Entrepreneurs Boot Camp Interview #12 - A Female CEO's View From the Trenches
If you've ever done a major home improvement project (or seen them done on TV) you know that in the midst of the project everything is a mess and looks far worse than it did before you started. A surgeon could tell you the same story about the human body, it looks pretty awful while the repair work is getting done. Rebuild a car engine and you understand the principle as well. Change your golf swing and watch your game disintegrate before your eyes for a while.
The fact is, things often look worse before they look better.
A business can look that way too at times. Just ask any CEO that has successfully navigated a major pivot, implemented a merger or taken a company public.
So why would a successful company undergo that kind of pain?
To come out stronger, better acclimated to its market, better able to complete a capital infusion and better positioned to increase its market share.
A few weeks ago I related the story of Krista Whitley, Founder, and CEO of Altitude Products. I suggest you read Krista's inspiring funding story as a prelude to this post. She had no success getting the attention of investors. You might jump to the conclusion it was due in part to being a female CEO. You would be partially right but also wrong. That was not the main holdback. She was making classic mistakes most entrepreneurs make when approaching investors.
After vetting Krista's company, she had a company that was up and coming in our view. We partnered Krista with Tony Smith at Blue Moon Consortium, had her company thoroughly vetted and introduced to funding sources. Within weeks she'd made the right match and secured her first round of capital. Since then, Altitude has continued to grow and diversify. It became apparent to Krista and her team that another round of funding was going to be needed, this time a larger infusion from a sophisticated institutional partner, as the company matured into a market leader in its niche.
Krista accepted my invitation to talk with George Kenney and me about the Entrepreneur'$ Boot Camp. We hosted the entire Senior Management team of Altitude at our offices and the team decided to go through Boot Camp to prepare for that next round of funding. They're currently a few weeks into the program and I had a chance to get Krista's thoughts and insights from the trenches as she and her team go through the paces to be ready for a $10 million fundraise.
Krista, what had you decide to do the Boot Camp since you had already successfully raised $3 million dollars?
One of my mentors taught me that your company can only grow to your level of leadership, so devoting my life to educating myself to grow as a leader has been fundamental to the success we have experienced so far. Continuing that education with Boot Camp was an excellent opportunity to learn from experts, but what really sold me was that they allowed my leadership team to go through Boot Camp with me. Too often as a leader, I go to a conference or seminar, only to return to the office having "drunk the kool-aid" and trying to communicate the education and inspiration I received. Inevitably, that falls flat and it is a challenge to implement impactful changes. During our first video conference with George and Rob, my Director of Operations and VP were able to meet them, ask questions about the program, and we agreed as a team that this was an important next step for our team to grow.
Did you go into the Boot Camp with an idea of what you wanted to work on with George and me?
My goal of Boot Camp was to grow as an individual leader and to grow as a leadership team. We view Boot Camp as an educational experience and opportunity to improve. We just completed our second week and it has been a whirlwind for our team! During the first week, we had a publicly traded company make an offer to acquire us, which you and George were able to guide us through. The greatest value has been your energy and enthusiasm for sharing your years of experience. You guys are walking encyclopedias of entrepreneurial wisdom. You can't get that anywhere else that I know of.
Have you gone through George’s “Deal Scrub” process to look at all your business hypotheses through the eyes of an investor? If so, what did you learn?
Altitude Products is the first organization I founded with the end in mind. My end goal is to exit so that I can add another female venture capitalist to the world. There are far too few venture capitalists who are women and I would not be where I am today without our lead investor, Krista Waddell. Krista has believed in my team and me at every step, writing checks that have been as equally valuable as her support and guidance. George's Deal Scrubber process helped my team and me to wear the shoes of a venture capitalist, so we could better understand their perspective. So, it wasn't just to improve our offering (which it did) but for me to learn to think like a venture capitalist so in the future I can help other women get their organizations funded.
Have you worked on your pitch? After all, it was successful in raising capital already, so what insights did George & I provide?
