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Joe Colopy: From No Paycheck for 3 Years to a $200M Exit

Joe: So I was getting kind of pretty demoralized as you can imagine, also my wife and I were gonna have a baby in six months. I always believe that when things got really tough that I would figure something out and like, I need to figure something out right now. 

Trevor:  Today’s guest is Joe Colopy, serial tech entrepreneur and investor. Joe is the co-founder of Jurassic Capital, a new venture capital fund which invests in tech companies with one to five million in yearly revenue. He’s the publisher of Grepbeat,  a digital publication that covers all things tech in the Triangle area of North Carolina. If you’re not a subscriber, I highly recommend it.  And he’s also the co-founder of Bronto, which he started back in 2002 along with co-founder Chaz Felix, and ended up selling to Netsuite for $200M in 2016.  You heard that right, two-hundred million dollars.

Joe got his career started off in 1999 working at Red Hat, which was a startup with 100 employees at the time. A year later, they had over 700 employees and had gone public. It was then that Joe realized he could climb the corporate ladder, but he chose to take his life down a riskier path. 

Joe:So there are two parts there's confidence, and there's also just the realities of paying a mortgage or rent as well. And so one, I did make a little bit of money from the Red Hat, IPO.

Okay. Not tons, but enough when you're in your twenties to feel like I'm gonna have my mortgage paid off for a little while. So that was really critical.  the second thing is. My wife is a very understanding person and she was working and she had a mid-level job and we had decided, and we had structure our life to be able to live on her salary and we were able to do that. So God forbid, if nothing came out of it after a year or two. I felt I could go back and get a job and we wouldn't be on the streets.

Trevor:  Joe never had to go back to get a job working for someone else, and part of that was because he and his wife knew how to live conservatively. Before Red Hat, they were in the Peace Corps together in the Seychilles (SAY-shelz) and learned that they didn’t need much. In fact, it would be quite a while before Joe would take his first paycheck from Bronto… 

Joe: I think startups, especially as they grow, are a reflection of the personality of the founders.  and Chaz Felix, who's the co-founder of Bronto very much espouses those values as well.

And so we're cheap, right. And we wanted to be very capital efficient because it gave us a lot independence and control in terms of how we manage and grow the business. And so after I left Red Hat, I didn't receive another paycheck for three years. And that was from Bronto. And for Chaz, I was probably a year and a half by the time he got involved.

And so that's a long time and the reality is we could have paid ourself earlier, something. But when you're, when you know that if you put a dollar in a business, it generates three. In a good way, you're kind of reluctant to spend the dollar and salary, cause I rather have three.

Right? And then you do that again and again, and it starts being some big numbers. And so we are pretty disciplined about, voiding taking money for as long as possible until it just became a little silly, right, not to, and we wanted to establish a discipline of paint ourselves, some salary, but we always, I think we started off, we paint ourselves, and we actually put ourselves on the payrolls $20,000 a year, and then every once in a while, Chaz and I we're like, hey, let's bump that. 

And we bump it to 30. And I think we did that until we are several hundred thousand dollars a year. And this is on top of the ownership. Right, right. When we got to be a very big company, but we are still always below market in terms of our roles.

And often I remember, I didn't really remember how much we would get paid to ask Chaz, like how much are we getting paid these days? because even though we were making more money, my wife and I were still leaning mean in terms of how we live our lives. And so, we didn't actually live to that income. And even today, right, we have the financial means to do a lot of things, but that doesn't necessarily correlate in terms of how we live our lives. 

Trevor: That again, a lot of interesting things to unpack there, but I wanted to kind of step back and ask you, do you remember some of the ideas that didn't pan out? 

Joe: Well, most of my ideas don't pan out. Okay. So I would say two thirds of my ideas don't pan out, but I, I try to kill them early without too much fanfare. So prior to Bronto, the project I was really working on was something called Database App.

And the idea was, hey, we're all storing information. The center of any new software in the web, software as a service, is a database. Right? And so why don't I create an online application that lets people store things online and we'll have little modules to put information in through forms, take it out through reports and then maybe do some other things and it was kinda this generic idea.

