How 60% of Startups Fail Legally and Use AI to Get Affordable Legal Support with Stephen Candelmo

Stefan Candelmo: advent of AI and technology, I really saw an opportunity to democratize legal support to these companies. And that is really where I started with Parallax where 60% of all small businesses in the United States, even though they have legal issues, never work with an attorney. They're signing things which they shouldn't have signed or they mistakenly give away equity in their company and they're coming to me saying, "What do I do?"

Jay Combs: Meet Stefan Candelmo, corporate attorney, entrepreneur with over $3 billion in transactions and decades advising IPOs, startups, and deep tech ventures. He's now revolutionizing legal access as founder and CEO of Parallax.

Stefan Candelmo: I have clients and Parallax that work with big law firms and when they start telling me I'm afraid to talk to my lawyer because I'm going to get charged. We are seeing a behavior change. I am often getting agreements say hey can you review this agreement but these are agreements that my client is drafting on ChatGPT at the heart of a legal relationship is trust fiduciary relationship confidentiality security so forth that is why we ventured through this thought that it could never just be pure AI is there a common mistake or a damaging mistake that new entrepreneurs make and what do you wish they would ask sooner to avoid that very damaging mistake. It really comes down to a couple things.

One,

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Don't miss out. Welcome to the Good Decisions Podcast. the podcast about the pivotal moments that shape companies, careers, and the human decisions that drive AI and technology. I'm your host, Jay Combs.

Today's guest is Stefan Candelmo, the founder, serial entrepreneur, inventor, and corporate attorney with nearly three decades at the crossroads of tech, law, leadership. Stefan's hand has guided over three billion in transactions, IPOs, venture deals, major exits. And while he's launched several tech platforms, he's authored uh foundational articles and he now leads Parallax, a startup delivering on demand legal expertise for founders when they need it most. Stefan, thanks for joining us today.

Welcome to Good Decisions. How are you?

Stefan Candelmo: I'm doing great, Jay. Thanks for having me. And by the way, I think you should you should always introduce me. Like just hearing that I'm like, wow, am I that old?

Uh but yeah, thank you. Appreciate it.

Jay Combs: Yeah, wealth of experience. I really want to dive into it. uh especially with the law and the legal industry which has a reputation for being slow to adopt uh new technology but you've just launched a new legal tech company Parallax. Can you tell me about it and how it differs from other companies in the legal tech space something like Legal Zoom or Ironclad or Harvey?

Stefan Candelmo: Yeah, absolutely. So just a little bit of background about myself first and that is close to 30 years as you mentioned as a corporate attorney and um along that time I've just seen uh unfortunately uh a lot of clients come to me and I specialize in working with startups and small businesses and they come to me where they did not opt in to actually get some legal advice or support and actually then we have to go and try to unwind the mistake and the reason why and what I've learned over the past couple years is that they're opting out is because the industry unfortunately makes it somewhat cost prohibitive. It doesn't really allow easy access uh to get the legal support that you need when you need it. I think it's a growing problem in the legal market particularly because we're so wedded to the hourly rate, right?

So, you know, I charge a lot of money uh on an hourly basis. Uh actually, I'm a bargain compared to my former big law national law firm colleagues. And with the advent of AI and technology, I really saw an opportunity to somewhat democratize legal access for legal support to these companies. And that is really where I started with Parallax.

Really solving that problem where 60% of all small businesses in the United States, even though they have legal issues, never work with an attorney. Can you believe that? I mean, there's 33 million small businesses in the United States. I mean, I'm not surprised, but that sounds crazy, right?

And they have legal issues, and 46% of those legal issues are usually business related, like contracts and so forth. They're signing things which they shouldn't have signed or they're signing things where they don't really have understood them or they mistakenly give away equity in their company and they're coming to me saying, "What do I do? this person just walked away and he or she just walked away with 25% of my company. I wish you would have talked to me before, right?

That's the quiet voice in my head. I don't try to remind them of that. So, Parallax is this platform that can provide endtoend legal support for small businesses and startups, you know, on a fixed fee basis that's on demand where it's delivered via software where the legal services are provided through they're AI assisted but verified by an attorney. thereby reducing cost and time by up to 80% compared to a traditional law firm or lawyer.

So, it's really this new way of being able to access and deliver legal support for these businesses. And um I'm really excited about the prospect and where I think the industry is moving. And as Wayne Gretzky used to say, you know, it's always about knowing where the puck is going to be. And I feel like we're trying to play where the puck's going to be.

