We had the good fortune of connecting with Stephen Alred and we’ve shared our conversation below.
Hi Stephen, we’d love to hear more about how you thought about starting your own business?
Truthfully, I am largely unemployable. I have never quit a job, always been fired. I’ve also never been at one place of employment longer than 16 months. It just doesn’t suit me to follow orders that I cannot disagree with or provide insight to.
Knowing this information I started KnowCap as a way to chase the thing I was most passionate about, helping others start successful companies. I have been doing this since I started a consulting firm in college and I wanted to create something bigger than myself that would change lives. KnowCap was all of what I wanted to pursue and more.
When I was deciding on what problem to tackle, I sought something that would take me an entire lifetime to execute on and it still wouldn’t be solved. So the problem had to be enormous! Having familiarity with startups, I directed my attention to the most underserved customers in that field by funders. What I realized blew me away and intrigued me. U.S. News published a piece in 2018 that 80% of venture capital was in four states (California, New York, Massachusetts, and Texas). That means 46 states are fighting for 20% of the capital – and I knew for a fact that the best ideas and entrepreneur weren’t being funded. Once I came across this stat I knew what problem I would be tackling.
I needed to figure out a way to work with entrepreneurs who were being intentionally overlooked, and gaslighted into believing their ideas or execution weren’t good enough. We knew from a Kauffman report that only 4.5% of entrepreneurs receive a “friends and family” round of funding. This means that you go to your friends and family and ask for money to help you build your idea into a minimum valuable product (MVP). If don’t know anything about this round, just know that friends and family have to be “accredited” in order to invest legally. The SEC says that accreditation means that you have over $1,000,000 in assets outside of your residence or income exceeding $200,000 over the last two years.
How many friends and family do you know with this kind of capital? Money is one of the most taboo topics in the country…how could you know? Yet, many of the founders I met in a consulting capacity were told by investors to get friends and family money before coming back to the investor for a pitch. Which is, frankly, utterly ridiculous.
After witnessing how risk-averse investors were, I knew that there was an incredibly huge problem we could address. We could replace the “friends and family” round of funding. By doing that we would be owning an entire level of the economy. This level is where future investors and banks would have to come to in order to get any business. Then the founders in our portfolio would have more agency to dictate terms and own their future optionality in a way that was not possible three years ago.
I designed KnowCap to help people, who have an idea, get a chance to pursue that idea and find out if it’s viable enough to grow into a full-time company or stay as a side hustle. We pull together some of the best operators across multiple disciplines to help founders navigate: branding, marketing, product design, engineering, operations, fundraising, and hiring. We figured if we can help a founder which each of the critical pillars of building a company, that company is much more likely to be successful than if an entrepreneur learned on the fly or read it in books without the proper context.
What should our readers know about your business?
I believe that what I’m most proud of is that our founders get the resources they need to build out their vision. Some of these people have hired team members, others have dozens of clients, others have raise venture funding. Without our belief in them when they only had an idea and passion, they may not have reached those goals as soon as they did.
Also, even though our organization doesn’t exclusively work with people of color, I am proud that 90% of our portfolio are minority founders. I was in their shoes. No capital or resources and no one wanting to give me a chance to build the business I dreamed of. It feels amazing that we are now in a position to help in a meaningful way.
Any places to eat or things to do that you can share with our readers? If they have a friend visiting town, what are some spots they could take them to?
Ohh you do not want to ask me this…
Breakfast: Waffle House, El Tesoro, Little Tart Bakery, Proof Bakery,
Lunch: BarTaco, Lee’s Bakery, Gus Dumplings, Bocado Burgers
Dinner: White Chapel BBQ, Yokohama Suhi, JINYA Ramen, Stone Bowl House
Activities: Monster Cookies, Piedmont Park, Hawks/Atlanta United Game,
Drinks: Pure Taqiuiera (rooftop only), Brash Coffee, Sweetwater Brewery, The Imaginarium,
Who else deserves some credit and recognition?
I believe that my partner, Erin, is the only reason that KnowCap has been as successful as it is. Not enough spouses and significant others get their credit for their part in the entrepreneurial journey. There have been many days where she has to pick up my slack and call me out on things that I shouldn’t need to be reminded of. She’s patient and encouraging, yet strong and powerful.
In reality, I’ve been trying to recruit her to run the company for years. I believe she is so much better at leading, managing, operations, processes…really everything. I regularly (read: daily) ask her for advice on how to handle a situation or for feedback on how a situation was handled. She always has a better answer.
I also want to shout out our team at KnowCap. They joined because of a vision and not much else. Here we are. Expanding into a new region, investing in successful founders, and building up this organization together.