Act Like You’ve Been There Before…

Recently, I saw someone share a tweet from a young, aspiring VC who posed a GIF on Twitter depicting an irreverent character in an effort to share his frustration that investors aren’t keen to invest in first time managers. My first reaction was to chuckle as it was indeed pretty funny. My second reaction was to think, “kid, you don’t get it yet and you probably need a mentor.” 

There are two short takeaways for entrepreneurs from this. First, that young VC was partially right;  LPs don’t invest in first time managers, that is until until they do (they just don’t do it very often). There’s been thousands of venture firms created over the last fifty years and I’ll bet there’s been a hundred started in the last two years. Somebody’s gotta be funding those first time managers, right? Create a compelling enough opportunity and someone’s going to invest. 

The second takeaway is very simple.  Every single LP I know tracks new and emerging managers on social media. What do you think happened to this young VC’s stock when they saw that post? Think they said to themselves “hmm, here’s someone I want to track?” Nope, me either. I’m sure some LPs probably stopped following him then and there. Always remember that all investors (angels, VCs & LPs) use social media to try and get a better feel for people they’re interested in potentially investing in and if you don’t think they’re they’re paying attention to what you’re posting in your various streams, you’re not just naive, you’re dumb. 

Founders, rest assured that investors are paying attention to your social behavior. Don’t put anything out there that you wouldn’t feel comfortable saying to them in a meeting. Social media represents an incredible tool to allow people to get to know you better. Use it wisely. One of the top LPs in the country recently told me that he seeks to invest in people “who are better versions of himself.” Investors want to invest in others that they trust and believe will be good stewards of their money. As the immortal Vince Lombardi one said, “When you get in the end zone, act like you’ve been there before.”

Posted in Fundraising, Startups | Leave a comment

Who Benefits From Your Success?

Since I started mentoring at Techstars back in 2007, I’ve sat and talked with hundreds of founders trying to raise seed rounds and I’m often left scratching my head at the lack of strategic thought that goes into figuring out who to pitch. Most founders defer to attacking a list of known investors with little or no thought given as to what motivates those investors, what excites them and what sectors they understand. They wind up competing with every other startup in their community trying to raise capital at the same time. I learned a long time ago that trying to raise capital from people who A) understand the industry you’re trying to disrupt, B) benefit at some level from your success or C) at least have some emotional connection to you is far easier than pitching investor after investor that you first have to educate about your market and somehow must create some trust and common ground in a compressed time period.

I started learning these lessons when I became a stockbroker in the early 90s. After a month or two of training at company headquarters on Wall Street, us rookies were expected to hit the phones and start “cold calling” 10 to 12 hours a day, every day, to get meetings with strangers and convince them to let us manage their money. It didn’t take me long to figure out that I needed something to differentiate myself or this was going to be a short-lived career (which it actually was as I moved into venture investing in 1995 but I digress). I was living in Boston and decided to buy the heavy bound books from my university and my fraternity consisting of the names, addresses and phone numbers of every alumni, sorted by state. I sat down with a highlighter and highlighted every single name of an alumni within a hundred mile radius of Boston. I developed my own script leaning heavily on that one sliver of a connection and lo and behold, my appointments grew by orders of magnitude. Then, when I sat down face-to-face with them, I spent as much time as I needed to build a connection revolving around our school or our fraternity. It was only after I felt that connection did I allow myself to start talking about stocks, bonds, and wealth management. You would be floored at how many successful people began giving this kid a chance to begin managing a portion or all of their wealth because I created an emotional connection with them.

Let’s get back to fundraising. First, who should you pitch? When I started raising capital in 2000 for our first fund ($25 million) at Highway 12 Ventures, I began with the usual institutional suspects. It only took me a few meetings to figure out that we were not what they were looking for and I quickly shifted gears based upon the lessons I learned above. I had just moved to Idaho and as you might imagine, there weren’t many alumni from my east coast roots living there. So much for that strategy. I switched gears and thought, “who would benefit from Highway 12 Ventures’ success?” I started meeting with people from local institutions and business owners who would benefit from having a more vibrant startup community, and painted a picture of how beneficial our success would be for them. Once again, a dramatic increase in the quality and the success of the meetings.

