know, over the, you know, the following, you know, 12 or 18 months. And we’ve continued to build upon that, you know, certainly, um, as we, you know, again, raised a second round of capital and continue our growth today. Excellent. The, is the second round ongoing now, uh, we completed that in, um, Oh, just the tail end of 2019.

Brad Truesdell:

And the intent there was, um, at the time we had we’d scaled from, you know, when I raised capital, we were at about while we were three people. And then, um, you know, we scaled up to about 15 people. Um, and now we’re just pushing 30 and that’s that second traunch of capital was intended to allow us to hire some additional talent in, uh, so we could meet some contractual commitments that we had on the table. Um, and unfortunately that all turned out well. And, um, you know, today I think the good news is, is that, you know, our capital burn is extremely, uh, small, um, you know, uh, you know, generally we’re running about $70,000 in burn per month. Uh, and certainly there’s variation. And, you know, the month before or last month was about $20,000. So, you know, running the business relatively conservatively and scaling up as, you know, kind of business opportunities avail themselves.

Brad Truesdell:

And frankly also, you know, because of the economic conditions, the uncertainty associated with COVID, we’re probably, um, have more cash in the bank then, you know, is probably typical for a company of our, you know, where we are in, in kind of the maturation process. How has COVID affected you if at all, has COVID heart, the, yeah, absolutely. So one of the things, you know, I talked about business, the business and business government, a lot of those sales are, you know, face-to-face demonstrations, trade shows, you know, getting on planes, going to see somebody, you know, and frankly giving them confidence in what you have is, is something that’s real. Um, and you know, those, the inability to do that in many, in many instances has certainly slowed, um, you know, slowed the, you know, the, our pipeline, right? It’s, it’s, it hasn’t, let’s say it hasn’t caused a drop in our pipeline pipeline, but slowed it. So this year we’ll, you know, we’ll triple revenue again this year, which is, you know, which is fabulous. However, I think we could have done more if COVID had not hit for the reasons I just told you.

JP Maroney:

Yeah. What’s the future then. So obviously you’ve got the burn under, under, um, a conservative number is you said, but what is the future like in terms of capital raising for the business, if you can share that.

Brad Truesdell:

Yeah, sure. No problem. I, I think that, um, you know, the good news is the, you know, the market for robotics is growing significantly. This is absolutely a growth market. And we have a lot of opportunities ahead of us. And I would say this, that, um, I view fundraising and I, you know, I will likely, uh, execute an additional fundraising 20, 21 to scale up to again, meet a few business opportunities that we have in front of us. And the intent there is that, um, with having, you know, frankly, as you guys know, having some dry, dry powder gives you opportunities to do things maybe a little bit quicker, uh, and, or, um, you know, grow the business in a way that you could not do necessarily organically, right? So we’ll weigh those things out, but there’s a likely, a strong likelihood that I’ll do a raise in 2021

JP Maroney:

Is the, again, I’m not sure what all you can speak to, but as the exit B acquired go public, what continued to just grow organically, maybe acquisitions? What, what is the, the landscape for you?

Brad Truesdell:

So I, I think that, um, a couple of things here is that the majority of, um, exits in the robotic space have been two strategics of one variety or another. Um, as a, for instance, there’s a company called six river systems that recently was sold to Shopify. Um, they’re in the, uh, robotics, you know, for warehouses. Um, and the guys did great and sold to, you know, a growing company, a strategic in the case of Shopify. Uh, and they did extremely well for themselves in their early investors. Um, and there’s been other companies like that endeavor, uh, was sold in the last 12 or 15 months to FLIR. Uh, again, another situation where, um, you know, a good turn of events for the early investors. I think that those examples and others like them, um, show that number one, there is a relatively strong appetite among strategics for, um, you know, robotic technologies out there.

Brad Truesdell:

Um, you know, but that being said, I think, you know, um, as long as we, you know, frankly develop a great product, continue to deliver for our customers, we will have plenty of opportunities in that regard. Um, so I think certainly strategics is an option for us. And I think number two would be, um, you know, is there a path, you know, potentially to an IPO I’d like to think so. And, um, you know, I think, you know, I’m rather, um, I think, you know, rather open to any of those paths, as long as it comes back to the things I talked about, um, you know, wanting to create a technology that ultimately makes people doing Dole, dirty out outdoor jobs, uh, allow them to do it more safely. Right. So that’s, that’s kind of, you know, my, you know, my, uh, North star for how I make those decisions.

JP Maroney:

Very interesting. Let’s go, can we go back to your background as a seal? Sure. Um, any of those, I mean, there’s some obvious ones that come to mind for me, but from your gut, the skills and the experience of managing a team, putting things together, things that you’ve carried over to the deal making process for yourself.

Brad Truesdell:

Yeah. I would say this, that, um, I think that, you know, my time in the military, um, in the seal teams, you know, my time overseas, uh, being exposed to, you know, uh, a wide range of challenging situations, both from, you know, um, you know, fellow fellow service members, um, you know, partners that we worked with, you know, whether they be Iraqis or, um, you know, or other coalition partners, you really have to understand the differences people bring to the table and the skill sets that they have, you know, respective to those individuals. Um, and I think seeing that and having a, an appreciation for that and understanding how to mix them in the right way to get to the ultimate goal that you, you know, that you’re seeking. Right. And, you know, certainly I made it a slew of mistakes along that, along that path.

