Founder Chats is back! In this episode, we talk with Brian Parks, Founder and Managing Partner of Bigfoot Capital. Hear his story of transitioning from working at a local bank to running a tech company, his tips on managing your capital stack, and a whole lot more.
Brain Sierakowski: Welcome to Founder Chats by Baremetrics, where we chat with founders and hear about how they started and grew their businesses. My name’s Brian and I’m the Director of Operations at Baremetrics.
This week, I talked to Brian Parks, founder of Bigfoot Capital. In this episode, we talk about Brian’s story, how he transitioned from working at a local bank to running a tech company, some tips on managing your capital stack and a whole lot more.
Thanks, Brian, appreciate you joining the podcast today. We always like to get started at the beginning, so I’m very curious from your perspective. What was the beginning of your entrepreneurial journey?
Brian Parks: Thanks for having me by the way, excited to be here. So the start of my journey I’d say really was in 2010. I graduated college in 2004, and really the first six years of my career were in financial services. I worked for a bank and then after a couple of years I said, “I don’t want to do that.” And then worked for about five years in mergers and acquisitions, so really helping sell companies. Primarily we did some, some acquisitions of companies as well, and that was great.
Worked with some great people, learned a lot across all sorts of industries, all sorts of companies that were, had been built over various periods of time and various formats with different forms of capital and the like, and ultimately got to an acquisition event.
And I played my part kind of in that multiple, multiple times. Which was really enjoyable, but then in my mid twenties, I guess it’s like, there’s a very standard career path there, right? Within investment banking, that is. And for me, I decided that wasn’t my path. So, you know, 2008, during the financial crisis, I kind of missed the financial crisis, which was interesting and fortunate in that I spent very fortunate, especially for someone who was working in finance at the time. I took six months, went traveling, came back in kind of early 2009 and didn’t really know what I was going to do.
I took the GMAT, but never applied to a business school. And then, you know, actually went back into investment banking for a little bit. And then that revalidated, “No, I don’t want to do that with my life” and found an opportunity to join a startup. So long-winded, this was 2010. Joined that startup as employee one, you know, working out of the co-founders basement in one of their houses.
That’s then transitioned into a basement and an office and kinda, that was my first operational role, really. And, you know, you can kind of bucket me as a finance ops guy, who at this point 10 years later has done all things early stage, right? So I think, you know how that goes and maybe a bunch of folks that listen to this, know how that goes, right?
When there’s two or three people working on a company, or if you start a company and there’s one of you, you just have to do all the things. And so that was very exciting and invigorating to me, as someone who had never done that. I had really just played that advisory role, but hadn’t really built, or hadn’t even lived with that transition of that company after they sold it.
So that was totally new to me and very exciting. Since 2010, I’ve been doing that. I’ve kind of just been an early stage guy. I later left that company, went to a coding bootcamp, learned how to codewith the thought of, “I’m not going to be a developer, I’m going to work with developers though going forward. And I should try to know some stuff, right? ”
I came back to Denver and worked as a rails developer for like two months. And then actually I was presented with an opportunity to start a company. I ended up starting a company called Brand Folder, an enterprise SAS business in the digital asset management space, kind of MarTech.
I founded that company and we actually raised the money pretty early on pre-product. We can talk about that later. That’s certainly informed some things and why I do what I do these days. We built the team, took it through Techstars, you know, and then spent our time in the ether, looking for product market fit for a while, right?
Freemium model. Nope. That’s not going to work. Who’s our customer, who are these 30 competitors? What is digital asset management? What are we doing? All that stuff. Tons of learnings there with, with the market, market timing, which is a real thing, right? Is this market receptive to what we’re doing?
Do they care? What’s the right model here? All that good stuff. I ran that company for about two years and then transitioned out of that business, which is a whole nother story. And then did a couple of other things, you know, kind of for a few years within the early stage sphere out here in Denver.
And then in 2017, you know, having raised some equity myself, and having known a bunch of people/peers that had done the same, angel and venture, being a finance guy who had worked on M and A transactions where there was the concept of a capital stack. That included, you know, maybe some equity, maybe angel, maybe venture, maybe not, maybe private equity, maybe, you know, mezzanine debt financing, maybe bank debt financing, you know, a capital stack, various sorts of capital as those companies progressive that they utilized.