So that's Parallax.

Jay Combs: the hourly rate, like the billing model, the business model for law firms is based on doing as much work as possible within an hour or over a period of time. And that to me, having worked in the contract management space for a little bit too, is a huge challenge or a huge barrier to uh to tech being adopted, right? Like why work quicker if you can bill the longer hours? Are you the only attorney or entrepreneur with this idea?

I mean, this has been a been a challenge for a long time. Um, have you talked to other people who have tried to solve this and um, have they run into problems with it? I mean, it seems like from a consumer perspective, it's such a thing that we want to be changed and to be fixed with technology, but it's, you know, it still hasn't cracked through or it hasn't seemed like it's cracked through. So what is Parallax doing differently that can help really break through the that business model of big law?

Stefan Candelmo: You know just to answer your first question yes there's others who are you know moving towards this and that's in some ways maybe slightly different but those ways are significant the innovation that's taking place in let's just we're going to call it legal tech. So whenever I call you know I refer to the innovation taking place in the legal market we call it legal tech. A lot of the companies are just building tools, tools for lawyers, right? Tools to for lawyers to be more efficient, to be more, you know, to be quicker and so forth.

The difference between Parallax and those tool providers is we have a very contrarian view of where this is all headed and that is it's not about tools, but actually, as I mentioned, it's an it's really transforming the way clients access and attorneys deliver these services. For us, it's about the attorney in that loop, right? Where it's not these pure AI solutions right now. Uh, and it's the really the attorney being able to oversee these systems for the outputs or deliverables that they're going to produce.

So, you ask the question as to why hasn't anyone been able to crack this? Well, my instincts tell me is that if you want to understand people's behaviors, you look at where the incentives are. And the incentives are based on the very deeply rooted hourly rate for most attorneys. I'm not talking about personal injury attorneys where they're paid on a contingency basis, right?

But those that are just doing the daytoday legal work. The premise is that you know you're going to pay me for my time and the more time that I spend on your matter the more I get paid. So there is this somewhat incentive to spend time. And when you have this technology which I think is only as a result of you know these large language models now where they're accelerating so fast in terms of their ability to write analyze capture and represent knowledge and think abstractly.

We now are in a place where the same cognitive workload can be done in less time. Less time equals less money. So you combine that with the inherent nature of lawyers, you said beautifully up front is that, you know, we are traditionally slow to adopt. We're conservative.

We're we've been trained to be risk averse. We are every day we are our job is to identify risks for our clients and to mitigate those risks. We carry that ethos into how we practice. And then you combine that with the monetary incentive of the hourly rate, you have this new technology coming on board that's going to possibly disrupt that.

I think that's where this, you know, this collision is going to be taking place. So the short answer is the incentives were not there for people to look look for these types of solutions and two the technology did not allow those solutions to exist in such a way that could overcome the inherent risks of looking to a machine for insight and analytics from a legal perspective.

Jay Combs: Yeah, that collision between risk and reward. I mean it's happening across every industry right now. You know larger corporations right like you said they can be risk averse like adopting new technology has benefits you want to get ahead of the competitors but at the same time you don't want you know reputational damage legal risk financial risk of adopting something too soon and it sounds great but it you know ultimately puts your business to serious risk.

Stefan Candelmo: Yes.

Jay Combs: So, with AI specifically around legal issues, and it sounds like you're focused on a lot of business and contract law, but maybe that's uh um only part of it. Um how when you're rolling out Parallax, you're offering a brand new technology with a hey, we can do things faster and scale up. You're kind of inverting the model of like, hey, we can do more, we can serve more people, scale up, provide the trust from the attorneys. Um, but I think the key to that is trust.

How are you really instilling trust into new users who might be hesitant to trust AI or might have seen AI gone wrong somewhere uh in the headlines? How are you, I guess, bridging that gap between trust and something brand new that can can change the industry?

Stefan Candelmo: A legal relationship is trust, right? A fiduciary relationship, confidentiality, security, so forth. Everything is about I mean, you boil it down, it's trust. Uh and that is why you know we ventured through this thought that it could never just be pure AI right like I when I first developed Parallax I was just you know my prior entrepreneurial journey included some startups and my last startup seems like over a decade ago was in the machine learning and AI space we didn't call it AI we actually call it neural networks and machine learning and we were doing some really interesting social listening analytics for companies, for political campaigns and so forth to understand what people were saying about them, whether they're saying things positively, negatively, automatically breaking and clustering things by topics and issues where I first did my first iteration where I just did a no code solution um often off the OpenAI API and I just curious would people use this for legal questions and actually they did, but where do you go from there?