Brad Truesdell:

But seeing that, you know, seeing that and, uh, you know, appreciation, uh, for different individuals, understanding their strengths and how to put them together. I think that’s something that I really brought away from, you know, that type of team environment. Um, so I think that’s one part of it. And I’d say the second part is, um, frankly, a very, you know, strong, um, you know, what I’ll call a mission focus or very success orientation, right. You know, oftentimes we share the same goals, but we have different routes or different preferences on how to get there, right. And working through people or with people on how to get to that goal and, you know, trying to align people and understanding people will shift from that alignment over time. And the patients that goes along with that, I think those are the kinds of things. So what you hear me saying is, um, you know, putting the right team together based upon the skill sets that you have available, um, understanding the different perspectives that people have along that path. And ultimately, you know, staying focused on the, you know, where you want to get to, right. The ultimate goal for the collective

JP Maroney:

Mike Tyson has a quote that he’s quoted well, everybody has a great plan until they get punched in the face. Right? So I want to talk about that in just a moment, if you’re watching or listening to this episode of the deal flow show, you can get access to our archives as well as future episodes, by going to the deal flow, show.com the deal flow show.com. Let’s talk about the setbacks, because as you mentioned, you said, we’d like to make great decisions. And I believe in a business like yours, where you’re playing that long game, I want to say that it was, um, maybe the, who was the GE CEO for so many years or gee, Oh, come on. Tell me guys anyway, he said, um, great. CEO’s, you know, they have the ability to see around Jack Jack. I believe it was, I believe it was Jack that said your CEOs have the ability to see around the corner. And so when you’re playing this long game, you’re trying to obviously navigate all of those possible pitfalls and minefields, if you could make the analogy, but when you do hit the wall, when you do make a mistake or when market forces are at play and beyond your control, you have to reset how do you, as a CEO walk through that mentally, as well as tactically.

Brad Truesdell:

Yeah. So I’ll, um, you know, I’ll use a unfortunate example. We can all relate to write with COVID right. So, you know, how did we deal with that? You know, what are the actions that we took immediately and then, you know, subsequent to that. And so I think that there’s, you know, number one is how do we make sure that, you know, in my, for instance, how do you know the workforce is stable, they’re healthy and they continue to work, you know, at pace. Um, and you know, so, you know, making sure that they have the resources to work from home and that, for instance, um, but also, you know, taking some financial steps to make sure, Hey, we tightened down on things and get some more cash, um, you know, set aside, you know, so we can elongate, uh, you know, our cash per right.

Brad Truesdell:

So tighten up, you know, some of the tighten up our belts, you know, um, you know, take care of our people, make sure that they’re healthy so we can run the business. I think there’s also, you know, the mindset, you know, kind of shifting a little bit, and this is whether it’s, you know, um, with, you know, capital raising or with, um, you know, respective deals with a, you know, uh, with customers is that there are, you know, for every 10 deals, you know, one will come through on time and all that kind of stuff. Right. So you have to be prepared, you cannot single thread at every single thread, everything, right? So that means, you know, having a primary, secondary, and backup plan all the time and continuing to build up those options for you so that, you know, you move, you know, one thing through the funnel.

Brad Truesdell:

Fabulous. Alright, now let’s move on to the next thing and so on and so forth. Right. And that, that has led to, you know, our ability to grow the company from a revenue perspective. It has allowed us to successfully raise equity, as I talked about before, uh, on time. Um, and, you know, frankly do all the things you’d expect from a business and a well run business, right? You pay your employees, you pay your creditors, she pay, um, you know, everybody that you, you know, all the, all your payables. Right. And we’ve done that on time, uh, and taking care of our people as a result. So very much a, you know, mindset of primary, secondary, and tertiary, and be ready for contingencies.

JP Maroney:

Yeah. Is, um, and again, always try to preface it with you. Don’t have to tell a certain things, but is it all equity for the financing or do you have a stack and is, does debt figure into this longterm, or like, for example, when you have special projects where you said you had had to stack up your team to be able to fulfill some of these projects or these types of things that you can use debt or lines of credit or things like that, as opposed to just financing with equity, to continue to maintain your valuation and, and dilution with your company.

Brad Truesdell:

So the answer is yes. I mean, I think in, in JP, you certainly know this, the, um, you know, the earliest stage companies are appropriate for equity because of the uncertainty of cash flows. Right? Sure. Um, and I think, you know, now we are moving beyond that where, you know, our cash flows are, you know, much more regular number one, and frankly, you know, they can sustain a debt load. So we’re moving into that where, um, you know, things like a line of credit or a term, you know, from a debt perspective may be appropriate. Um, you know, but proceeding this point in time, um, you know, the, certainly the majority of, uh, you know, outside capital has been here.

JP Maroney:

Sure. It’s just too predictable or early those in those early stages. Absolutely.

Brad Truesdell:

And, and, you know, our, our, our, um, you know, our collateral, uh, or lack of collateral is, I mean, basically it’s labor and laptops for us. Right. We don’t have any meaningful collateral at this point. Yeah.

JP Maroney: 

Yeah. Those folding tables. That’s right. That’s right. Uh, what kind of people would you like to connect with from our audience, our other guests?

Brad Truesdell:

Well, I think that, and I appreciate the question would be, um, number one, um, we are serving a unique market. Uh, that’s atypical for many early stage companies. Right. You hear me talking about enterprise, you hear me talking about defense, um, and that’s, you know, investors who are comfortable with that. Number one, and number two, uh, investors who are comfortable with the technology and, you know, it’s frankly deep technology, right? It’s robotics, it’s software for those robotic systems. Um, so it’s, you know, it’s very atypical than I think many people will get involved with. Right. Um, but if people are willing to take the, you know, take the time to understand what we’re doing, they can see the impact on it. Number one, and number two, see how sticky it is with customers. You know, we’ve gone from five figures to six figures to seven figures with customers, and it’s because we’re delivering great products and, you know, we’re off to a good start.

Brad Truesdell:

Are you all doing anything in agriculture? We are not today. Okay. What about the space industry too? So, um, so, you know, being here on the space coast, right. Uh, so the way that I would describe, um, our work with, you know, government agencies today, and certainly the space industry will absolutely. And is using automated, you know, uh, autonomous systems today or robots today, um, to date, you know, so as a, for instance, how many Mars rovers go to Mars? Right? It’s a handful, right. It’s not many. And ultimately our business is predicated upon, uh, selling more and more licenses of our software, right? So when we sell to the government is really for those, you know, um, high volume opportunities that allow us to, you know, again, scale, you know, the, the volume of product that we sell, vice, you know, a specialized development for a single application, like a Mars Rover.