My team and I are continually refining our pitch. All of our investment raised to date was private equity and high net worth individuals. You have helped us to refine our pitch for professional venture capitalists. It has been tremendously helpful to understand the "croc brain" of venture capitalists. (Note to readers -- to understand what Krista is referring to and why it is so important to understand, please read my post on the subject)
George usually tries to help find “the Golden Nugget” that way to express yourself, your team and your proposition in 30 seconds or so. Have you worked on that? What insights?
Right now we are torturing ourselves trying to refine, refine, refine until we get down to something that is as good as Napoleon's "World Domination/Conquer Western Europe/Latest Technology" pitch. The real goal is to have something as viral as "Botox in a jar- no needles." Now THAT is the guy I want to meet. I have yet to share that product concept with anyone who wouldn't buy - my husband included! As lean startup entrepreneurs, we are wired to move quickly and one of our greatest challenges has been to slow down and allow our minds the time to refine. We're frustrated that it isn't coming easily to us, but that frustration is what we needed. We needed a challenge to rally around that will result in a viral pitch for our organization. I am confident that in four weeks we will be giving the botox fellow a run for his money.
Have you gotten to the point where you’ve finalized your new pitch and presented yet? If so, what has your experience been?
We meet with investors often, as our current investors love to bring potential new investors to our facility to share the explosive growth we have experienced. Just this week we had a huge investor come for a tour and to meet our team. It went incredibly well! He loved our enthusiasm and clear vision for the future, which is why he has started the process to make an investment. Working with you and George has been a privilege and I recommend it to any entrepreneur, no matter where you are in your entrepreneurial journey.
As a female CEO and entrepreneur, have you found any special challenges with raising
money in what is still a male-dominated investment world?
Isn't that a damn shame? The first two years of my company I led a pretty charmed life. I'd never raised capital for the company, we were profitable from day one, and I focused on growth with the war chest I had built one day at a time. The first investor meeting I landed with the help of a friend, who connected me to a powerful cannabis investor. I was in my Sunday best, prepared for several weeks, and presented a flawless pitch about why he should bet on me. His first response? "It's cute that you want to make money like the big boys" Then, he proceeded to tell me all the reasons I would be crushed by men in suits. There was not even one second where I doubted myself. I was well aware of the men in suits, but I was just as confident in my own talents and how I could do it better. The 2017 Forbes list had more female CEO's than ever before. It was an underwhelming 6.4%. The greater question every business leader - male and female - should be asking themselves is how we fix that.
Women bring unique perspectives to management, one of which is a higher tendency to promote diversity of perspectives; is that important to you?
Absolutely! Companies without women in leadership roles are missing out on all the benefits of the ingenuity, perspective, and experience that women bring to executive leadership. Celebrating diversity has always been one of our organization's core values. My team and I won "Best Float" in the Las Vegas Pride Parade last year. 80% of my team are members of the LGBTQ community and we have several veterans and minorities on our team. My entire executive leadership team is women who have earned the right to be there. Our success with our organization and for our investors means so much more than one company. We are blazing a trail for generations of women, minorities, and veterans to believe that if we can do it, they can, too. The heart and passion female CEO's bring to their industries is an asset for investors. I'm confident that even the most biased investor won't be able to deny that in any pitch.
Anything else you’d like to share from your experience so far?
It has been my experience that ego is a problem for too many entrepreneurs in the world today. The best leaders are on a lifelong journey with a thirst for knowledge. I encourage all aspiring entrepreneurs and entrepreneurs to be as coachable as possible. You can't learn anything if you think you already have all the answers. Open your mind to the possibility that everyone has something to teach you. (Note to reader: Krista's comments on coachability are borne out by a lot of research that I've assessed for you here -- it's a key function of getting funded)
Key Takeaway -- take the approach of lifelong learning when it comes to your entrepreneurial skills. The time to hone your skills and prep for the next round of funding is before you need it, as Krista is doing. If you can find a venue like the Entrepreneur'$ Boot Camp, where you can train your entire team to be their very best, so much the better. Be coachable and let your mentors empower you to succeed.