How does it become actionable? How do you trust it? And that's where the essential element came to me and that is we have to build an attorney in the loop. You can't have trust with the machine for these types of services.

You know, it's one thing to trust your AI assistant to write you a blog post, right? The consequences are very small. you know, maybe it didn't convert, maybe you didn't get as much eyeballs or visitors on the page or whatever it may be. But when we're talking about legal issues that have real legal consequences, like a 90/10 solution just doesn't work.

So, an attorney has to be involved to at least one the one level above trust is peace of mind, right? You have to have peace of mind which then gets you trust. That additional element really I feel is my calling our calling card to mitigate that. Um, and the hallucinations because everything that's done on Parallax involves an attorney.

Whether it's drafting an agreement, whether it's reviewing an agreement, whether it's doing an advisory session, whether it's a new feature that we're going to be rolling out regarding verified answers, it all involves an attorney. Now, attorneys are fallible. Attorneys are not absolutely can guarantee that they're always absolutely right. But that's what's existing today.

and we're not but we at least have to meet the standard of what is today and therefore that's how we address trust now as to the users of Parallax as I mentioned the vast majority of them don't ever worked with an attorney something is better than nothing so we then incorporate AI you know to and then with the attorney in the process to give them that peace of mind and say yes instead of having to be charged $2,000 to get that peace of mind. How about 200? Oh, no brainer, right? Oh, you're not going to be charging me by the minute.

I'm going to know exactly how much I'm going to get charged upfront before I agree and it's fixed. I'm not going to get this I'm not going to get this bill a month later that's like, whoa, $3,133. What? Wait, who are these people who were working on this?

I didn't even know, you know. So, yeah. So, I think that's how we incorporate trust. We incorporate trust in terms of one, we're going to give you the peace of mind that, you know, there's an attorney in the loop.

Two, we're going to give you trust that, you know, what we say is our word, in terms of our price, in terms of our turnaround and so forth. And that builds trust, and thereby then that builds brand. So, that's the long-term vision of what we're trying to work on.

Jay Combs: Yeah, I love the model. It's an augmentation model. You've got all this history of best practices for contracts and business processes and different things that you can access and that's the perfect use case for machine learning and AI and then the trust from an attorney who can provide that advisory role. Um, with this model, how are like how are your attorneys relationships changed or how has your relationship changed with your customers?

Are you do you still have that like person-to-person relationship? Is it more transactional? And are there any kind of I guess pros and cons or trade-offs that are being made as you're introducing technology and how does that impact just your relationship with your clients?

Stefan Candelmo: I think we don't necessarily understand where that where that's going to end up, right? But I can just tell you from my own experience in terms of servicing, you know, clients on Parallax, uh, and that is there's still that relationship, but perhaps there's a little I'm going to be honest, there's a little bit of distance between us now, right? We're not getting on the phone, you know, we're really, you know, I'm not really diving into uh the initial issues with them. They're use using our AI agent to do the initial intake and do some initial thoughts, right?

I'm really somewhat on the back end overseeing things, but I'm always there, right, in terms of being able to message me on the platform and all of that. So perhaps there is this lessening of that one-on-one personal relationship where most of my career and most of the referrals that I've received, which predominantly is the dominant way that attorneys get their work is, "Oh, Stefan's my guy." I think that's going to change in terms of, "Oh, Parallax is my provider. give me a great It's almost we're productizing the relationship.

It's coming out of that traditional professional old-world maybe construct of saying, "Oh, you should talk to my lawyer." Yeah, my lawyer Stefan, he's great. I think that's possibly going to be impacted. But yeah, I also have to think that there's something that's going to step into its place to build that loyalty, you know?

Um, and you know, so you know, I think we're going to address it over time to see how what how much of that gap is, but as I mentioned, I think if I'm really looking at it in an honest manner, I think that's probably something at play there.

Jay Combs: And flipping it to just the customer side, like you said, there's a lot of folks who just aren't using legal services. They don't have the budget for it, the wherewithal. And so for them it's you know it's like it's a choice between nothing and this you know the product relationship or this new product. So it's it's really kind of uh um maybe it's not a shift for some people it's just it all upside for them at that point.