Brad Truesdell:

That’s, that’s why we have not done anything with the space industry thus far. Terrific. Um, would you like to share something about yourself that otherwise the business community or your, or our audience would not know? Yeah, I’d say that, um, you know, one of the things that, um, I’m very proud of with our business is, you know, I talked about my service in the military, I think, you know, alongside that is, you know, certainly we put together a great technical team. Um, but I think I’ve made a very, um, you know, thoughtful, uh, effort to hire veterans. And, you know, and this is about a third of our company is a veteran of one sorter or another right. Marine Corps, you know, army air force or Navy, um, no space for us as of yet. Um, and so I am, you know, I’m very pleased about that.

Brad Truesdell:

And I think that’s something that, you know, I am, you know, I want to continue to do, you know, uh, because it, um, you know, I think we all are collectively understanding of, you know, the last 20 years has been hard on that community. And we want to make sure that as people transition out, they have good professional opportunities. And I’m very pleased about that for that community. But in general, I mean, I think, you know, what we’ve done at Tomahawk robotics is create high paying technology jobs that allow people to lead a good life, um, you know, and you know, a good solid middle class income. And I’m very proud of that.

JP Maroney:

A potential future for Steve Carell at Tomahawk robotics, right. It was new show space force. Alright. So how would folks get in touch with you? What would be the best or easiest way that if audience members want to reach out, you can give email address, phone number, web whatever’s work.

Brad Truesdell:

Yeah. So Tomahawk, robotics.com. Um, all one word Tomahawk, robotics.com, uh, and then Brad dot truesdale@tomahawkrobotics.com is my email. So reach out to me if there’s any interest in discussing what we talked about further.

JP Maroney:

Excellent. Maybe it’s just on some other shows as well. That’d be good. Some exposure for the company. Excellent. Once again, this is the deal flow show, and if you’re listening or watching this episode, you can get access to future episodes as well as our archives@thedealflowshow.com. Once again, Brad Truesdale from Tamaki robotics. Glad to have you on the show on behalf of my cohost here and mr. Paul Nicoline, AKA Paulie walnuts to say that I’m JP Maroney from Harbor city capital and the deal flow show team, and a special shout out. And we’re going to get him up here for a picture in a minute, mr. Daniel, [inaudible] who a you hired while he was still in college as a, as an intern, and then migrated as one of your full time employees until we stole him from you. So guys, we’ll see you again in a future episode of the deal flow show. Take care. Bye bye. For more episodes, visit the deal flow show.com and subscribe.

October 12, 2020

Brad Truesdell CEO of Tomahawk Robotics and Former Navy SEAL on Raising Capital




Description:
Brad Truesdell is Founder & CEO of Tomahawk Robotics. Tomahawk Robotics is a leading innovator for robotic control solutions. They are committed to driving enterprise adoption of robotics by reducing cost, optimizing system performance and improving ease of use through intuitive, user-centric design.

Brad talks about his experiences raising capital for Tomahawk Robotics and building the company from the ground up. He provides a unique take on the capital raising process and draws from his experience as a Navy SEAL and how those skills translated over to running his business.

What you’ll learn from this episode:
– Unique perspective on starting a high tech start up
– Challenges associated with raising capital in the robotics space
– Mindset of a successful entrepreneur and Navy SEAL

Connect with Brad:
LinkedIn

Full Transcript:

JP Maroney:

Welcome to another edition of the deal flow show. I’m JP Maroney, your host, along with my cohost for this episode of mr. Paul Nicoline, you seem to be on a lot of episodes. I am mr. Paul Nicoline here from Harbor city capital, and today we have special guests and actually you’re our first in studio guest. So it’s great. And in amongst all this covert, as well as having a lot of people from out of town, it’s a pleasure to have you in the studio with us, mr. Brad, Truesdale from Tomahawk robotics. And, um, my little bit of history that I have from Tomahawk robotics comes from our producer for the deal flow show. Uh, Mr. Daniel Penaranda who went to work for you guys while he was still in college?

Brad Truesdell:

That’s correct. Yes. Uh, yeah, he’s one of, uh, uh, within one of the first 10 employees that we had at the company.

JP Maroney:

Well, I heard lots of good things about the business and I’m very fascinated by where y’all are going both with the technology as well as the initiatives and the thing, the areas of business. So I can’t wait to get into that. If you’re watching or listening to this episode of the deal flow show, you can get more episodes and, um, get subscribe or follow us for future episodes@thedealflowshow.com. So I know you have not always been with Tomahawk robotics, so I’d like to back up just a little bit and talk about how you got involved in the business world, what you started doing, where you started out, and then maybe lead up and talk a little bit more about Tomahawk after that.

Brad Truesdell:

Sure. So my back story is a native of Florida, uh, where we’re located today and, uh, grew up down here and then went off to college and then following college into the Navy and, uh, spent 1998 to 2007. So about nine years in the Navy. Uh, during that time I was a seal and, and this is what kind of, you know, leading into Tomahawk robotics had the opportunity to use, uh, some of the first, uh, robotic systems that were employed by small units, uh, both air and ground. And so had that opportunity, um, you know, during my time in the military. And then following that, um, left the military in 2007, falling in injury, uh, went to business school and then subsequently to that, uh, worked at Harris corporation, uh, here in Melbourne, Florida, and then, uh, worked there from, um, 2009 to, um, 2017 and then started Tomahawk robotics in 2018.