So this product, Database app, was great in that it was a vehicle for me to learn how to program in Linux with my sequel and PHP, which were kind of the still popular tech stack, but definitely popular back then. And it was, it was really value exercise, but the product and that exercise that I worked on for a year had one very big fatal flaw is that no one wanted it.

And it wasn't, it was a generic idea, but it didn't have much customer application. It was just too horizontal of an idea. Mm-hmm. So we got to the end of 2001 and by this time, I'd been, not working for about a year and a half. So all the allure of working or doing whatever you're doing out of your slippers and doing the entrepreneur journey had long weared off.

It was also the.com bust. So there weren't great. Communities like American Underground and, Raleigh Founded and Launch Chapel Hill and all these other places that can aggregate and make you feel together. I was by myself in my house. So I was getting kind of pretty demoralized as you can imagine.

Also my wife and I were gonna have a baby in six months. I always believe that when things got really tough that I would figure something out and like, I need to figure something out right now. and so what I did is I took this scramble code product of Database App, stripped it down and said, there's I wanna just make it not just about technology.

I wanna figure out one customer use and build it like, flip it and how this module, it was called email merge, which basically pulled information outta the database and kind of merged it into kick out emails. If you think about oh, that winner’s prize, what was the name of when they, Ed McMann would handout, Publishers Clearinghouse, and they would publish all the different names and addresses using, mail merge.

Right. You know, so it was like that for email, and suddenly I flipped it and then I was like, okay, well I need to rebrand this. And, and I need to cut out all this other stuff in Database app. And I harked back to my days as a second grader when I loved dinosaurs and first grader. I called it Bronto Mail. Bronto, like the Brontosaurus, my favorite dinosaur and mail, like M A I L, and repack it got the domain name in January in a way it went and suddenly.

One of my good friends at the time Randall Greg, he was like, oh, actually can find I could use this. Okay, and he could use it for his local tech publication. I think it was called triangle tech journal. And that was really the first time I had someone who genuinely wanted to use it, not just because they're nice to me.

Right, and then we were able to take that relationship and he was able to get one of his buddies to use it for his email newsletter under barter arrangement. And I was able to turn those barter arrangements into exposure and get some paying customers. At the same time, I teamed up with Chaz Felix. He was actually also at Red Hat.

He was coming off of that. I'm like, hey man, you're not doing anything. Why don't you come do this? And he's like, sure. He could collect unemployment at the same time, load his bills for a little while. And that's what we did. And then we reincorporate together as Bronto Mail inc, in may I think 15th, 2002. So that was the beginning. 

Trevor: Okay. And so you found your, your use case. You're starting to attract some customers, you know, what are some of your, your favorite memories of those early days of the company? Either from when you just got started or as it started to gain some traction, what do you remember fondly?

Joe: I mean, there were so many funny stories from back of the day. We first started working at my house and when my oldest, I now have four, my wife rightfully said, you know, you guys need to get outta here. So we squatted in some space called Fusion Ventures, which is over in Bright leaf square.

Okay. My friend Randall, Greg helped set us up there and, and it was in the ashes of, of a failed .com incubator that was no longer running, but there were a lot of quirky things about this office. Plus it was only a hundred dollars a month. That was great. 

That is great. 

Payable to Randall, but whatever, and he said, there's some key things like the phone system, for example, you can call out with the phone system, but you can't call in because it's leveraging the phone system from the people who are renting the space below us, they're okay with it, but don't mention it. Which, and we did that and we would use our cell phones. So there's a lot of hustle, leaning mean those early days, which are very fun.

I think there's such a long, interesting journey in Bronto. And I think my fondest memories always were around the people mm-hmm, you know, hiring a great person, seeing them stay with us for a few years and become something interesting. And taking someone who might have been right out of school or had a, you know, retail job doing something different, giving them a career in sales, or maybe they're outta school and they become a software engineer. And next thing you know, five years later, they're still with us, taking a senior role.  

So there are lots of individual memories, but I think what was most rewarding were ones had to do with the people interaction in these really great, wonderful people that we hire over the years, which we finally called Bronto's.

Trevor: And, and how did you attract the Bronto's, that the people that you wanted to work with and how did you, I dunno, convince them, you know that this is the company that they wanted to work with. 