I said, okay, I understand that. And you know, I think I understand early stage B2B software and what comes along with it. Having spent seven years in it, why don’t we lend my, can we lend to these types of companies, right? Which may not sound like that novel of an idea but back in kind of 2016, 2017, the only group I knew doing it was a group called Lighter Capital out of Seattle, and they’d been doing it maybe since like 2012.
Then there was kind of the Silicon Valley banks and they’re like the banks that were doing venture debt lending, which basically was, “Hey, if you go out and raise a $5 million Series A, we’ll lend ya 2 million bucks.” It was like, well, there’s not that many companies at the end of the day that actually go out and raise $5 million series A , so what about the rest of them?
It was like, “Okay. I don’t think I’m an equity investor. I’m fairly analytical. So if I can understand how to underwrite and analyze these things as a lender, that’s what I want to do.” And that was the genesis of Bigfoot. And since that time, you know, we stood it up, had to convince some people that we weren’t absolutely crazy to lend money to asset light businesses that were often losing money.
Like, that’s not as easy as that thing for people to grasp. Like, “Hey, put half a million bucks with us and that’s what we’re going to do with it.” Even if we’re going to aim to deliver you a good return. So anyways, we’ve spent the first three, four years fairly prudently building out our foundation, proving it to ourselves.
And those folks that had put money with us and trusted that we could do this, that there was a market, that we could manage risk appropriately, that we could find opportunities to put their money into… that’s what we’ve basically done in a fairly reasonable format over the past four years. We funded 22 companies and put out about close to $20 million in commitments to those companies.
It’s gone really well, both for us and our team, our own capital providers and the companies we’ve supported. There’ve been a lot of really good outcomes that we’ve been able to play our small role in, and that’s where we are today. Just recently, we had a pretty big milestone for ourselves of getting some more institutional capital. Having been the group that’s done this now for almost four years, that gives us just a lot more ability to go out and basically do more of the same.
Maybe do it at a slightly accelerated pace from where we have, now that we feel good about the kind of foundational elements we’ve put into our own business. And that’s it.
Brian Sierakowski: That’s great. Well, it’s cool that (correct me if I’m wrong here), but it sounds like you went into college with, you’re sort of on like that traditional… like, you were going to get a job, like a regular job.
And now you’re in a business that people thought, “well, you know, you’re on the opposite end of like, that is a business idea that does not currently exist”. And maybe you’re crazy for trying to do this thing. Was there anything before you entered college where you had that same mentality of “Maybe I’m about to go on this crazy path and a different non normal person job direction?
Brian Parks: You know, I think for me, andit even probably comes from my dad who is retired now, but was a physician, we were kind of like ideas guys. And like, maybe tried in a half-ass way to like, do some stuff, right, Like inventor mindset or like, “Oh, this would be cool.” And like, you know, its MVP doesn’t include software, but whatever.
I think that was just kind of like that curiosity, that desire to like come up with new things and, you know, maybe even test them and that, maybe we’re just wired that way. Like it just constantly happens. A lot of things pop into your brain. I think that, that, and kind of like the sense of, you know, if it’s travel, if it’s like whatever, I was fortunate to study abroad, if it’s, you know, just experiences, right? I’ve always valued experiences over things. And so I think with that, I seek out experiences. Even in my own personal budgeting, like I just don’t, I’m not a big consumer. Like I don’t buy a lot of things. I would rather, frankly, buy experiences. Maybe that’s manifested within, you know, the path I’ve chosen professionally is highly experience-driven.
I think that’s why the early stage stuff and the breadth of things I’ve been able to do at the early stage, both in terms of the companies I’ve been able to be a part of and the roles within those companies have been able to attack. It’s just been fairly natural, right? I wasn’t that 12 year old running some lawn mowing business or lemonade stand.
Like I wasn’t that guy, but I think it’s just an inherent thing. And so for me, it just never felt that, you know, there’s some people out there, a lot of whom I know who are like, “I’m never gonna leave my job until I have a next job in place.” That’s just never been me.