JP Maroney: 

I found, I remembered that you had former Navy seal. I probably wouldn’t have been saying the things that I said when you came in the door to the

Brad Truesdell:

Actually with, uh, with working at Harris, didn’t you meet a professor at Harvard? Is that how that evolved? Yeah, so, um, one of my professors, a gentleman by the name of Steve Kaufman was sat on the board of Harris at the time. Uh, he was a former CEO of arrow electronics, and, you know, fortunately for me, we struck up a nice relationship during my time at business school. And, uh, you know, he’s very encouraging of, um, you know, trying out a role at Harris. Um, and he was very nice in helping me facilitate a great entry point. Um, and you know, Steve is, um, uh, certainly knowledgeable about the industry. You know, I went to business school a little bit later in life than most people because of my military service. And also I just frankly, wanted to give back, um, you know, what the same motivations that pushed me into wanting to join the military in the first place, uh, you know, patriotism wanting to do something important, impactful for our society, um, made me want to go back to work for the aerospace and defense industry. And Steve, you know, helped me, uh, along that path. And so, uh, you know, it turned out to be a great thing, you know, joining Harris, learning a lot about, uh, the industry and frankly, how to run a business. Um, you know, I learned things there that I wouldn’t have learned, you know, doing a many other jobs and as you know, subsequently prepared me well for Tomahawk robots.

JP Maroney:

Terrific. When did you get the entrepreneurial itch?

Brad Truesdell:

Well, um, originally I think, you know, two things I’d probably go to that point. So number one, my parents owned a business themselves, and so I got to see that, you know, their own, um, you know, the highs and lows that they dealt with when they started their own business. Right. And they started a relatively, uh, um, you know, late in life. Um, and, uh, you know, uh, you know, let’s say middle of their careers, probably a better descriptor for it. Um, and you know, they build up a good business and a good living for themselves and, uh, you know, after school and during the summers, I worked for them. And so I got to see that, um, you know, both the, again, the goods and bads of that. Um, but I got to see how impactful that, you know, good management, a good culture could be on, you know, their coworkers or their employees lives.

Brad Truesdell:

And that’s something certainly that I, uh, took away from that experience. Um, so that, you know, that certainly that, you know, kind of formative experience that I lived through, but also I think that, um, you know, as you progress through your, your own careers, right, you learn things as I talked about, you know, both during my military time, my education and at Harris, and at some point, you know, you want to take a swing yourself, right. And I think that’s, you know, I got to that point in life and I was ready to, you know, I felt prepared and I felt like I could do something, um, more impactful on my own.

JP Maroney:

When you go from having the resources of a Harris behind you to running a small team on your own seal team, so to speak in an entrepreneurial effort, how did you make the transition to that? Knowing that, you know, you don’t have the big backing behind you, it’s up to you, you got to eat what you kill and things like that.

Brad Truesdell:

So I think that, um, you know, so there’s a resource element and then I’ll, I’ll call that the, you know, the mindset and the ability to trust yourself and operate on your own. So that certainly came from the confidence I gained during the military, that I would have that ability, right. Confidence in yourself to, you know, make smart decisions or make mostly smart decisions. Certainly we get some wrong all the time. Right. But, uh, I think I, you know, created that confidence because of, you know, frankly the, uh, the fire and experience I had to deal with, you know, during, uh, you know, the time I served in the military. Right. So that was very formative on me. And then to the point of resources, um, yeah, it was certainly tough starting out, you know, and it’s funny, uh, and we’ll get into this more, you know, we’re about to commission our new building, right.

Brad Truesdell:

And it’s a significant improvement over where we started the, you know, the first office, um, you know, my partner and I are, and, uh, you know, Matt, some of the gentlemen I started the business with, it was literally as big as this table. Right. You can lean over and slap the other guy if you want it to. Um, and we’ve grown since that time into, you know, we’ll be moving into about an 8,500 square foot building. And I think that, um, you know, making that transition was at times tough, but it taught you such good lessons about being, uh, resourceful. How did you know how to do more with less, um, you know, how to work through all the books, you know, again, having good educational experiences and good business experience has helped me do that, but forcing me to do those things, you know, it’s certainly made me a better business manager and frankly, um, uh, more adept, I think just general, you know, dealing with the highs and lows of running a business as well.

JP Maroney:

I’d like to know, tell us a little bit more about Tomahawk, robotics, exactly what the services are, the, what you provide to companies

Brad Truesdell:

So forth. Sure. Um, you know, I’ll tell you what we do and I’ll give you an analogy to kind of, you know, maybe baseline this for a broader set of, uh, an audience. So what we do is we make software that makes robots easier to use safer and more effective. So think about what windows did, you know, 30 years ago in the PC industry stacking on software to make laptops or PCs at that time, much more capable and make it a tool from, you know, that, you know, the entry level employee could use, you know, mid level manager engineering team, or the CEO could use that whole spectrum is what we’re doing for robotic systems today. And we focus not on, uh, robots in let’s say a manufacturing environment, but rather robots that people will have to interact with on a regular basis. Things that they typically call field robotics. So things used outside dull, dirty, or dangerous jobs, oil and gas mining, and certainly the defense industry as well.

JP Maroney:

That led into my next question then who, who’s your customer? Who’s your client?

Brad Truesdell:

So fortunately the good news is we have a few. Um, and, uh, as of, um, I guess about a quarter ago, we actually have customers on three continents, uh, Australia, North America, and Europe, um, and our customers range from, uh, here in the U S national labs, defense agencies, you know, both in Europe and Australia, as I talked about, uh, but also large enterprises, um, you know, people who build robots, um, examples of that would be, uh, companies like Baker Hughes, you know, from a large oil and gas perspective. Uh, but also, you know, again, people who build robotic systems, okay.

JP Maroney:

I want to get into the deal flow process and talk a little bit about how, because you all play a very long game in terms of business development. So it was very much a long game. We’ll get into that in just a moment. If you’re watching this episode or listening, this is the deal flow show. You can get more episodes, subscribe, and follow us for additional future episodes@thedealflowshow.com. So again, the deal flow show and the whole idea of our content is we obviously want to introduce people to great companies, great leaders, operators, but we also are going to share back a lot of this content in a book called dealmakers deal breakers. So I want to talk about the deal makers for you. When you go into a new environment where you’re going to be working potentially with a new strategic partner or a potential client, what’s your process of preparation for the deal flow for the deal process or the deal making process? How do you, my guess is some of that, and I’d like to even get deeper into the background with military, but I’m guessing a lot of what you did there in preparation for a mission maybe you’ve carried over, but how do you apply it specifically to the deal making process?