Joe: So in the early days it really was about hiring part-time interns from UNC. Okay. So 10 bucks an hour, 12 bucks an hour, $15 an hour. They're looking for jobs. Yeah, and so $15 an hour got it done back then. That's what we did then. And then we actually, our first marketing person was that way.

Our first finance person was also an undergrad at UNC intern. I think our first support person also Britney Sheaf also was like that as well.  she was coming out of the math department there and then we're able to convert some of those people into full-time people. So for example, Brittany Wallace was our first part-time support associate.

She graduated, and we able hire full time.  For not enough money, but we were, we didn't have anything. We, you know, we had our people for very little and they're willing to come on for a little while. We hired Eric Boggs now of local Rev Boss fame. I think he had a job a year off school, and we're like, we can't offer you much, but this is what we got. And he was young and hungry and sharp. And so he's willing to jump into it. So 

Trevor: Now do you feel in those early days, are these people buying into an idea? Are they buying into the people that they're working with? I mean is a lot, have to do with your personality and Chaz's personality and it's a good group to work with, or did they have a vision of what the company could be?

Joe: When you're hiring 22-year-olds and 21-year-olds and 23-year-olds, it is partially just a job with that's fun. Okay. I think if we had to sell a greater vision and we're trying to hire 40-year-olds, we would've had a really tough time because it was, we were sharp and we were very driven, but we are very, very scrappy.

We had no benefits. Yeah, the office was just kind of very loose. We're working off of, we bought old tables from duke surplus store. Like not really the nicest accommodations. So I think because we're able to start organically with a bottom-up approach and start with interns in school and then shift to recent grads.

And with time, hired people a few years out and as a business got more revenue and it could forward more that level of person we hired seemed to match our level of maturity. And as we got further, we also got to be more sophisticated leaders and we're able to articulate our mission better.

So I think as we get further on. We did not pay top dollar. We, we tried to pay competitive salaries, but it was, Chaz and we're very, very involved with the company culture. And we like to think it was a great company culture and it was a very engaged company culture. And so people bought into that.

They could pick up on the enthusiasm and the excitement and how much we're into it. And once we started hiring people, they're a little bit further along in the profession. It's it was infectious. They wanted to be part of it. As we got bigger, we're also, we focus a lot on our office as a representation of that.

Be very creative and engaging. We pretty much grew up in American Tobacco, once we moved out of this fusion ventures place and at office that was embodied. I think what America tobacco campus wanted was a very creative software company that was doing great was very professional, but was kind of fun and sharp and our kind of own little local Google and that's what we did. And that as we got bigger and we had people sing the praises of how much they loved it to work at Bronto, it made it much easier to get more people who wanna be part of it. 

Trevor: Yeah. That makes a lot of sense. Is there something in your mind that stands out that you would do differently. Kind of in those early days of the company, you know, mistakes that were made or just you wish you'd taken it a different direction.

Joe: So if I go back to what I know now, right? I know, I know a lot, I didn't know so much then. So by bootstrapping the business, it allowed us to go with the pace of our learning and not do far ahead of ourselves. What I know now, I kind of know how things are gonna play out. And so we could have been more aggressive in our growth. And I, would've not ruled out funding because I would've known how to manage it, and I know how to deploy it in a very efficient way. Right, but at the time, I didn't know those things. And I actually think most early-stage founders don't know those things cuz you have to go through it.

But I think we were so lean and mean and sometimes I think it was too much, like I remember in 2003. It was 2003 2004, you know, we're probably making 170K a year. I think that's, those are run rate and we had something like 30% profit okay. That's great, but as a growth startup, that's bad, we really should have had 5% profit or 3% profit because we could have redeployed that into sales or hire in a full-time engineer earlier because we had to duct tape a lot of things. Mm. And it was very stressful and probably curbed growth. 

So I think we could have, by oddly enough, not been as lean and mean early on, we could have accelerated our growth a little bit. And, you know, in some cases we burned out some really good people.

And so I think early on, we could have been a little bit smarter than. We had this big also in 2006, so we're probably about 5 million business, we had this big instant called the May massacre. I think it was May, 2006 where we were completely rewriting the product. Okay. Not incrementally, just the whole thing.

And we pushed really hard and the product ended up coming out just as a complete disaster. It didn't work. It didn't work, had tons of problems, and we ended up giving every, all our customers a free month. We thought everyone was gonna quit. It was so stressful, and at the end of the day, we lost very few customers.