These lessons are easily applied to raising money for your startup. Selling software to make doctor’s lives easier or create greater efficiencies in hospitals? Pitch doctors, not people who made their money in real estate. Is it easy to get meetings with doctors? Probably not. But I’d sure as shit figure it out if I was in that position. Got the next great solution for enterprise HR? I assure you, there’s hundreds if not thousands of senior HR execs who could write a check for $50k. Easy to find them? Nope. But I promise you that with some effort, you can. It’s never been easier to have a conversation with somebody that you’d like to. Tools like LinkedIn, Conspire and hi def video didn’t exist when I was raising money earlier in my career. With a little bit of creative thought and a good deal of effort, any founder can talk to many potential investors who understand the problem you’re trying to solve with your startup and/or would benefit from its success. You’ll be amazed at the difference in the tenor of your meetings. Founders put such Herculean efforts into building remarkable and unique products yet so many of them attack fundraising with little or no strategy. If your startup is genuinely solving an important problem, I promise you that there are many people out there willing to invest in that problem being solved. Start thinking creatively about how to find those folks and get in front of them.

Lastly (and in my opinion and most importantly), There are many so many perceived reasons why people invest in startups, but it really comes down to one thing. Emotions. Even folks like Brad Feld and Fred Wilson only invest when they find a quality in a founder that touches them deeply. Something personally meaningful. In order for your story to resonate with someone, you have to touch their heart before their head. If there’s one thing to remember when sitting down with a potential investor for the first time it’s these words from Maya Angelou – “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” After 20+ years of raising capital and helping people raise money for their startups, I still believe this is the single most important ingredient to successful fundraising. In fact, it’s so integral to that it deserves its own post. Stay tuned…

 

 

 

 

 

 

 

Posted in Fundraising, Startups | 1 Comment

Taking The Plug Out Of “Unplugged”

Over the years, my wife Pam and I have developed a great system together: I plan our vacations, and she plans everything else. There’s no ambiguity. When we’re at home, I do what I’m told, go where she tells me and try my best to keep up with her. I love planning our vacations though, and the more “off the beaten path” the better. I spent the first 30 years of my life living in and around big cities. When I met Pam and started spending time in Idaho with her, it sparked the embers of a love affair with the outdoors that’s continued to burn brighter for over 20 years now. In large part, Outside magazine became fodder for my wanderlust. I’ve torn and stored pages, bookmarked links and spent a good deal of time daydreaming about remote places that I want to experience with my family. Lucky for me, Pam’s been up for it from day one.

 

The highlight for us (so far) is when I took a three month sabbatical five years ago and we spent three memorable summer months traveling by backpack throughout Southeast Asia and Africa. For a long time now high on my list has been trekking in Patagonia. We waited until the kids were old enough (15 & 17) to handle the long and arduous days with heavy packs, and last year I began planning our adventure in Chile & Argentina for Christmas 2015. We talked about it all year and the anticipation grew. Alas, two weeks before we were set to depart, our daughter Sophie threw out her back riding and was clearly in no shape for a trip like this. After some hard family discussions about canceling, we decided that our son Cameron and I would go and that Pam would stay home to care for Sophie (Happy to report that she’s on the mend and riding her horse again). The trip was so spectacular that we’re planning on doing it again as a family.

One of the things I cherished most about our time in Patagonia was that for almost the entire duration of the trip, we couldn’t be plugged in, even if we wanted. No Wi-Fi. No Internet. No digital connection to the outside world at all. Occasionally we would pass through a small town like El Calafte or El Chaten where we could find a signal strong enough to drop Pam and Sophie a voice text to share a tidbit about our latest adventures and let them know we were ok. We weren’t “off the grid” figuratively, it was literal.

We all talk about taking breaks and “unplugging.” Unfortunately, it’s becoming almost impossible these days for people to truly unplug. We take our phones on our unplugged vacations, sneaking and checking Instagram, Facebook, the news, or whatever our favorite flavor of digital distraction might be whenever we need a fix. As someone who does a fairly good job disconnecting on a regular basis, it was still a jolt to spend almost 3 weeks completely unaware of anything happening in the world that I couldn’t see with my own eyes.

What was that like? Pure bliss. Cam and I had long meandering conversations while we hiked, which twisted and turned like the rivers we were following. We talked about everything under the sun. Before the trip we each picked a book (Cam chose Fearless and me, Zen And The Art Of Motorcycle Maintenance) and brought two copies of each and talked about those as we read them together. Obviously, we hiked and we hiked and we hiked. We averaged between 12 and 18 miles a day and 3000 to 5000 feet of climbing. Sometimes we’d talk. Sometimes we’d have long stretches of silence, hearing nothing but the wind and lost in our own thoughts. And sometimes we’d sing. Actually, we sang a lot. In fact, we spent an entire morning hiking to Mount Fitzroy singing and trying to remember all of the lyrics to the Beatles When I’m 64. “When I get older, losing my hair, many years from now…”