Brad Truesdell:

Yeah, so I, I think, um, with the context of Tomahawk robotics in place, I think there’s really two main, um, two main elements that I go, I start with from an assessment perspective. So number one would be, you know, do we have technology alignment, right? Is there, you know, is there a, you know, appropriate technology, um, you know, intersect between our company. So as a for instance, uh, we just signed a partnering agreement, uh, within the last 30 days with Samsung electronics. Right. Great opportunity for us, you know, huge, you know, one of the top makers of cell phones in the world, you know, by volume, right? So in that, for instance, they have a product, um, you know, it’s called a Samsung galaxy S 20, where we put our software on and you can use that to run robots from, okay, so technology alignment, they have an end user device, we have software and we put it on that phone to run robots.

Brad Truesdell:

Right. So that’s number one. And number two would be, um, and I’ll use a bit of a military term here, but the human terrain, you know, who who’s on the other side of the table. Right. And this is certainly I’m sure no surprise to you that I’ve gone to this part of the discussion. Um, do we have somebody who has, or shares similar motivations, um, you know, do they see the vision of the combined technology in a similar way to us? So those are, you know, the, my first two, um, you know, ways to assess things. Um, and certainly, you know, beyond that, after we kind of moved through, can I make a deal? Does it make sense from a technology perspective next, what are the deal terms, right. Um, you know, is this a situation where both companies will benefit and it’s easy and understandable? You know, those are the kinds of things that I certainly, you know, kind of work

JP Maroney:

My way through. How do you bring the people together? Cause you know, we talked about Daniel joining your company. It was very early first in the first 10, first 10 employees. So how do you pinpoint, I was talking in fact, I kind of did a little bit of a training slash article the other day, talking about surrounding yourself with people that fill the gaps, but what is your kind of approach to sourcing the right people for the deal process?

Brad Truesdell:

Yeah, so I think, um, you know, certainly from the other side of the table, you know, the people that we work with, I think you, what I typically look for is, you know, we do some do deal diligence ahead, identify, um, you know, people we want to work with our company targets that are appropriate for us, right. May contact, um, and then kind of assess them through, you know, a getting to know you phase. Right. And I think that getting to know you phase typically for us is, Hey, we’re working together. You know, as a, for instance, with Samsung, we were buying product for them before we signed a partnership agreement, you know, uh, and you know, smooth, you know, kind of a smooth relationship there. They were supportive of us, you know, good terms from, you know, buying products, supporting the products, you know, all those things that you’d want to have in place before leading up to an actual partnering agreement. And that, for instance, right. So what you hear from me is, um, you know, kind of the, uh, you know, let’s call it a trial run, right. You know, you have that, you know, get to know your face, that’s predicated upon, you know, doing good business together. And I know that’s a little bit different because we’re talking business to business versus maybe a kind of an investment, you know, um, take on things, but that’s how we worked through it.

JP Maroney:

Well, we don’t, and I want to talk about that, the investment side of things in a minute, but we haven’t actually had a lot of issuers or a capital raise or founders in here. And I definitely want to get that take on it because as you have lived the CEO of a growing company like this, a lot of your work is making sure, making sure you got money to do what you need to do in the business. Right?

Brad Truesdell:

Yeah. So the idea of a Tomahawk robotics, how did it evolve? Was it, was it something that when you were in the military, it started to tick in your mind that this is something that’s needed and you could take it to fruition. You could take it to the, to the public now, can you talk about that? Yeah. So I think, um, like many early stage technologies, often they, they, you know, when they first kind of debut there, they’re challenging to use, right. There’s a lot of difficulties let’s, you know, impediments to effective use. Right. And certainly, um, robotics that I experienced were, you know, reflected that. And so, um, you know, I think that, you know, gave me the idea of, you know, the, you know, um, this technology is going to have a profound impact on the way people do business people, you know, serve in the military, how they keep themselves safe.

Brad Truesdell:

Right. So I think, you know, I saw that in certainly, you know, thousands of other people saw that, right. So there’s nothing unique there, but I really was focused on, and this is, you know, because of, you know, where I served and, you know, the units I served in, um, you know, ultimately, you know, my hope and my goal with this company is to give people technology so that, uh, you know, reduces risk to human life. Right. And so for me, that those were the motivations that kind of, um, you know, propelled me to found Tomahawk robotics. I think that, you know, those, you know, the, kind of the, the challenges of use in a, in a, you know, in a tough environment like Iraq or, um, you, the, the ultimate goal of, you know, allowing people to do their job more safely is what I was going for now.

Brad Truesdell:

I think that, you know, that needs to be combined with, you know, those motivations are certainly good, but combining those with, you know, the business side of things, and frankly, the industry exposure that I got, you know, subsequent to my time in the military was very important. Right. Um, who are the buyers? How do they buy, what are their really technology problems? You know, how can you insert a technology? Like I just talked about into the industry with, um, with, with as little friction as possible, right? How do you make a product that actually people can buy and use, uh, you know, easily, and that does actually make their, their end products or their, or their mission better, depending upon the user.

JP Maroney:

Had you ever had any experience raising capital before Tom hunt? No.

Brad Truesdell:

And it, it was certainly, it was a learning experience.