I’ve just been comfortable knowing that I’m going to leave and I’ll figure it out. I think there’s some luxury there for sure, like not everyone can do that.
Brian Sierakowski: Can you think of any kind of initial MVPs that you and your dad concocted? Maybe they went into practice, or maybe they didn’t, but you know, at the time you’re like, wow, that is like such a cool idea.
Brian Parks: Man, I’ll caveat this with, I have a terrible memory, which my wife and many people who know me can attest to. I went to a school that did cool things like an Inventor Fair or what have you. Back in the day, in the nineties, I guess, there was like the Ball Stall. I did a lot of sports as a kid and there were balls all over the place, tennis balls, various shaped balls.
So we built the Ball Stall, which was simple, like six by two, six by one, on various containers there and where you can store your balls. This is, you know, 25 years ago.
Was it innovative? I have no idea. Did we try to take it to production? Do we have a good time doing it? Yeah, absolutely. It was in our garage for years and served a purpose. Yeah. We didn’t try to take it to market, certainly.
More recently though, with my wife in 2016, 2015…. We have a cat, we love our cat. And I’m very punny. Bigfoot, the name itself kind of came out of a pun.
So my wife was doing yoga in our house and our cat would like, hang out on her yoga mat and weave underneath while she’s in down dog and all that stuff. We were like, “Meow-mastay.”
Another time he was in my home office, sitting in my office chair and I’m like, “Oh, he’s holding office Me-owers.” So we found a designer locally and basically started a t-shirt company called Gato life. So that was kind of interesting. We sold, you know, a couple hundred t-shirts right.
But at the end of that, my wife is a teacher and was like, “I just don’t really want to do this.” I was like, “Alright, cool.” But you know, it was fun, right? And we had a Happy Meower and Meowmastay and Office Meowers and good design and kind of built this, you know, Senior Gato, you know, cat. So just random stuff like that.
Brian Sierakowski: That’s awesome. My wife and I have, and the number just keeps going up every time I look away, four cats. And we have these very, very well-illustrated pictures of our cats, like kind of in portrait, hung over our fireplace. So if I was, if I was aware of this company, I think my wife and I are your target market.
Brian Parks: So two things, one it’s for sale if anyone wants to pick it up. It comes with inventory, a website, and an Etsy store. And if nothing else, we can still send you some t-shirts.
Brian Sierakowski: Perfect. So my purchasing options are either the entire business or one or two t-shirts?
Brian Parks: Correct. I’d probably give me the t-shirts for free, and probably a pretty sweet price on the business.
Brian Sierakowski: Alright, sweet, well maybe let’s chat after this. So you said “Bigfoot Capital” is in part pun. Are you willing to share the pun of the company?
Brian Parks: Not a great plan by any means, but yeah, actually prior to starting Bigfoot, we did a few of these financings to learn. The first one we did was actually an acquisition financing of one SAS company of another. We called it a “Sas-quisition” which then led to Sasquatch, which then led to Bigfoot. We’re out here in Colorado in the mountains, so maybe that was kind of a natural progression.
Brian Sierakowski: Cool. So zooming back out. I took it all the way back to the childhood days. So in college– I have to be careful the way that I speak and make sure it doesn’t sound like I’m condescending or anything like that– but you had a finance degree, studied finance in school?
Brian Parks: Yeah, traditional kind of business path.
Brian Sierakowski: Was that headed towards an MBA? Did you know the direction that you wanted to go?
Brian Parks: Yeah, I think I had my mind at one point thinking it would have been cool… the concept of international business. I like to travel. It’s a big world, right.
That would be pretty cool. I ultimately pursue that, or investment banking– “Maybe I want to go to wall street.” Which also could have been cool to do it for a couple of years and live in New York in my early twenties. But I didn’t take those paths. I actually landed at a regional bank in Memphis where I’m originally from.
And that was okay. I worked with good people and learned some stuff. But then after a couple of years, I was like, “No, this isn’t going to do it for me.” So that was kind of it with the MBA. As I mentioned earlier, after traveling, taking the GMAT and then literally never applying to a single program, (I think it’s only good for like five years), it expired and I got into companies.