We lost very few employees. We did lose some, yeah, once we got through that. But I think the, the leadership lesson there was, I was pushing to get something done out the door, but I wasn't necessarily doing a good job of listing to really the feedback from the team of like, yeah, we can push it out there, but it's gonna be a disaster.

And it was a disaster. And that really was the moment also that I think Chaz and I realized, this is real. This move from like, hey, we've got some like young kids and we're making these things or it's kind of fun and we're not doing it, to you know, we had people who had families and they're married and they may have a child.

And so people were starting to really rely on us, and those are employees and then customers, they were very upset, they're really trying to run their business, our product. So I think having that wakeup call then versus three years later was actually a lifesaver because it forces to mature quickly.

And kind of go through that awkward teenage year before the stakes got really, really high and we made a lot of changes and we fundamentally looked at the business and kind of, I wanna say, took it more seriously from that point onward. so we tried to learn from our mistakes. 

Trevor: Well, that's always good. So then how did the exit come about if you could talk a little bit about that? 

Joe: Sure. So we sold to NetSuite in, we announced the acquisition in April, 2015. Okay. And we actually closed the acquisition June, 2015. So there's always a few months in between because there's a, we are international operation by then. There are a lot of details have to be worked out there. How that came about was in the beginning of 2014, and for the last couple years, I, as a bootstrapped company, I Chaz and I realized, hey, you know, we we're too insular. We, we need to get our name out there more in the investment community, in the partner community, because we're gonna run into hurdles if we're just insular in our approach to things.

So I, we started networking more and we would go out to, technology, investment conferences in San Francisco. And we were going out to one called the Pacific Crest Investment Conference that we had been to before in, I think February, 2014. And as part of that, I've learned something about sales.

It's like, hey, if you're gonna go out somewhere, don't just like hang out, tried to arrange a lot of other meetings, right with key people. And so I did that. And one of the meetings I tried to arrange was with NetSuite, they were in San Mate, which was in SAR far from San Francisco. And they recently hired this fellow, Andy Lloyd to be the new general manager, and they were building up this commerce division. And by that time Bronto had evolved from a very simple email marketing for small business tool to really focus on online retailers and do what we called commerce marketing animation.

So connecting with NetSuite made a lot of sense. Yep. I reached out to Andy say, hey, we should grab coffee. And he was like, maybe okay. Not sure. and then coincidentally, I had an investment banker who was prospecting with me the last couple years. And he was very friendly and I actually is one of the few that I actually enjoyed talking to Peter Falvey.

And he, and I mentioned offhand, like, yeah, I'm actually going to the Pacific Crest Conference out in San Francisco. And then I might go grab coffee with the NetSuite guy, but I'm not really sure he's gonna do it. He's like, oh, interesting. One of the things I'd done, I had sold the business to NetSuite. Let me make a call and see what happens mm-hmm. So he calls, so Peter's based in Boston. He calls this other investment banker in Boston, named Giles. I can't remember his last name, that represented NetSuite in all their acquisitions, and Peter and Giles were smart enough to know that, hey, there could be something there.

Right. And this is what Peter does. Yep. And he tries to get companies bought and sold. next thing I know he calls back and like, okay, oh, this little coffee maybe happened meeting. Yeah, let's do it at the NetSuite office. and, yeah, come talk to us and they start getting a whiff.

It's like, this might be more than coffee. This is more than just the casual, this is more than coffee. And so I kind of go over there and I was like, you know, I better be a little bit more prepared for this and they go over and I go into a conference room and they're all there. Oh. And they're like, can we see a demo of your product?

And I'm like, okay, let's do this. And fortunately, I had coded the first version of Bronto and I had oversaw for many years, the product engineering team. So I was familiar still with the product. And even though I didn't demo it every day, like I knew how it worked and, and it's funny, they said that because afterwards they’re like, you did a great job. Really appreciate it. We're gonna follow up and ask you more questions later and have additional meeting, and like, we're really impressed that you can demo your own product. 

Oh, wow. 