In Torres Del Paine, we enjoyed a new friendship with Omar, our guide. Born and raised in Porto Natales, Chile – his father was an accomplished mountain climber and instilled a love of the mountains in his son. Omar went to university, but after a few years of a 9 to 5 job, he quit to become a guide so he could spend all his time in the mountains. He’s climbed many of the most challenging peaks in the region and regaled us with tales of those exploits, some of them quite harrowing. Despite guiding in the area for 15 years, Omar made us feel like every step was special. He took great pride in explaining all of the geological history of the region, had a vast understanding of the fauna and wildlife and loved pointing out all of the birds by their individual songs. Most of all, Omar kept us on pace. We’d start hiking between eight and nine in the morning, and if we didn’t make camp by nine, there was no dinner. We’d snack along the way and savor every calorie in our bagged lunches. Nothing went to waste.

The scenery was simply breathtaking. I hope you watch all or some of the video because there’s no way to really describe how truly beautiful and inspiring the region is and do it any justice. In fact, the hardest part of describing Patagonia is simply conveying the scale. We live in the mountains of Idaho and have visited so many vast places. I’ve never visited the Himalayas (for now) but I’ve never felt as small as I did there. Patagonia is also home to some of the most accessible glaciers in the world and it seemed like we saw a new one every time we made it around another mountain. Trekking across the Perito Moreno Glacier in Santa Cruz, Argentina was an experience I’ll always remember. We crossed the bluest rivers and streams I’ve ever seen and saw glacial lakes as turquoise as the Caribbean. I’ve never seen a full-blown avalanche in person, but when we were in the French Valley, we saw saw five in one day, and we even captured one on film (you’ll have to watch the video). We saw condors with 12 foot wingspans and we ate the most mouth watering lamb I’ve ever tasted.

In Torres Del Paine, we slept in refugios (wooden huts with three or four small bunk beds in a room) with different people from all over the world. It was fun to see a few familiar faces on the trails and also to share meals with new people at the wooden picnic tables each morning and evening. We also stayed at a few “estancias” (sheep and cattle ranches) that had been handed down from generation to generation for over 100 years. The family’s hospitality was always special and the food spectacular.

Of course, Patagonia is a photographer’s dream and I hope the pictures in this video inspire you to go visit. A big thanks to our friends Peter and Pam Horan for giving us such great advice in planning our trip and the biggest thanks in the world to my assistant Denise for helping us put it altogether. Now go watch the video (in full screen mode!), turn up the volume and get lost in Patagonia with us.

Oh, and get comfortable, it’s long :)

 

 

Posted in Life | 5 Comments

Why We Invested In Wevorce

Four years ago Michelle Crosby sat down in my office and told me about her plan to completely disrupt the divorce industry. Her story was fascinating: A child who watched her parents go through a brutal divorce becomes a divorce lawyer and winds up going through a divorce herself. She certainly checked the box for domain expertise, didn’t she? The most compelling part of Michelle’s story for me though was the fact that when the law firm she was working for offered her a position as partner, she had an existential crisis and decided to resign instead and that’s when she set out on her mission.

I’ve always been drawn to mission driven entrepreneurs. Folks who lay awake night after night grinding away on how to solve a particular problem. It consumes them and they’re driven by something far greater than money or recognition. Michelle fit the bill to a T. She had grown so disillusioned with an industry extracting obscene amounts of money from people going through a great deal of pain with no other options, that she turned down the brass ring she had been working so hard to earn and set out with not much more than a burning desire to reinvent the very broken process of divorce.

Michelle and her team have built an elegant and easy to use platform designed specifically to keep lawyers from running up bills by playing the middleman and escalating drama instead of avoiding it. Even more importantly, the entire Wevorce experience focuses on the well-being of the children who almost always suffer the most during the divorce process, and it works. Over 98% of the hundreds of Wevorce customers have avoided court and the company’s customer satisfaction metrics are through the roof.

I stayed close with Michelle during the last four years and have enjoyed watching her grow into the amazing entrepreneur she’s become. We participated in the seed capital rounds and when Michelle told me that she was ready to raise her Series A, I didn’t waste any time in getting my partners to spend some time with her. They came away as enthusiastic as I’d hoped they would and we couldn’t be more excited to become the lead investor in such an important company.

Equally gratifying for me is the fact that Wevorce is based here in my hometown of Boise. I’ve been passionate about our startup community for a long time now and I’m thrilled to be joining the board of directors and help Wevorce reach its full potential and become one of Boise’s iconic companies. Michelle has been able to recruit some fantastic talent here and it’s yet another sign that Boise’s rising!

 

Posted in Boise, Startups, TechStars, Techstars Ventures, Venture Capital | Tagged | Leave a comment