But it’s definitely a bit different than the primary Baremetrics audience. I would think that the audience probably skews a bit more engineering and product centric, right? And I’m not a product guy, so to speak like minted as a product guy, starting as an engineer.
I’m a finance-into-ops guy, right? Who obviously is, you know, delved into product as I’ve kind of progressed in my startup experience.
Brian Sierakowski: One of the things I hear when I’m talking to people, especially as they’re maybe looking to join our business, it’s just this sort of feeling of boredom. What gave you the inspiration or what drove you to leave [the bank in Memphis] and try to find something else?
Brian Parks: Yeah. I mean, boredom is kind of it, right? It was a lack of intellectual stimulation, I suppose. And I was only there for two years right out of college. I learned some stuff from a credit analysis standpoint, like banks were making loans and I was in a department making loans to businesses.
It started with: learn what goes into making loans right in assessing lending opportunities. Then it was, “I guess you’ve kind of done that, Brian,” and I got put into a group basically with people that have been in banking for 15, 20 years. And I was like the 22, 23 year old supporting them.
They passed me some of their portfolios that they didn’t want, so I ended up with this portfolio of companies. It was like a sales role to go find more companies. And those companies in Memphis primarily were, I mean, they certainly weren’t tech companies. They were like wood pallet companies, traditional kinds of small businesses, grocery stores even.
So being in the corner office of some grocery store with like the 60 year old owner who owned, probably eight of them… I think he was literally smoking a cigarette and had a gold bracelet on.
And I’m in my suit, a 23 year old who looked like I was 16 and I was just like, “I don’t know about this.”
Brian Sierakowski: “I can help you with your money, sir, if you, if you need some help!”
Brian Parks: Right. And they’re like, “Where’s Phil and who the hell are you?” Phil had been a banker. So for me, I was still interested in finance certainly, but that wasn’t the level of finance I was interested in.
I was fortunate enough to find a position out here in a different form of finance, mergers and acquisitions, that was much more rigorous. It was totally different. The caliber of people to a degree were different in their own career progression.
That was interesting to me and moving to Denver was cool. I didn’t know anyone, and it was just a new adventure. And once I learned a lot within investment banking and I understood what that was going to look like, which can be highly lucrative. But to me that wasn’t the primary motivator– money.
Once you’ve done it, you’ve kind of done it, right? That deal is like that deal like that deal. And you do this and that to run it through the process. Now, you could argue that within Bigfoot, there is some similarity, but in terms of lending and financing and understanding how that works and doing it over and over and over again, but we still get to look at a lot of companies.
We still get to grow our business alongside those companies.
Which is just kind of different than being in something more cemented in a traditional [investment company].
Brian Sierakowski: That’s interesting. What do you think the difference is between the type of job role that you would categorize as, “Oh, this is just like a boring hamster wheel” versus “This is like a well run operation and we have processes.”
Is it a matter of motivation at that time potentially?
Brian Parks: Right. I mean, it comes down to multiple things. And I’ve only got my own views and my own biases. But I guess it’s what motivates you and what you can tolerate.
Can you be a cog and part of something bigger, and maybe get paid well to be that cog, but not have that much agency potentially? Or have a lot standing in the way of that agency? Does that matter to you? Or are you totally fine with that? I think for me, that does matter to me.
I do like to have agency, I do like to be creative. I do like to be able to, even when we have a process, create on process, iterate on process, determine when we need process, determine when we productize process, right? So, yeah. I think those types of exercises, for me at least, have been achieved through kind of early stage endeavors.
Not that you can’t do that in larger organizations, if you figure out how to navigate that. And if the culture is accepting of that.
Brian Sierakowski: So you went from small business banking, it kind of almost sounds like a relationship banking-type world. And then you moved into the M and A investment banking world. It sounds like there was a bit of a gear shift that happened between those two.
Brian Parks: Yeah, there definitely was. And, you know, it certainly was from the intensity of the work, the expectations, even kind of the caliber of the people. Coming up that curve was definitely a thing. I was fortunate to have some mentorship, you know, because I didn’t have the pedigree necessarily on paper.
You could make the argument that I didn’t even belong there possibly at times. That firm out in Denver, which is a small firm, it’s not wall street investment banking, but a lot of those people had come from wall street banks and had different experience than I had.
