My Journey from Entrepreneur to VC: a Different Kind of High

My Journey from Entrepreneur to VC: a Different Kind of High

Checking my phone as I boarded a long international flight back to the US, I noticed a flurry of LinkedIn notifications congratulating me on my 2-year anniversary at Peak Ventures.   A rush of emotions hit me when I saw those notifications as I reflected on this path in venture capital, my transition from entrepreneur to investor, and what I’ve learned in these few years. Transition As an entrepreneur, I assumed that venture capital, though different, would have some of the same highs—and maybe even more of them on account of being involved with many companies instead of just one.  But although it’s been exhilarating in its own right, venture investing is a different high—more moderate.  As an entrepreneur, you experience higher highs and lower lows.  Everything rides on your business’s success– financially, emotionally and otherwise.  When things look bleak, desperation swoops down to grasp you in its painful claws.  And so too, when execution and opportunity align, exhilaration lifts you up to the thrill of the highest of highs. Venture capital is more like second-hand smoke.  Don’t get me wrong, I get buzzed with excitement every day in my line of work from the challenge-driven passions of the entrepreneurs we back (and in many ways I appreciate that I’m not a user of the entrepreneurial drug anymore)—but I’ve had to reset my own expectations of how I define success and feel joy.  It’s like transitioning from being the athlete on the court to coaching my 8 year-old’s team.  Hey now, don’t misunderstand and think that I’m calling any founders children… it’s just that I’ve experienced withdrawals from missing the... read more
Interesting Trends in Angel Investing

Interesting Trends in Angel Investing

“Tell me about your cap table?” I asked the Founder of an early stage startup. He was clearly passionate about his business, and had assembled a top-notch team to help him achieve his ambitious vision. But the grit and determination that had helped him overcome the challenges of his current and former startups seemed to falter a bit as he considered his response. He had a dirty cap table and he knew it. With some reservation he said, “Our initial angel investors own 60% of the company. I have 35%, and the rest is split up between the team.” He then went on to explain that their aggressive valuation was based on the growth since the last round of angel investment, in which the above-market revenue multiple the angels had chosen set the precedent. I soon found out that this team had struggled to raise money from the other venture capital firms with which we like to syndicate—because they, too, were dissuaded from the conditions that the angel investors had created: small runway, fragmented cap table, high valuation and little strategic support. He described with some frustration how he felt stuck, and that his ‘angels’ no longer fit the heavenly metaphor, but rather the situation felt more like hell. Compare and contrast this situation with a scenario that has become familiar because of it’s frequency within our portfolio of Peak Ventures-backed companies, in which an angel investor known to our team (and often an LP in our fund) introduces us to the founders of a company that he or she has backed (usually at an appropriate valuation for the... read more
Inside the Mindset of Top Young Talent

Inside the Mindset of Top Young Talent

Hiring veteran executives to fill out your C-suite is a luxury most startups will never enjoy.  Hiring young, untapped or junior talent, however, is a challenge that all startups face.  Moreover, growing green talent capacity into C-suite capability layers on yet another set of difficulties to the already strenuous life of a startup.   Navigating this is less science, more art. Some founders rely on being highly extroverted, others in having established credibility within specific industries or groups, and some—to some extent all of us–just power through conversations and interviews in bringing together that band of people who will man the boat and struggle to make it out of the tides and into deeper water. When we do stumble onto the winners in our teams, those people who seem to magically tackle anything thrown at them, retaining them is critical.  Losing them?  Unacceptable. Several years ago, while driving back to Utah from a team off-site, one of my colleagues, Caleb, shifted uncomfortably in his chair, and in a strained tone let me know that he had accepted a position at another company.  He was a natural star, a fast learner, and someone who lifted the energy of our team, so I was shocked!  I stumbled through a discussion over why he left and ultimately wished him well in the transition.  I think he was the first direct report that I had regrettably lost, so I didn’t feel entirely prepared for the difficult discussion, but fortunately for the both of us we parted ways on a good note, and our friendship remained intact. Fast forward a few years.  A group of... read more
Entrepreneurship a Long Slog?

Entrepreneurship a Long Slog?

I recently ran one of those races that peppers obstacles and fear-inducing challenges throughout the course. One of those was the Muddy Mile, a long slog through waist-deep mud. The pit was wide enough for several people abreast, which gave cause for some funny moments. While most of us runners kept to the highest ground possible—which meant that we formed into a slowly moving line that snaked its way through the muck, a few brave and impatient souls tried to skip the line by running along side us through the untested mud. Without fail every one of these hit a deep pocket and promptly vanished from view as the sludge completely engulfed them. But those of us who stayed with the impromptu team could see from the people ahead how deep the mud was at those spots, and thus chart a good course. Reflecting on this muddy run experience caused me to think about the doom and gloom that has been in recent media outlets. It seems that the press increasingly views entrepreneurship and business creation as a long slog through icky mud with unexpected pits. Spectacular drops in stock prices like LinkedIn and Tableau caused reverberations across high tech, and SaaS valuations in general have now dropped 57%. The word “unicorn” now has a mixed reputation. And the fund raising environment seems to be tougher. So shouldn’t an entrepreneur expect a long slog right now, a seemingly hopeless journey of bootstrapping and organic growth? A Muddy Mile with hidden pits that will swallow them whole? No. This is the best time to start a business and get into... read more
The Beautiful Madness of March & Majerus