Stefan Candelmo: I think what we're seeing in the industry I can only speak within the scope of my practice right so business business law we are seeing a behavior change and that behavior change is I am often more often than not now getting agreements say hey can you review this agreement and usually the agreement would be somewhere someone from a third party sending it to my client who then sends it off to me but These are agreements that my client is drafting on ChatGPT and the same thing with reviewing an agreement. Hey, can you review this agreement? These are the issues that I've identified. And you could see the copy and paste and the font in the email.

You're like, oh, you are using an AI assistant here, right?

Jay Combs: Yeah. And so I'm all so the behavior already is whether whether we want to admit it or not the fire has left the cave you and the villagers have the access to fire now without the training right they have this powerful tool but they don't have the mindset or the years of experience with it to say because it's a high-risk situation like you said that there's low risk medium risk high risk low-risk stuff marketing as you were saying great put it out there's no damage done but like you said nine if it fails one out of 10 times you're in a lot of trouble. Exactly right. And I think that to me is the so Parallax is this almost a response to that what I think is this it's really just the seed of it but it's going to grow and grow and grow and grow where we're going to see that more and more often and my role in a way is going to automatically change where I'm becoming a verifier of these systems versus an actual deliverer of these products or originator of these products.

right? That a contract or an analysis. Let's just call it what it is. It's a product, right?

It's a product coming out of my mind, but now the product is coming out of, you know, some data center in Northern Virginia, right? So, you know, I am it's scary. I think you're turning a blind eye, you know. So, um anyway, so that's not sure if I answered your question.

No, you did. And it's it's an interesting time in the market because the technology is so available. It's evolving so rapidly and improving so quickly for all these great use cases. You have a I assume a comfortable uh legal practice before Parallax, right?

Like you have family obligations. You've been a successful entrepreneur already. Why do you continue to do this? Why lean into this new uh company, build this out when you could be, you know, living comfortably and kind of continuing uh I guess the traditions of uh of big law and kind of benefiting from that?

Why change the industry?

Stefan Candelmo: That's a great question. I can only I can only speak from my individual experience and my perspective of where I sit cuz um I'll tell you there has been days we are in the early stages early innings of Parallax and Parallax is clearly a if we're going to view it as an investment a high volume play right it makes sense when you're at volume uh but the beginnings you know working it through where I am giving away my value at such a cheap rate when I think about it right like e even if I let's just say that Parallax the average cost of a contract let's say is $400 let's say as an attorney I'm spending 20 minutes or 30 minutes to verify whatever that is works out to be about a $400 an hour rate that's you know that's pretty good uh that's a little bit above average. Um, but coming from my experience, um, and also my colleagues at big law firms, they're, you know, my experience, they're charging $1,200, $1,500 an hour. I'm at, you know, I do my bargain basement in terms of my experience and I'm charging $750 an hour and I'm doing this work.

I'm like, wow, why am I doing this? Like, I'm I'm actually I'm leaving money on the table, right? based off of my experience, based off of the value that the market has placed on me and my expertise. And it and it really comes down to a couple things.

One, this new way, you're either on the bandwagon or you're not. And if you're not, you're going to get left behind. And there is no better way to accelerate my knowledge and expertise and use of these systems and maybe in an extreme way than to actually build one myself. Right?

So that's number one. Number two, I've always been, you know, entrepreneurial with my ventures, my past event, my past ventures. I love supporting entrepreneurs in terms of trying to put their own dent in the universe. And there's a part of me that is certainly wants to do that.

Number three really is I've talked about this before and I think if everyone would do this own inner analysis they might reveal something to themselves and that is with Parallax I stepped into my own Venn diagram right these intersection of these three circles which just has allowed me to view it not necessarily as work but something that's that I really want to do and that is and those circles are you know my expertise in terms of as a business lawyer my passion for technology as to how I think it can improve things for people and companies and society and then three which was a later I guess observation is I have a very high value for fairness like anyone who knows me knows that when I'm negotiating, I'm not browbeating anyone down. That's just not my personality. That's not my approach. It's it's really I'm appealing to people's good nature and fairness of like, hey, this is just not fair.