JP Maroney:

It’s easy, right? Yeah. I mean, all you gotta do is go out there and just ask people to write a check. That’s right. We’ll get into that just a minute. This is the deal flow show. I’m JP Maroney, along with our cohost Paul Nicoline, we have a special guest on with us, Brad Truesdale from Tomahawk robotics. If you’re watching or listening to this episode, you can get access to our archives as well as future episodes and follow us and subscribe@thedealflowshowdotcomthedealflowshow.com. So let’s talk about it, the, the necessary evil of raising money, I guess, in growing a business and, um, you know, good products, good companies, good ideas, as long as you’re telling the story, right. Do attract capital. So it doesn’t have to be hard or complicated, but it is a process, right. Can you walk us back to the beginning of how you raise the first seed money? Cause we are going to have folks watching these episodes that are in their first venture first time raising whether it’s friends and family, or a first round of capital all the way up to we’ve got sponsors and deal makers, broker dealers that are watching. So walk us through that early process that y’all took to get the money in the bank.

Brad Truesdell:

Yeah. So we, uh, and just, we’ve gone through two capital raises thus far, and I’ll talk about the first one, I’ll focus primarily on that and you know, how things, uh, went there. So we, uh, bootstrap the company initially, um, you know, we wanted to validate the ideas, Hey, can we actually attract customers and all those kinds of things. Right. Um, you know, not a novel concept for sure, but we wanted to show a little bit of traction and, and frankly give, give our investors confidence that we could, you know, deliver on the products that we said we could. Right. So for the first, um, Oh, roughly nine months, the company’s life, that’s where we focused on. And by the time we started raising capital, we had a half dozen customers. Um, and then from that point forward, what I focused on was, um, capital providers here in the Southeast, you know, Florida, primarily in Florida in the Atlanta area, uh, you know, Georgia, you know, and, and the reason for that was, um, you know, certainly there’s a significant population down here, but it’s not as dense as a, for instance, as an Atlanta, right.

Brad Truesdell:

So those are the, really the two geographies that I on. Um, and in that, you know, I, I went to, um, you know, small equity providers, you know, venture capitalists, um, you know, again, regional type venture capitalist here in the Southeast and wealthy individuals. Um, you know, today we have a mix of both, uh, as part of our cap table and, you know, just, um, what I did was, you know, kind of share my story, the background, you know, the expertise that, you know, both myself and my partner had when we started this company again, Matt Sommer, um, by himself, by the way, he’s named on nearly 40 patents. So a very, uh, accomplished technologist and engineer in his own. Right. Um, you know, but even then it was, it was, it was challenging. Um, you know, what we’re doing is, um, fairly specialized number one, and number two, um, you know, the first money in is always, always the toughest.

Brad Truesdell:

Right. And I think that, um, you know, we had to work through that process, educate people about where we were focused, the markets that we’re in, you know, or are generally, you know, I think to some, you said JP was the, uh, um, you know, we’re selling business to business or business to government that is a long sales cycle. Right. And many investors saw that and they were nervous about it and rightly so. Right. So, you know, how much money would you need, uh, how long would the sales cycle take to actually show, you know, uh, positive traction. Right. And so that was one of the, again, one of the reasons why I did want to have some customers at the table already, um, but you know, this is a very different business than, um, you know, let’s say doing something in consumer space where there’s a, you know, much more rapid cycle time.

Brad Truesdell:

Um, you know, but on the flip side of that, uh, we did have some people who saw what we’re doing, you know, believed in, you know, the capabilities of myself and the co founder, Matt summer again, and, um, you know, had confidence in what we could do. And I think, um, you know, when we raised capital in 2018, we pulled in about two and a half million in total, and it allowed us to, you know, take our product from what I would call a very nascent, um, poor, limited feature set state into a much more capable state, um, you know, over the, you know, the following, you know, 12 or 18 months. And we’ve continued to build upon that, you know, certainly, um, as we, you know, again, raised a second round of capital and continue our growth today. Excellent. The, is the second round ongoing now, uh, we completed that in, um, Oh, just the tail end of 2019.

Brad Truesdell:

And the intent there was, um, at the time we had we’d scaled from, you know, when I raised capital, we were at about while we were three people. And then, um, you know, we scaled up to about 15 people. Um, and now we’re just pushing 30 and that’s that second traunch of capital was intended to allow us to hire some additional talent in, uh, so we could meet some contractual commitments that we had on the table. Um, and unfortunately that all turned out well. And, um, you know, today I think the good news is, is that, you know, our capital burn is extremely, uh, small, um, you know, uh, you know, generally we’re running about $70,000 in burn per month. Uh, and certainly there’s variation. And, you know, the month before or last month was about $20,000. So, you know, running the business relatively conservatively and scaling up as, you know, kind of business opportunities avail themselves.

Brad Truesdell:

And frankly also, you know, because of the economic conditions, the uncertainty associated with COVID, we’re probably, um, have more cash in the bank then, you know, is probably typical for a company of our, you know, where we are in, in kind of the maturation process. How has COVID affected you if at all, has COVID heart, the, yeah, absolutely. So one of the things, you know, I talked about business, the business and business government, a lot of those sales are, you know, face-to-face demonstrations, trade shows, you know, getting on planes, going to see somebody, you know, and frankly giving them confidence in what you have is, is something that’s real. Um, and you know, those, the inability to do that in many, in many instances has certainly slowed, um, you know, slowed the, you know, the, our pipeline, right? It’s, it’s, it hasn’t, let’s say it hasn’t caused a drop in our pipeline pipeline, but slowed it. So this year we’ll, you know, we’ll triple revenue again this year, which is, you know, which is fabulous. However, I think we could have done more if COVID had not hit for the reasons I just told you.

JP Maroney:

Yeah. What’s the future then. So obviously you’ve got the burn under, under, um, a conservative number is you said, but what is the future like in terms of capital raising for the business, if you can share that.

Brad Truesdell:

Yeah, sure. No problem. I, I think that, um, you know, the good news is the, you know, the market for robotics is growing significantly. This is absolutely a growth market. And we have a lot of opportunities ahead of us. And I would say this, that, um, I view fundraising and I, you know, I will likely, uh, execute an additional fundraising 20, 21 to scale up to again, meet a few business opportunities that we have in front of us. And the intent there is that, um, with having, you know, frankly, as you guys know, having some dry, dry powder gives you opportunities to do things maybe a little bit quicker, uh, and, or, um, you know, grow the business in a way that you could not do necessarily organically, right? So we’ll weigh those things out, but there’s a likely, a strong likelihood that I’ll do a raise in 2021

JP Maroney:

Is the, again, I’m not sure what all you can speak to, but as the exit B acquired go public, what continued to just grow organically, maybe acquisitions? What, what is the, the landscape for you?