The Beautiful Madness of March & Majerus

March Madness is on!  Such a great time to enjoy college hoops, the powerhouse schools and the Cinderella underdogs.  I was reminded recently that few experiences prepared me more for startup life than my time 18 years ago as a college basketball walk-on and before the 1998 NCAA tournament. Last month I was in Phoenix, Arizona, for a board meeting.  The night before, at an evening EdTech meet-up hosted by CampusLogic, from the corner of my eye I caught what appeared to be an old teammate from my days playing basketball at the University of Utah.  “Tony? Nah,” I thought, but naturally I had to find out.  Sure enough, it was, in fact, an old acquaintance and talented teammate from more than a decade and a half earlier. We chatted for a few hours that evening and I was drawn back to stories and memories from my time around a legendary coach and remarkable team.  With March Madness descending upon thousands of us basketball junkies, here’s a reflection back to one of the many lessons learned on the court. Being a walk-on athlete coached by Rick Majerus left no room for a half-hearted effort.  And the result was special…   Basketball walk-ons, by design, have to fight for their place.  During tryouts it was an all-out battle to scrap for the ball, defend relentlessly, and hopefully sink a few buckets.  For me they also turned out to be a good excuse to remove the studs in my newly pierced ears (yes, my hallmarks of the 90s and college freshmanhood).  It’s a long-shot, maybe a crapshoot, to make the team... read more
Aim High and Ride a Giant

Aim High and Ride a Giant

“If I have seen further it is by standing on the shoulders of giants.” – Sir Isaac Newton Recently visualcapitalist.com published a chart showing the 12 apps that have more than a billion monthly active users. The authors point out that these apps are clustered into three companies, that timelines are shrinking, and that mobile is driving rapid adoption. Cool! But what does this mean for all the rest of us? I think it means to aim high and ride a giant. Aim high means lift your sights. We entrepreneurs (and investors in such) of the world believe that wildly optimistic and seemingly impossible things can be achieved. Sometimes the only evidence we need to launch a dream is the knowledge that someone else has done it, too. So if you are developing an app, my question to you is ‘What is your goal?’ Specifically, how many concurrent users will you have? How about a billion. Is this unreasonable? 12 other companies have achieved it, so why can’t you? Sure, reality is hard, and we are more likely to be disappointed then successful—but if you aim for the moon, you’re likely to hit the mountain top; aim for the mountain top and you’re likely to hit the trees; aim for the trees and you’ll probably fall on your face. You’ll probably never hit the mountain top unless you aim at the moon, so aim high. Ride a giant means to make a gargantuan and growing business a winner because of what you do—and then let them carry you forward into the market. Look at the chart and notice that... read more

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... read more
Backing a Great Entrepreneur / Person … and Helping His Shark Tank Dreams Happen

Backing a Great Entrepreneur / Person … and Helping His Shark Tank Dreams Happen

I’m not a hater. I always try to look on the bright side. Hands down, I’m an optimist. It’s hard to be an entrepreneur if you are not. Cynicism may be a way of life for some, even a sport for others in this always highly connected but too often low touch world. But, in my opinion there is nothing noble about being cynical. Anyone can do it, it doesn’t take much effort and in my experience it rarely leads to victory. Therefore I am an entrepreneur and venture capitalist that likes ABC’s hit reality show Shark Tank. Because I try to look for the good in it, not the bad. Shark tank can help to promote positive aspirations in people while educating a little, around the edges. However, is Shark Tank indicative of life as an entrepreneur? Not really. Is it reality? NO! No five minute snippet on TV can even begin to tell a tiny part of the multiple year saga that starting most companies entails. Is it reality TV? Yes! Is it story-telling with slivers of truth in order to make money and sell a product? Yes and Yes! Indulge me a little… It is a bit ironic and then in another way, totally not, that the sharks are being entrepreneurs themselves and filling a market with robust demand by promoting an even less than half-baked view of what entrepreneurship really is through the show. I trust that they know this themselves, through their own experiences as successful entrepreneurs. And speaking firsthand… I enjoyed my 10 minute plus conversation with Marc Cuban, that got whittled down... read more

Advantages of Being an Underdog: The Top 3 Qualities I Look for in an Entrepreneur

One thing that really gets me fired up is feeling like I’m an underdog.  I’ve felt this way most of my life, actually, regardless of the successes that may have come.  I need challenge.  I enjoy the fight.  Without a battle the wind goes out of my sails, and so sometimes I even create tension just to experience that positive conflict that helps my passions rise.  Reflecting on why being the underdog is so important to me, I’ve found that there are three fundamental qualities that an underdog develops in the quest for victory:  the will to win, the ability to lead and rally a team, and big vision.  These qualities have been essential to me on my own journey of entrepreneurship.  And therefore are the qualities I look for when investing.  Let me share with you what each of them means to me.  First, though, a bit of context. This is me as a high school basketball player.  At 5’8″ and 165 lbs. I felt like an underdog in every game.  This is Scott Pollard, 6’11” and 278 lbs., who you see here blocking Shaq (Scott is that big).  I played against Scott in high school, and remember one particularly painful moment when he dunked all over me.  As he landed, pounded his chest, and screamed in victory to the crowd, I remember feeling small and insignificant.  Nothing that I could have done would have blocked that dunk.  Sometimes you aren’t built to win, or at least it appears that way.  But if you are an underdog you have to find a way.  You’ve got to hustle and... read more

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... read more
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Welcome to the Peak Ventures blog.

Through our blog, we aim to give you an idea of what we're thinking about, what our companies are up to, and the issues we face in the industry. We hope you'll join the conversation!