It's not fair to be subject to this risk when it's a risk that's outside of my client's control. You're right. Like, it's tough to argue against that, right? So, and then the fairness element is it's just not fair that quality legal support is not generally available for those who are moving the needle, starting a new company, employing people, being somewhat the economic engine for our society in terms of small businesses and startups and innovation.

And some of them are just not getting the help that they need. And why? because of cost. Like I have clients and Parallax that work with big law firms and when they start telling me and they start using the word I'm afraid to talk to my lawyer because I'm going to get charged.

I'm afraid fearful. It's like going to the dentist. It's not right. It's not fair.

So I think that there needs to be a disruption a disruption as to how this democratization of legal support and I think across the board right everyone should get quality legal support when they need it and it should not be subject to or conditioned upon whether you can pay a $1,200 an hour lawyer. Right? So you combine all those three things. That's the third thing of like just why did I step into this?

Why did I say yeah I want to be a little uncomfortable and start a new company and I actually want to charge less than my actual value that somewhat other people are willing to pay. Yeah.

Jay Combs: The concept of fairness obviously extremely important in AI for variety of reasons but from the guests that I've had on this podcast it's a throughine that I've seen being able to you know apply technology to create more fairness. um share value. So, where did that come from in your I guess in your values? Like, was that something you were always concerned about as a child?

Is it something you learned in school or just seeing how business operated? Like, why is that a part of your value system?

Stefan Candelmo: Oo, that's a good question. I think that it's probably a part of me growing up. probably the lens that I looked at the world and then my general personality lent itself to you know a emphasis of fairness and maybe because you know I witnessed or experienced in my life um you know moments of unfairness you know our values are somewhat hardwired into us as a result of you know nature nurture what we have experienced in their life. Those values actually can somewhat maybe change and shift in terms of importance.

But I'd be curious as to why some of these the other folks that you mentioned have maybe similar stories or similar threads. I don't know. Um no one's ever asked me that question before, but I appreciate it. I think there is an element to, you know, that experience of growing up like whether it's um the immigrant experience, working-class experience, seeing it, how it affects your family, yourself, but I don't have the answer yet.

Jay Combs: And that's the reason I'm doing the podcast is trying to figure out how that drives decisions. Yeah. Um but on that topic so uh so there's the fairness component but then you studied uh I think political science in government at University of Maryland. How did you I guess get into technology?

Were you always into into programming? Was it something that came about as you know part of your legal career? You're like oh this is interesting. Is it's a tool maybe that allows you to democratize different services?

I'm curious how you got into that and went from lawyer or the legal world to the technology world.

Stefan Candelmo: Yeah, I went to University of Maryland, got a degree in political science. I thought I wanted to get into the world of politics. After I graduated, I um had some opportunities in Washington DC and I worked for some or a political organization as well as a congressman and I saw how the sausage was made which was just maybe that fairness value got picked up uh or got triggered and I was like yeah I don't really know if I want to be a part of this even though unfortunately maybe that cut me off from doing some additional good. So, you know, I always was very interested in business even in high school.

Like one of my favorite classes was uh my accounting class where we basically do a case study of opening and running a laundry, right? I thought I love that. I came of the age, you know, Star Wars, you know, 197677 Star Wars, um, video games. I still remember my first when my parents were able to scrap enough dollars and put away in their Christmas savings account to get me an Atari console.

You know, loved loved that. um just at that time there was Texas Instruments computer in the computer lab at my high school you know we're talking about the early 80s and you know doing some work in basic and being able to create a Pong game you remember the Pong game the movies at the time right projecting a future so there was always this interest in technology I just really just loved it um so business technology I said goodbye to politics and uh I went to law school and um after I graduated law school, I uh came to Washington DC and you know the first job I was working in a governmental agency but I was very interested in getting into a large national law firm which was going to be very difficult because I just went to a mid-tier law school in Akron Ohio. Um you know sometimes the running joke was you know what does uh a graduate from University of Akron uh say on their first day of the job. University Akron is a great school particularly in the IP space one of the highest uh passage rates for the Ohio bar which is fantastic.

So I came to Washington DC and a professor uh I was looking to network and a professor who I took a class in space law right science technology space law um introduced me to a partner big national law firm and I was able to meet with that partner and uh tell my story of how I was very interested in what he was doing and if I could be any part of it and He gave me a shot. Um, and I actually ended up working like 17-hour days, 20-hour days because I was working at my departmental my day job at the departmental agency. Then I was doing my LLM at Georgetown University Law School. So, I had the opportunity to do, you know, he was a space law business attorney.