And I'm like, really? It's like, you would be surprised at this level, how many tech leaders can't demo their own product. And yeah, and so it got dragged out a little bit, but that led to a meeting with all the C level people, a NetSuite in August. And then a few months later that led to, a letter LOI, a letter of intent, and then eventually went through the due diligence, which is the process you go before you're acquired to make sure everything's legit and then led to, a purchase.

So it, and it made sense for us. I, I think a few notable things, I think a lot of acquisitions don't take that long. Okay. But in our case, we weren't looking to be bought. We're executing our business. We're doing great. I mean, we are still growing 35% on a big number. We had by that time, international operations in Sydney, Australia, and London, and we had small offices in New York and LA.

So we were like going. At the same time I think as CEO, I recognize that for us to become a public company, you know, we are at 40 million. We we're probably have to kinda get to like, maybe at the time we're lost than 40. We probably have to get to a little over a hundred million. We, we are gonna have to do something we are probably gonna have to take a big round of funding or partner with someone big to, to continue the momentum, to do what we're doing. And we wanted to stay a high growth company because by being a high growth company, we can continue working with great people. A lot of great people don't wanna work for not high growth companies.

So it was a long courtship. It was one where we weren't looking to be sold. And that's what they say is the best companies are bought, not sold. Yep. Right, and we, NetSuite was the right size, right? So they were about 12, 15 times our size. So they were bigger enough to write the check right. To do it, but they weren't so big that we thought we would get lost in some endless machine or we'd be strip for parts. We would be our own division.  

so organizationally it, it seemed to make sense. We'd have the right level of independence, continue to do what we're doing, while they could still pull it off right.

Trevor: Now, I had heard from another retelling of the Bronto story that the deal almost kind of died at the V on the vine that there was like this last-minute kind of struggle. Can you talk a little bit about that and what that experience was like? 

Joe: Sure. So you'll appreciate that. So we had, legal world, so NetSuite was represented by Goodwin, Proctor out in Silicon Valley. Yep. Scott Eldridge was our general consult. At the time he had previously a general consult at, at Channel Advisor. He recommended that we work with Cooley, which is a, a large I'm sure everything law firm, but particularly good at tech. And we worked with a partner out, out of the San Francisco office. It was kind of good to be in their same backyard.

We were kind of, after months, hashing things out, hashing things out and NetSuite had purchased a lot of companies, but they've all been small. They've all been value buys. And we were, I dunno, at least four or five times bigger than their previously large acquisition.

And so we had this meeting, Kathy, it might have been in February, 2015, where we're gonna meet out. We were having struggling getting through these last legal things, we're like, well, let's just do it in person hash. so we go meet in the Cooley San Francisco office in this beautiful boardroom that's looking out on some amazing street. And I remember I was, it was Chaz was there and Will Sendel our CFO was there. And we're, we're waiting for them to come in. We're gonna be on one side table and we're gonna spend all day, no matter what takes to hash out. And the first thing I do is like, okay, here's our strategy.

And I go to the other side, the table and I lower all their adjustable chairs and I hire us. So when we go in I'm like, this will be, this is such a sinful, like, yeah, this will, this will intimidate. 'em of course they all sit down. They think it's kind of weird and they adjust their chairs instantly. Like, oh God, that's our move. We're screwed. And so then they started going through all this legalese, which I kinda half understood, but a lot of founders, they focus on the price, but it really is about everything else that matters because these are all the claw backs and what counts and what doesn't count.

And they really can affect the purchase price, what you start with and what you end up with are gonna be two very different things. So we're paying these lawyers a lot of money for a reason. And they're earning their keep. But it got hung up on two, what I, it would seem to me very arcane legal issues, but very, very important ones. And it got to a point toward the end of the day where we separated into different rooms.

And I came back and I had to say what our position is, and it's kind of like, this is what it is, take it or leave it. And they're like, we can't do that. And then everyone walked away and then everyone was like, I think in their own minds, like what the heck just happened right? We've been working on this deal for so long.

I mean, I don't think everyone was just processing of like what what's going on. But no one was willing to move. And I remember, Chaz, Will and I we're like, yeah, afterwards we're like, okay, we just need to get a drink. We go to the hotel, cause it's like five or six at night that time.

