The Flavors of Utah Venture Capital

This past week I spoke with a friend in New York City who was fascinated with the impressive growth of Utah’s tech companies, but (like many) was unfamiliar with how the venture scene has helped shape them. Those of us with roots in Utah tech are proud of what’s happening and can point to a time when things were different. You know: “Why, when I was raising money back in the early 2000s…” My friend is not unfamiliar with Utah or its people, so he understands some of the generally accepted reasons Utah is gaining momentum. The questions he posited to me were, “Who is funding these companies? What’s the venture scene in the state?” Similar questions hit me nearly four years ago, a few years before I ultimately made a career shift from full-time operator to VC. I remember a phone call I made from a Sheraton hotel room in the Winter of 2011. My startup had exited just months prior and this was a visit to our new HQ to get to know members of the new [larger] team. I called a long-time friend, and now my partner at Peak Ventures, to shoot the breeze. His business was growing well and he had started angel investing in the state. I was jealous- for many tech founders, the notion of backing the next generation of builders is 2nd only to the excitement that comes from building yourself. And, Jeff and I had a commonly-held belief that investing in the state was still in its infancy. Neither of us had found a perfect investor fit in-state. He had bootstrapped...

The Single Truth in Startups

A decade ago I embarked on the daily grind of the startup.  My company, Zinch (since acquired by Chegg— NYSE: CHGG), was hell-bent to change the way universities connected with high school students.  We aimed to bring ease and simplicity to a market filled with ignorance and complexity.  With visions of the impact we could have on millions of people who could discover the best university for their interests and potential, my co-founders and I sought advice and capital from the supporting system that prevailed in that day.  How different the startup world was back then!  Do you remember business plans (oh, the pain!)?  And how many hoops you had to jump through to raise capital?   Accelerators weren’t yet widespread  (Y Combinator debuted in ’05, Techstars in ’06, and in our state local accelerator BoomStartup didn’t start until 2010), venture capital under management was half of what it is today ($28B invested in 2006 vs. $65B in 2014), and the advice given to us seemed so formulaic (“Write a business plan, go win a competition, give away the majority of your company to us, follow only known pathways, and let us govern your operations from our perch on high!”).  Said another way, the journey of a startup was more arduous, less informed, and had both fewer mentors and capital support.  But at the time, it was hard to have this perspective, because being an entrepreneur, leaning forward, being face-down in the grind…I believed that the people in the know knew truth–that the formula for success would work–and who was I (young & inexperienced) to believe otherwise? Now fast forward...

A Powerful Lesson for Fathers-to-Be in a Startup

Last Friday at 3 am, baby Evie was born strong and healthy to the delight of her parents. Her father is a founder of one of Peak Ventures’ portfolio companies. Her mother is now a Mom of both baby and startup. The parallels between birthing a baby and a startup are rich and have been explored by many writers before. They are momentous times filled with excitement and dreams and trepidation! But I’m going to skip the usual metaphors in order to share with you a more personal and meaningful story. You see, the most critical role for me is also the one that ironically receives the least attention. It’s the mother! As a father of eight (four children and four startups), I had hoped that the lessons learned from one child to the next would be retained and improved upon, and ultimately lead me to a state of Leave It to Beaver-like parenting perfection. In reality, however, each child is unique, as are the challenges they bring. Responsibilities compound and distract, and frequently lead me to feeling unsettled and overwhelmed. You fellow entrepreneurs out there who have felt the low moments when your business and/or your marriages are reaching the breaking point know what I mean. These are hard times filled with tears and anxiety and confusion! Fortunately for me, I had mentors along the way who brought needed perspective through timely and spot-on advice when I needed it the most, and helped me to take care of the most important person for both my startup and growing company. Here’s a reflection on a few of those mentors,...

Never Make These 4 Startup Mistakes

In September of 2011, alone in Copenhagen after a full day at an industry conference, I sat in my hotel room on the phone with my good friend Anne Dwane. She was the CEO of our company, Zinch. For weeks we had debated whether to sign a term sheet for a series C venture financing or to sell the company, and this call was the news that our decision to sell was complete. Anne delivered it in her own style: factual, brief, and with a simple congratulations. It was all the call needed. I hung up the phone, paused for a minute, and then burst into tears. I didn’t know why I cried, but it was probably something between joy and cathartic relief. In those moments I experienced an overarching reflection on the 5 years of struggle to launch and build Zinch, the highs and the lows, the triumphs and the abject failures. As I looked in the mirror, so to speak, on my life, and who I had become, I realized that somewhere amid all of the good decisions, my bad decisions and mistakes had profound impact on me and my team. I want to share four of these mistakes with you, and I’m going to try to avoid the tactic of thinly veiling one’s strengths as weakness (you know what I’m talking about: the interview in which you’re asked about your weakness and out comes “I’m impatient for great results” or “I’m hard on my team and sometimes push too much towards success”).   No self-complimenting here. This will be raw Sid, mistakes exposed in all their ugly...

Improve Our Tech “Ecosystem” By Eliminating It From Our Rhetoric

I live in Utah, a state where 90% of what you find in the growing tech scene is fabulous: a strong pool of talent, willingness to delay gratification, and founding teams that think big. And my friends who’ve come from other states/countries and who’ve decided to lay roots here agree—we’ve got a lot going. Period. But not end of story. For us, there’s room to improve if measurable startup outcomes (or at least progress) are a priority. The principle of focusing on outcomes vs. activities was shared with me early in my startup by an investor and now friend & mentor, Chris Michel. Applying this within your startup is critical and, I’ve found, applying the same principles with external parties to your startup is just as critical. This world consisting of startups and the numerous (and growing) interested-in-startups parties is often referred to as the “ecosystem.” Looking back, I don’t think I ever used this term during my time as an entrepreneur. I only started noticing it when I moved to the investor side of the table. Now, ask any Utah investor or local talking head on our startup scene and they’ll inevitably use the word ecosystem. At first I played along, as it sounded nice, evoked images of squirrels and muskrats and plankton, and seemed to denote that we were all for one and one for all.   But then I noticed that many who spoke of the ecosystem seemed to be focused on that, sometimes, instead of building a successful service/product. For someone providing a service to entrepreneurs, that’s just fine. And it makes sense—build your network, work the...
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