Like, wow, that's is talk about future. Like, this is amazing. and he saw and envisioned everything that we're seeing now. He saw SpaceX.

He saw the privatization of space. And I, you know, I've never really said this publicly, but um I really have looked, I really have to thank him for giving me that opportunity, which then stepped into other opportunities at the firm and get into the traditional corporate law practice and all of that and really started to hone my chops. So technology, business, um, that's how I how I landed where I was and that was what, 29 years ago.

Jay Combs: So if you went to school on the coast or Michigan or somewhere out of Ohio, you never would have met that mentor or that advocate for you that's kind of put you on this path, which is Professor Art Doula.

Stefan Candelmo: He was a space law professor, international law, space law. And then he introduced me to, you know, a pretty renowned partner at the time in the Washington DC area. Um, and his name was Dr. Delbert Smith and I credit him for the opportunity to, you know, move forward and so forth and then, you know, advance my career from that.

But, you know, there's a few stories in between uh that to get me to this place.

Jay Combs: So yeah, and I imagine as a younger person going to law school, you probably weren't thinking about space law at that time, right? Like you're just trying to figure out your career like a lot of young folks of, hey, I can go to law school or I go to business school or medical school. And but it unlocks all these potential paths that you don't even know you would uh you would want. It's it's crazy to me.

Stefan Candelmo: You know, I come from a family of three boys. My oldest brother is an accountant, CPA. My second brother uh is a lawyer, but he was a prosecutor uh and former assistant US attorney with the Department of Justice and now he's a very successful um compliance lawyer for banks. He was a litigator and I was always somewhat following in his footsteps and I thought I was going to law school to be a litigator and to be able to stand up in front of a courtroom and argue my case and deliver the closing argument and so forth.

And I remember going and speaking to a professor of mine when I told him of my plans. He says, "Why are you going to do that?" I said, "Why?" He goes, "Stefan, don't take this the wrong way, but to be a litigator in some ways, you have to be an asshole."

And I don't see you as an And I go, "Yeah, you're probably right. I don't I don't see myself as an either. He goes, "You get paid to be an asshole." He goes, "Is that what you want to do?"

I said, "No, I certainly don't." I said, he goes, "Well, what are your other interests?" I said, "Well, I really I'm interested in business." He goes, "Oh, well, there's, you know, certainly, you know, a career can be made in corporate law and so forth."

And I was like, "Okay, that's great." So, he diverted me from, you know, trying to be in the courtroom. It's interesting. I don't think you have to be an to be a successful litigator.

I think that was whatever his construct was. But it was enough to just nudge to push me a little bit off that path to look at something else. Yeah. I think the term most attorneys would probably use is strong advocate or fierce advocate instead of Um but as Parallax and you are now I guess the advocates for your customers, small businesses, entrepreneurs.

Uh is there a common mistake or a damaging mistake that new entrepreneurs or new founders make and what do you wish they would ask sooner to avoid that very damaging mistake? The common mistake is a common theme in terms of giving away ownership. Now when I say ownership, ownership can come in two two forms in some ways. Ownership of the company and ownership of your ideas.

Having someone to do something, develop for develop something for you and you don't have the proper agreements in place and you find out that actually what you think you own, you don't own in terms of IP and copyright and the and the proprietary rights that to that potential invention. So that's one. And then it's the ownership of the company where you know you are issuing equity to people that maybe you're issuing too much or you're issuing in a way that you can't claw it back. Because if there's one thing that my business law professor taught on day one, he said uh it was a class on partnerships and he starts off the class two essential truths to this world, right?

And that is death and taxes. But I want to tell you a third one and the third one is that all partnerships that begin eventually end. And our job as a lawyer in terms of you know constructing those partnerships is to make sure that we address the ending because it will end you know whether it's through disputes whether it's through different visions whether it's through misconduct whether it's through death disability how do you actually address that truth it's like oh that's interesting so you know when you are given that truth then you're issuing equity to a new partner or whatever. You know, you have to make sure that you understand that maybe this won't work out.

often we're having so many people, I mean it's quite often where you know they start a company, it's the two of them, they think it's the two guys in the garage and the partner or co-founder you thought you had is not the one you really had and he or she just leaves or you need to have a separation and you just don't know how to do it and now there's no agreement in place. there's nothing that's there and now you have to subject yourself to negotiation and negotiation is to you know them ringing some you know pound of flesh from you to get back what you originally started or an adviser that you've given equity to and there's no accountability. So the fact that you don't have this these ownership constructs in place and you don't have them in writing is really a very common mistake and it can be fatal because you're interdisciplinary of the legal side and the business side.