And of course my, my attitude, as I've been described fiercely independent, I'm like, ah, F those people, like whatever don't yeah, we're gonna do something else. And I think we concluded that the deal was dead, but it wasn't dead, dead. And will and we got a little, not anyone got emotional, but we got a little too fixed in our positions.

And so Will the next day he went out to San mate, their office and talked to their CFO and I think everyone's in shock and annoyed. And he was able like, okay, we're not as dead as we think it is. You know, and he was able to like, get us back to the table. And I, I forget exactly how we're able to find middle ground on those things. And we're like, great. We're back on. And that was only, that was not long before we announced that deal. And we had done a lot of work. 

Trevor: Well, it sounded like it right at the goal line. 

Joe: It was right at the goal line. It was kind of crazy. So, you know, that's, that's how it is. I mean, I'm sure you see it all the time, the biggest thing that kills deals is time right. Things dragging out, and this is dragged out a lot and deals die all the time. And often it's just personality conflicts or egos or whatever. And, and they also happen for those reasons, too, you know, to, 

To talking about egos, when they originally put an offer the CEO I think left me a message on what they're gonna buy Bronto for, what they're gonna offer. They first offered a hundred million dollars and that, which is insulting it was over voicemail. And I, I had later communicate professionally was like, listen, kind of, this has been a waste of time, right? Like, you're clearly trying to manipulate the situation. 

And I was professional about it, but what they, I think they realized, but didn't quite realize, this is a business between Chaz and I, we own all of it. There's no outside investors. So if we wake up one day, particularly me as a majority investor, and I said, I just don't wanna do this. It ends. There's no pressure for any board member who's like, oh, I really want to get that Corvette. No, it just ends. Yeah, that's it. And that was a very unfamiliar space for most acquirers. 

Trevor: I was gonna say it has to be unusual for them. Cause that's not what they see. 

Joe: Yeah. And I'm motivated by a whole bunch of things. So that push back and then they quickly came back and said, no, no, no, no. We didn't mean to tell you that, like two days later the investment banker comes like no Giles, we didn't mean to tell you that, that wasn't supposed to get out. It really was 150. I'm like, okay, well one, I don't completely believe you.

Right. But whatever. I was like, hey, thank you very much. That's respectable. But that, you know, from the beginning, I said, we're not gonna look at anything. Like, it, it, it really needs to be closer to 200, you know, and just, yeah, just, just what it is. And thank you, you know, it was very respectful. In fact, I remember I was driving, with my family.

So at the time my kids were even younger, so they're probably all screaming and doing whatever. And I'm trying to like merge on some highway and I'm trying to take this call at the same time and be respectful and say, hey, listen, I'll think about it. I already knew my answer, but I'll think about it. 

So I went on this camp out with friends and my family and their families. And I think a number of folks there noticed me, like dazing off into the fire think I'm either like highs a kite or whatever. And I was like, I don't think they realized what I was really contending with, right. And you know, how am I gonna tell this guy that like, we're just not gonna do this, but I came back next morning and said and told, hey, thank you very much. We're not gonna do this, and then the next thing they're like fine, 200, you know? So like some level, it sounds crazy as much as there are people who go through lots of spreadsheets to figure out the perfect answer and they justify it at the end of the day

it's what a CO wants to do, and can they justify to their board? Yeah. And it just comes down personality and they liked us and we, you know, it seemed like a good fit. And the reality is it is an imperfect market. If you want a start that looks at this, has this tech stack, does this size. You don't just dial up and order like a pizza.

It's like, you're actually limited to a certain set of companies and they actually have to want to do it. And that is really, really hard to find, right. And so I think he realized the value of having it was better than not. And he's like, Karen, let's just do it. 

Yeah, but your value is whatever somebody will pay for.

Right. That's whatever someone's got pay. And then today, you know, maybe a year ago's market, maybe it would've been twice or three times that, and, and maybe 10 years earlier, would've been half that. So. It's just kind of how it goes. Yeah, so it's kind of funny. There's a lot of in terms of get making things happen and closing deal. It's a lot more about the human emotion than is in terms of the numbers on screen. 

Trevor: I think a lot of people sometimes don't realize how much that personality plays into it.

Joe: It's scary. It's scary. I mean, I think I've negotiated things at like thrift sales, you know, harder than how it worked here.

