Thu Dec 14 2023

Fundraising Challenges:

• The speaker's attempt to secure funding for their brand involved pitching to over 100 investors and family offices, resulting in significant rejection.
• They aimed to find an investor committed for at least 10 years, emphasizing the challenge of obtaining long-term commitment in fundraising.

Lessons on Building a Brand:

• Emphasizes the importance of creating a great product before focusing on social impact or mission-driven aspects when building a brand.
• Highlights that brand represents values and is about how it makes people feel. It's also seen as a representation of what matters to individuals and their values.

Entrepreneurial Journey and Vision:

• Shares personal experiences from childhood, highlighting the impact of frequent moves on shaping compassion, empathy, and the ability to think differently.
• Discusses how a period of depression led to the founding idea for Cotopaxi, an outdoor brand aiming to make a difference in the world by using profits to fight poverty.

Building High-Quality Team:

• Provides insights into recruiting top talent early on by leveraging creativity in compensation packages, including offering equity stakes with potential upside tied to business success.
• Advocates that exceptional entrepreneurs are adept salespeople who can effectively communicate their vision, thereby convincing talented individuals to join them on their mission.

The Purpose of Entrepreneurship:

• Encourages entrepreneurs not to chase wealth but instead focus on making the world better through their business while ensuring employees have life-changing experiences and add value to society.
• Stresses that entrepreneurship should be driven by purpose rather than solely financial gains. Acknowledges that there are various ways (including venture capital) to build businesses

Fundraising Challenges:

• The speaker struggled to raise funds for a business committed to at least 10 years, expressing the challenge of finding investors willing to commit long-term.
• Emphasized the difficulty of fundraising, highlighting the need for persistence and understanding market timing as essential factors in successful fundraising efforts.

Venture Capital Misalignments:

• There's a misalignment between the founder's vision of building a durable brand beholden to its mission and purpose versus investors seeking returns within shorter time frames.
• While everyone desires growth, there are misalignments in terms of timelines and priorities, leading to challenges in maintaining alignment between founders and VCs.

Gender Dynamics in Investment:

• Women have taken leading roles as major investors in their business, suggesting that they better understand the purpose behind the business than men do.
• Finding investors who align with the brand's mission and purpose is emphasized, pointing out potential challenges when investors don't resonate with the company's values.

Lessons from Fundraising Efforts:

• Entrepreneurs often underestimate how difficult fundraising can be, not realizing that rejection is common and may require persistent efforts beyond just a few attempts.
• Many founders fail to comprehend the level of ambition required to attract venture capital funding, needing to present a grand vision backed by data demonstrating substantial revenue potential.

Long-Term Funding Products:

• The scarcity of longer-term fund structures available for businesses like Cotopaxi indicates a gap in the market for permanent capital vehicles or extended fund life cycles.

Fundraising Challenges and Decisions:

• Damien, a former president of the North Face, was considered for a leadership role due to his connection with Cotopaxi's mission, but desired the CEO position.
• Davis prioritized impact over personal ambition when hiring Damien, emphasizing that he is not in it to be CEO forever but to make an impact.
• While acknowledging Patagonia's commitment to their mission over decades, Davis criticized their shareholder structure and emphasized wealth distribution within his company.

Entrepreneurial Parenting and Culture:

• Realizing his focus on company culture surpassed family culture, Davis established core values and rituals at home aligned with the S-M-I-T-H acronym.
• OfficeVibe is used as a tool to measure and track family culture through polls sent via Slack, allowing identification of issues before they escalate.
• Time is highlighted as the most significant factor in parenting, with spending quality time with children being irreplaceable.

Career Evolution and Future Plans:

• A shift in mindset led Davis to consider various options for Cotopaxi's future, including M&A processes or going public at the right time.
• Concerns about public market valuations affecting consumer brands are acknowledged as potential challenges.
• Post-Brazil mission, Davis aims to focus on purpose, mission, and impact while rallying other business leaders towards social good.

Personal Reflections and Lessons Learned:

• Despite initial struggles in Brazil, leaving everything behind for a meaningful cause is viewed as a painful yet valuable experience.
• Balancing love and high expectations is emphasized as crucial in parenting.
• Reflecting on personal growth, Davis desires to be less self-concerned and aims to be remembered for serving others.