There was some proving and certainly learning, like, I didn’t even really know how to use Excel at that point. Certainly not to any high caliber, you know, so there was a lot of learning, but it was great. And so that was kind of a challenge to take that on.
You mentioned the word relationship. I think it does kind of parlay into Bigfoot and our view on relationships. I like relationships. I think that one of the good things about traditional banking is you do build relationships, over the medium to long-term. Investment banking– that’s a lot more transactional, right? You are working exclusively on a transaction. You’ve got a company, it’s whatever, 20 million in revenue, and they want to sell the thing for a hundred million. That’s your job. Help them sell it for a hundred million and you’re not doing anything else. And then once that happens, you’re onto the next one.
There is no tail there– literally a transaction over and over and over again. So Bigfoot does transactions, right? We fund companies. But then we, as a team, maintain that relationship. Which is great. For us, you know, moving money in and in and of itself in a transactional format is not interesting to me.
I think that manifests in the fact that, you know, we’re not out there to boil the ocean with some huge volume play just to, you know, move money, move money, move money. We’re here to partner with companies. We take that very seriously. We enjoy it.
We plug in and we run a much more concentrated portfolio. Call it 15 to 25 companies. Not 200.
Brian Sierakowski: Yeah, it’s an interesting thing, operating at scale. I think it’s a decision that a lot of entrepreneurs need to make: “Is this going to be a $7 a month product where I need to get a million people? Or am I going to charge $7,000 a month and have just like 10 customers, but I’m super excited about that.”
It sounds like you went through that process and you said like, “Well, I’d rather work with fewer companies, but you don’t want to be in an environment where you show up to the office one day and you’re like, wait, who is this? Who is this company? Like, what do they, what do they do? Who are these people?”
Brian Parks: Yeah. I think there, as we grow there will naturally some of that. As we grow, I don’t need to, I don’t need to know nor should I know every company. But someone on our team should know, right? And that person on our team should have an agency, not buried beneath me and layers They should have support from me and us institutionally, that’s the ethos of relationships.
We say “We’re in the boat, not on the cap table.” People may be like, “What the hell does that mean?” It means we’re in the boat, right? We’re not on your board. We don’t buy your equity. You don’t sell it to us and we don’t come onto your board. We’re not equity investors, but we’re also not just lending you money and you’re not hearing from us at all. And if we didn’t think we could bring any value from our experiences and our broader network, then maybe you shouldn’t hear from us, right?
But, you know, given what we’ve done over the years across our team and across different types of businesses and operational capacities, we’ve got multiple investment bankers and private equity folks on our team as well.
We bring a nice breadth of experience that oftentimes is lacking in earlier stage companies that may be more engineering or product focused or even sales focused. They may lack that kind of broader operational experience. And if they don’t and they’ve got that great team and a great board and advisors, like maybe our role is lessened there.
Brian Sierakowski: Interesting. And was that operational stance informed by being in the M and A world– a fiercely, fiercely transactional world? Or did you make a decision at that point of when you were ready to move on from there?
Brian Parks: I wanted to be a practitioner basically. And for people who have joined our team– it’s a leap of faith, right? In multiple ways. There’s a subset of people that may have been on that track that I was once on, and unfortunately I’m a bit older than they are, but they made that leap like I made. That means a lot to me because that’s not for everyone. Bigfoot may not have been their first leap out of that directly, but with a similar type of thing– “I’ve kind of done that and I want something else.”
I think they’re energized by that as well. Even within Bigfoot, there’s still some amorphous stuff here, things to work on and things to codify. What that means to me is a lot of projects that, you know, while you may have a fairly defined role in some capacity, there’s still a bunch of other stuff that you can cross-functionally own or participate in.
Brian Sierakowski: Cool. So we’ve brought it up to the M and A world. Tell me about moving out of there. Is this the point in the timeline where you were the founder of your first company?
Brian Parks: The first one I joined as employee one with the two co-founders.. I spent 18 months, a couple years there. Fast forward six months after my coding school experience and two months as rails developer. That was when I was approached by two guys who were entrepreneurs in their own right and didn’t have the time to start this new effort, Brandfolder.