Brad Truesdell:

So I, I think that, um, a couple of things here is that the majority of, um, exits in the robotic space have been two strategics of one variety or another. Um, as a, for instance, there’s a company called six river systems that recently was sold to Shopify. Um, they’re in the, uh, robotics, you know, for warehouses. Um, and the guys did great and sold to, you know, a growing company, a strategic in the case of Shopify. Uh, and they did extremely well for themselves in their early investors. Um, and there’s been other companies like that endeavor, uh, was sold in the last 12 or 15 months to FLIR. Uh, again, another situation where, um, you know, a good turn of events for the early investors. I think that those examples and others like them, um, show that number one, there is a relatively strong appetite among strategics for, um, you know, robotic technologies out there.

Brad Truesdell:

Um, you know, but that being said, I think, you know, um, as long as we, you know, frankly develop a great product, continue to deliver for our customers, we will have plenty of opportunities in that regard. Um, so I think certainly strategics is an option for us. And I think number two would be, um, you know, is there a path, you know, potentially to an IPO I’d like to think so. And, um, you know, I think, you know, I’m rather, um, I think, you know, rather open to any of those paths, as long as it comes back to the things I talked about, um, you know, wanting to create a technology that ultimately makes people doing Dole, dirty out outdoor jobs, uh, allow them to do it more safely. Right. So that’s, that’s kind of, you know, my, you know, my, uh, North star for how I make those decisions.

JP Maroney:

Very interesting. Let’s go, can we go back to your background as a seal? Sure. Um, any of those, I mean, there’s some obvious ones that come to mind for me, but from your gut, the skills and the experience of managing a team, putting things together, things that you’ve carried over to the deal making process for yourself.

Brad Truesdell:

Yeah. I would say this, that, um, I think that, you know, my time in the military, um, in the seal teams, you know, my time overseas, uh, being exposed to, you know, uh, a wide range of challenging situations, both from, you know, um, you know, fellow fellow service members, um, you know, partners that we worked with, you know, whether they be Iraqis or, um, you know, or other coalition partners, you really have to understand the differences people bring to the table and the skill sets that they have, you know, respective to those individuals. Um, and I think seeing that and having a, an appreciation for that and understanding how to mix them in the right way to get to the ultimate goal that you, you know, that you’re seeking. Right. And, you know, certainly I made it a slew of mistakes along that, along that path.

Brad Truesdell:

But seeing that, you know, seeing that and, uh, you know, appreciation, uh, for different individuals, understanding their strengths and how to put them together. I think that’s something that I really brought away from, you know, that type of team environment. Um, so I think that’s one part of it. And I’d say the second part is, um, frankly, a very, you know, strong, um, you know, what I’ll call a mission focus or very success orientation, right. You know, oftentimes we share the same goals, but we have different routes or different preferences on how to get there, right. And working through people or with people on how to get to that goal and, you know, trying to align people and understanding people will shift from that alignment over time. And the patients that goes along with that, I think those are the kinds of things. So what you hear me saying is, um, you know, putting the right team together based upon the skill sets that you have available, um, understanding the different perspectives that people have along that path. And ultimately, you know, staying focused on the, you know, where you want to get to, right. The ultimate goal for the collective

JP Maroney:

Mike Tyson has a quote that he’s quoted well, everybody has a great plan until they get punched in the face. Right? So I want to talk about that in just a moment, if you’re watching or listening to this episode of the deal flow show, you can get access to our archives as well as future episodes, by going to the deal flow, show.com the deal flow show.com. Let’s talk about the setbacks, because as you mentioned, you said, we’d like to make great decisions. And I believe in a business like yours, where you’re playing that long game, I want to say that it was, um, maybe the, who was the GE CEO for so many years or gee, Oh, come on. Tell me guys anyway, he said, um, great. CEO’s, you know, they have the ability to see around Jack Jack. I believe it was, I believe it was Jack that said your CEOs have the ability to see around the corner. And so when you’re playing this long game, you’re trying to obviously navigate all of those possible pitfalls and minefields, if you could make the analogy, but when you do hit the wall, when you do make a mistake or when market forces are at play and beyond your control, you have to reset how do you, as a CEO walk through that mentally, as well as tactically.

Brad Truesdell:

Yeah. So I’ll, um, you know, I’ll use a unfortunate example. We can all relate to write with COVID right. So, you know, how did we deal with that? You know, what are the actions that we took immediately and then, you know, subsequent to that. And so I think that there’s, you know, number one is how do we make sure that, you know, in my, for instance, how do you know the workforce is stable, they’re healthy and they continue to work, you know, at pace. Um, and you know, so, you know, making sure that they have the resources to work from home and that, for instance, um, but also, you know, taking some financial steps to make sure, Hey, we tightened down on things and get some more cash, um, you know, set aside, you know, so we can elongate, uh, you know, our cash per right.

Brad Truesdell:

So tighten up, you know, some of the tighten up our belts, you know, um, you know, take care of our people, make sure that they’re healthy so we can run the business. I think there’s also, you know, the mindset, you know, kind of shifting a little bit, and this is whether it’s, you know, um, with, you know, capital raising or with, um, you know, respective deals with a, you know, uh, with customers is that there are, you know, for every 10 deals, you know, one will come through on time and all that kind of stuff. Right. So you have to be prepared, you cannot single thread at every single thread, everything, right? So that means, you know, having a primary, secondary, and backup plan all the time and continuing to build up those options for you so that, you know, you move, you know, one thing through the funnel.