Trevor: Now I do wanna set some time to talk about Jurassic Capital, cuz you didn’t you know, sell Bronto and ride off into the sunset, you've started a fund now. So what prompted that? Why, why didn't you just kinda take the easy road and just go off and do something I should say, I shouldn't say do something fun, cuz maybe this is fun.

Joe: Yeah, it is fun. So the transaction closed in June, 2015, Chaz and I stayed until April, 2016. Okay, almost a year. And then I pretty much took the rest of 2016 off, and the beginning of 2017, I started something called Colopy Ventures, which is really the LLC for my family office to do whatever I wanna do.

And I've experiment with things. Right, a lot, some things worked, some things didn't work. One of the things I started experimenting with was, Grep beat. In the summer of 2018, I stumbled on Pete Macantaggart, to be the editor there and he's still with us doing that for four years. The other thing was, I always felt in growing Bronto, there was a, some gaps in the funding market where we had a lot of people doing angel funding.

But what would happen particularly in the bootstrap world is, and these would be peers of mine at Bronto, they would get to a few million dollars in revenue and they would kind of just top out, and Bronto was just like them, except it wasn't.  We kept on growing and it wasn't because of funding. None of us had funding. It wasn't because of market, cuz we're all in the same market and we all evolved and twist and turn different ways. So what why? And it really comes down to, you know, Chaz and I were different type of founders, but maybe we had some things, some of these other folks didn't. But some of the people were pretty good people and very talented.

So maybe an investor, a capitol provider could fill in some of those gaps and how, what would be like a one, two, $3 million a year revenue company become a 10, 20, $30 million a year company. And so I always kind, kind of kept with me. I always have things I'm thinking about and one of them was like, you know, there really needs to be like this Approach to what we call early growth equity.

 Where we invest in companies that are doing a few million dollars in the region, and then how do we get them to like 10 million in reoccurring revenue? Because at that time, or now, especially even more, there's a very, very rich investment growth equity market at that size. And maybe even a little bit lower now.

So if we can just help bridge that gap, we can take things that would be nothing. Or no one would remember to something that people definitely remember and have a huge impact in the area. At the same time, we had a, a brought to reunion in like June, 2019, over at the Unscripted Hotel, we had a few hundred people came back and it was as raucous is one of our early Bronto parties and people had a great time and I reconnected with people. And one of the people I reconnected with was Kevin Mosley. 

So Kevin Mosley used to work for us at Bronto, more so with Chaz doing financial planning analysis. So he'd really help us figure out how to scale and he worked for our CFO. And then after Bronto, he continued with par NetSuite. And then as you know, The Bronto NetSuite was part of Oracle. He continued with that. And then he went to another software company we reconnected and it's like, hey, listen, here's some of the things I'm thinking about.

He's like, Ooh, this is really interesting. It's like, you know, you actually would have a perfect background for this early growth equity play. You're used to taking small software companies and figuring how to scale. It's not nothing, but they're like doing a few million in revenue, maybe a little more and like getting them to be bigger and they need a certain playbook, operational playbook to make that happen.

You're used to implementing that several places, and you're in a place in your life and you're young enough and have a hustle add to enough to want to do something crazy. Yep. It's like, let's try this. We said, yeah, let's do it. And so in September, 2019, somewhere in there he joined, we named it Jurassic Capital to focus on the thesis.

And so far we've made three pretty big equity investments. We've did one small debt investment and we started off with just, what are called SPVs, so Special Purpose Vehicles. So we just raised money for our transaction. And then at the beginning of this year, we started to raise a proper fund.

Okay. So yeah. 

Trevor: Well, I mean, it kind of leads into that next question. Cause that's, as I think as a capital fund, I think of, kind of three buckets. You have to attract investors. Yep. You have deal flow and then you have kind of working with your portfolio companies. Yep. How do you think about, or how do you prioritize your time kind of at Jurassic amongst those three? Or do you kind of break it up amongst the, the partners there? 

Joe: Yeah, so our team's a little bit bigger now. Okay. So Kevin and I are kind the general partner. So we're the ones like on the hook. you know, for doing this in the spring, we hired Chrissy Witty to be an associate to augment efforts.