Jay Combs: I think you have such a unique perspective on this. in having you know experienced this with my own family and stuff I think entrepreneurs by nature are optimistic and positive and want to see the best and want to see the change and as a result of that I don't want to call it naive but that trust that kind of that blinding trust or faith that this is going to work out you blind yourself to those that the partnership ending at some point and how it ends and I think that's where a lot of folks get in trouble. And it sounds like that's exactly ultimately like what your career has led up to solve for with the with the fairness and the realism of applying the legal world to technology and small business.

Stefan Candelmo: I think is just a little bit of a derivative of what you're talking about, which is actually true. I think the reason why most entrepreneurs don't seek legal advice is because the very nature of their confidence to say, "Oh, I got this right. I didn't need anyone to start this company. I didn't need anyone to land that first client.

I don't need this. I mean, and that trait propels them forward. That trait can put those blinders on, right? that reality distortion field because you have to have it.

You have to have this conviction that yeah, my decision's right like or I got to really trust my instincts on it.

Jay Combs: Yeah, you wouldn't take the risk if you thought otherwise.

Stefan Candelmo: Attorneys we were talking about from you know just circling back attorneys are risk averse, right? Entrepreneurs are risk tolerant almost to a level of they can absorb and tolerate a high level of risk and therefore they can say well if it doesn't turn out it doesn't turn out. It doesn't work out. It doesn't work out.

Well there are some things if they don't work out can have serious consequences. You know, it's one thing if it doesn't work out, like, yeah, that customer didn't work out, but another thing is like, yeah, the partnership where I actually gave 33% of my company to John Doe didn't work out. Yeah. Okay.

What are you going to do? You know, so I think that's to me is um some of the things that are at play there uh regarding the somewhat inherent qualities of a successful entrepreneur that can get in their way.

Jay Combs: Yeah, I think you could write a whole book on this topic and I hope you do because I'd love to get more of your your experience. You know, now that you've gone through all this, just, you know, you're launching Parallax and what advice would you give to yourself when you were your first-time entrepreneur coming out of law school, maybe to do something differently or something to be aware of? If there's one piece of advice that you could give to your your younger self, what would that be?

Stefan Candelmo: Life is short to be living on a deferred life plan. you know, if you have something, go for it. Uh, make sure that you have the proper resources, advisors, and so forth to be able to give yourself the best chance. And when you do go for it, just know that it may not work out.

And but you're still going to be okay. But this notion of persistence and growing and tacking, you know, is just part of the game, the game of your career, the game of life. Maybe not where you thought you would be, but to take that risk to step into that arena. If you read behind, right, the famous Theodore Roosevelt quote, you know, it's the man who steps in or the woman who steps in the arena.

I think that's a north star. You never should be afraid to step into the arena. No matter what it is, whether it's a, you know, taking on that big case as a lawyer or, you know, saying, "Yeah, I'm going I'll be the lead associate on that deal, on that transaction. I'm actually going to branch out, do something a little different."

You know, I think it's stepping into that arena and having the faith that, you know, even if it doesn't work out, you'll still be okay. But taking that step is a victory in of itself.

Jay Combs: All right. Well, I know we're kind of getting to time here, so I got one last question for you. You're based in Austin, Texas. What is better, Torchy's Tacos or Tacodeli?

Stefan Candelmo: Taco on Congress. There's a few outlets, but if you're into the different ways of what you can make a taco out of, that's the place. That's an amazing place. It's similar to Torchy's, but it's feels like a little bit of hole-in-the-wall place.

I'll tell you, here in Austin, some of the best best taco places are in these little food trucks and parking lots that you wouldn't even think of, you know, just fantastic, fantastic food. I say venture out of the brands and uh go to and try out some new food trucks cuz I think you'll be astounded as to the quality of the food and the authenticity of it.

Jay Combs: That's best advice I've I've heard all week. Well, thank you so much, Stefan. It's been great talking uh to you. Best of luck with and have a great day.

Stefan Candelmo: Thanks, man. Appreciate it. Thanks for the opportunity.

Jay Combs: Of course.