Brad Truesdell:

Fabulous. Alright, now let’s move on to the next thing and so on and so forth. Right. And that, that has led to, you know, our ability to grow the company from a revenue perspective. It has allowed us to successfully raise equity, as I talked about before, uh, on time. Um, and, you know, frankly do all the things you’d expect from a business and a well run business, right? You pay your employees, you pay your creditors, she pay, um, you know, everybody that you, you know, all the, all your payables. Right. And we’ve done that on time, uh, and taking care of our people as a result. So very much a, you know, mindset of primary, secondary, and tertiary, and be ready for contingencies.

JP Maroney:

Yeah. Is, um, and again, always try to preface it with you. Don’t have to tell a certain things, but is it all equity for the financing or do you have a stack and is, does debt figure into this longterm, or like, for example, when you have special projects where you said you had had to stack up your team to be able to fulfill some of these projects or these types of things that you can use debt or lines of credit or things like that, as opposed to just financing with equity, to continue to maintain your valuation and, and dilution with your company.

Brad Truesdell:

So the answer is yes. I mean, I think in, in JP, you certainly know this, the, um, you know, the earliest stage companies are appropriate for equity because of the uncertainty of cash flows. Right? Sure. Um, and I think, you know, now we are moving beyond that where, you know, our cash flows are, you know, much more regular number one, and frankly, you know, they can sustain a debt load. So we’re moving into that where, um, you know, things like a line of credit or a term, you know, from a debt perspective may be appropriate. Um, you know, but proceeding this point in time, um, you know, the, certainly the majority of, uh, you know, outside capital has been here.

JP Maroney:

Sure. It’s just too predictable or early those in those early stages. Absolutely.

Brad Truesdell:

And, and, you know, our, our, our, um, you know, our collateral, uh, or lack of collateral is, I mean, basically it’s labor and laptops for us. Right. We don’t have any meaningful collateral at this point. Yeah.

JP Maroney: 

Yeah. Those folding tables. That’s right. That’s right. Uh, what kind of people would you like to connect with from our audience, our other guests?

Brad Truesdell:

Well, I think that, and I appreciate the question would be, um, number one, um, we are serving a unique market. Uh, that’s atypical for many early stage companies. Right. You hear me talking about enterprise, you hear me talking about defense, um, and that’s, you know, investors who are comfortable with that. Number one, and number two, uh, investors who are comfortable with the technology and, you know, it’s frankly deep technology, right? It’s robotics, it’s software for those robotic systems. Um, so it’s, you know, it’s very atypical than I think many people will get involved with. Right. Um, but if people are willing to take the, you know, take the time to understand what we’re doing, they can see the impact on it. Number one, and number two, see how sticky it is with customers. You know, we’ve gone from five figures to six figures to seven figures with customers, and it’s because we’re delivering great products and, you know, we’re off to a good start.

Brad Truesdell:

Are you all doing anything in agriculture? We are not today. Okay. What about the space industry too? So, um, so, you know, being here on the space coast, right. Uh, so the way that I would describe, um, our work with, you know, government agencies today, and certainly the space industry will absolutely. And is using automated, you know, uh, autonomous systems today or robots today, um, to date, you know, so as a, for instance, how many Mars rovers go to Mars? Right? It’s a handful, right. It’s not many. And ultimately our business is predicated upon, uh, selling more and more licenses of our software, right? So when we sell to the government is really for those, you know, um, high volume opportunities that allow us to, you know, again, scale, you know, the, the volume of product that we sell, vice, you know, a specialized development for a single application, like a Mars Rover.

Brad Truesdell:

That’s, that’s why we have not done anything with the space industry thus far. Terrific. Um, would you like to share something about yourself that otherwise the business community or your, or our audience would not know? Yeah, I’d say that, um, you know, one of the things that, um, I’m very proud of with our business is, you know, I talked about my service in the military, I think, you know, alongside that is, you know, certainly we put together a great technical team. Um, but I think I’ve made a very, um, you know, thoughtful, uh, effort to hire veterans. And, you know, and this is about a third of our company is a veteran of one sorter or another right. Marine Corps, you know, army air force or Navy, um, no space for us as of yet. Um, and so I am, you know, I’m very pleased about that.

Brad Truesdell:

And I think that’s something that, you know, I am, you know, I want to continue to do, you know, uh, because it, um, you know, I think we all are collectively understanding of, you know, the last 20 years has been hard on that community. And we want to make sure that as people transition out, they have good professional opportunities. And I’m very pleased about that for that community. But in general, I mean, I think, you know, what we’ve done at Tomahawk robotics is create high paying technology jobs that allow people to lead a good life, um, you know, and you know, a good solid middle class income. And I’m very proud of that.

JP Maroney:

A potential future for Steve Carell at Tomahawk robotics, right. It was new show space force. Alright. So how would folks get in touch with you? What would be the best or easiest way that if audience members want to reach out, you can give email address, phone number, web whatever’s work.

Brad Truesdell:

Yeah. So Tomahawk, robotics.com. Um, all one word Tomahawk, robotics.com, uh, and then Brad dot truesdale@tomahawkrobotics.com is my email. So reach out to me if there’s any interest in discussing what we talked about further.

JP Maroney:

Excellent. Maybe it’s just on some other shows as well. That’d be good. Some exposure for the company. Excellent. Once again, this is the deal flow show, and if you’re listening or watching this episode, you can get access to future episodes as well as our archives@thedealflowshow.com. Once again, Brad Truesdale from Tamaki robotics. Glad to have you on the show on behalf of my cohost here and mr. Paul Nicoline, AKA Paulie walnuts to say that I’m JP Maroney from Harbor city capital and the deal flow show team, and a special shout out. And we’re going to get him up here for a picture in a minute, mr. Daniel, [inaudible] who a you hired while he was still in college as a, as an intern, and then migrated as one of your full time employees until we stole him from you. So guys, we’ll see you again in a future episode of the deal flow show. Take care. Bye bye. For more episodes, visit the deal flow show.com and subscribe.

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