She had spent a number of years at JP Morgan in an innovation group before that. And she was an undergraduate at Kenan Flagler before that. So she really helps us tremendously. We have what's called operating partner, Chaz Felix, my co-founder from Bronto. So he helps us on a part-time basis. Okay. And through that, we do all those things that you mentioned. I would say from a deal flow perspective, we actually get a lot of inbound because we have a very differentiated story.

I'm kind of out there as a successful bootstrap entrepreneur. That helps us and I think Chrissy is really the one who's kind, managing the beginnings of that. And then as it gets more serious, Kevin gets involved and as it gets really, really close, I get involved. So we have a, a, a funnel there of sorts. 

When it comes to working with the companies that is, that used to be a lot of me and Kevin., it's probably more so Kevin, but now Chaz is very involved with that and we. soon, are launching a whole operating advisor group of people to help us do more there. So we're all involved, but we're all kind of involved in different ways. Okay. And then from the investor perspective, I am the anchor of the fund, right.

So I am a put my money where my mouth is kind of person and we are newer at that. And so we've all been involved with that. I would say I'm starting to get more involved. Then maybe some of the other folks. So I think we're kind of separating a little bit. I think we're seeing cha is getting more involved working with the company compared to, he's not as involved with other things Kevin's involved in everything.

Chrissy's a little bit more involved in like working through the deal flow and I'm a little bit more involved in the fundraising, but we're. it's small firms, so we're still doing all of everything, right? 

Trevor: Yeah. That makes sense. And you know, a lot of our listeners kind of wonder, you know, what can I do to help stand out when I pitch to an investor? Or what are some red flags that, you know, might turn investor off of showing some interest in my company. Do you have any feedback or guidance that a young company might think of as they're thinking about pitching to investors? 

Joe: Sure. It is a courtship and is a match. So all investors don't invest in all things, and it goes back and forth.

So I was pinged today, an entrepreneur with a startup. They just started and I said, hey, this is really interesting, but I went pass on meeting, but maybe she talked to So and so and the person very wisely came back and said, hey, you know, what can I do better? Is there something that I should have said and said, no, I I'm actually just not actively angel investing.

Right. It's nothing about you. It's all about me. So I think just making sure, knowing where the investor is right. At Jurassic, we get a lot of random inquiries, we're very clear on our thesis. We focus on B2B software companies in the Southeast doing between one and 5 million reoccurring revenue, lightly capitalized.

So if you're B2C, if you're in Oregon, it's just not gonna make sense. So, so I think you first have to kind of realize that investors invest in different things and you need to be aligned with that. And also you need to pitch your story to that. So. The one thing, the second thing is I don't just get the email.

It's like, okay, let's do it. I mean, I'm not buying, you know, like something like a buck pen from Costco. Right, right. You know, it's like so there's a little bit of a relationship. So there is a little bit that has to be more of a soft sell.

All our investments, you know, we've gotten to know them through maybe a year before. Doesn't have to be that way. Yep. But it tends to be through networking because at the end of the day, we're risk mitigators. So if we don't know you, we can get to know you, but we're also trying to mitigate risk of random things. And as a Jurassic, we are very involved. 

Investors are different. We are all into it. We are here to operationally help build your business to get to the next stage. And if it's just kind of dumb money, as they say, we're not a good fit. Yep. It can be a good fit for someone else. And that's great. That's just not what we do. And that tends to get sorted out in the initial conversations too.

Trevor: Again, it's so important to know who you're talking to and what it is, but they're exactly. So, you know, we are the Founder Shares podcast. And so I like to ask all of our guests, you know, if, somebody was a young founder and were thinking about starting a company or already have a company, what's one piece of advice that you would want to give them?

Joe: I think most young founders or founders try to raise capital too soon. They'd be better folks, more on the traction than the story. Investors always wanna invest in traction, trying to pitch a story, which I think is kind of me misrepresent out there in the press. Like I wanna hear this magical pitch, then I'll get into it. I think doesn't help entrepreneurs. 

Focus and building your business. Get the customers be lean and mean that's what I'm attracted to. that's what most other investors are attracted to, more than the idea. 

That's 

Trevor: great. I appreciate it, Joe. Thanks so much for taking the time out today and I appreciate your insights and sharing your experiences with us. I really appreciate it. 

Joe: Thanks for having me.