It was basically pitched to me by them in a bar, back of a napkin type stuff. Smart, experienced guys across product and building companies. But, you know, they had their own things going on. So they basically said, “Hey, do you wanna do this?”
I was 30 at the time and said yeah. That was me being a first time CEO, not knowing what the hell I was doing in that seat, basically. That was a very formative experience, I would say for sure.
Now I’m a second time CEO at Bigfoot. Frankly, I’m much more in my lane. Like, did I know MarTech and digital asset management and building a product from nothing other than a back of the napkin pitch deck? No. Bigfoot has taken a lot of learnings from that, I hope. Even within this company, I am much more in my lane.
It’s finance in a large way while wrapping a growth oriented company around that core relationship driven finance offer.
Brian Sierakowski: That’s really cool. And it’s such a big leap of faith that those people put into you. I mean, offering a position like that of, “Hey, we have this really cool product that we think is gonna be a really great company, but we don’t have the bandwidth to run with it. Let’s, you know, let’s hand our baby over to someone else.”
What do you think they saw in you at that point in tim that said, “Brian’s our guy.” ?
Brian Parks: Man, you’d have to ask them. What do they think now? I mean, I maintain relationships and good relationships and even active relationships with those folks.
Maybe it was just kind of ambition, hunger. One of the guys was a kind of quasi-advisor to the company where I was employee one. So that’s how I actually met him. I think he was intrigued by the fact that I left that company and pursued something, which was that code school and saying, “Hey, here’s why I’m doing this.”
Given some of the things I had experienced at that previous company where I, you know, didn’t run product, didn’t touch product, saw some decisions that were made that maybe I wouldn’t would not have made if I were in that seat. So I think that was just kind of, “Hey, here’s this guy who, you know, has some attributes that maybe we like.”
Brian Sierakowski: How long did you know that individual before they said “Hey, come run my company for me” ?
Brian Parks: Six months, maybe up to a year.
Brian Sierakowski: Okay, so not that long. It wasn’t like they followed you for like a five-year trajectory, but you didn’t meet in the bar.
Brian parks: No, it wasn’t quite that quick. Although I may have met Chris, the other guy, that day. I don’t remember if I had met Chris prior to that, but yeah. Chris was involved with companies that I was familiar with here in Denver. But no, I had never worked with either of those guys directly in any capacity.
Brain Sierakowski: I’d love to hear more about your thought process in joining a coding boot camp. It seems like that’s a step that not very many people do. I’m always in the spot where people are asking me like, “Where do I find a technical co-founder? How do I communicate with my development team?” It sounds like you just said, “Well, I’ll just learn the skills. I’ll just build that knowledge base into myself and then that’s going to be a huge asset to me moving forward.”
Brian Parks: I think that was the basic thought process. Like, if I think I’m going to start a software company at some point (which I ultimately ended up doing), I think that could be a net benefit.
I probably discounted how hard software development actually is. I was a spreadsheet jockey who understood logic– [software development] can’t be much harder than that. It is. It was forward looking of like, I’m not going to be the engineer, but if I could MVP a product, that would be cool. If I could contribute to a code base, that would be cool. If I can interact with developers beyond just being a business guy who they may be inherently skeptical of, that’s good.
I can still get hoodwinked, right? I’m not technical enough to know a lot of things. But one of the things I saw at that company I was at previously prior to going to the bootcamp was just the spend of a lot of money that was not necessary on a product that was certainly over engineered.
And look, engineers will write code till the cows come home, if there’s budget for it, right? Some engineers. It was kind of that experience. And the other part was just really back to that kind of intellectual curiosity, right? I know a bunch of developers, what do they do?
It seems interesting. It’s really cool. They have the superpower, you know, can I learn that right? Can I get on Heroku? Can I spin up an app? Can I go through this tutorial? Can I, you know, learn recursion with all these things. So that was just interesting to me as well, in more of a hobbyist format.
Brian Sierakowski: Did that seem like a strange decision to make at the time?
Brian Parks: No no, it didn’t. I mean, it was kind of a new leap.. But I think I’m comfortable with those types of leaps and again, have the luxury to make them in terms of flexibility. Part of which may come from, I’m not a consumer of things.
I don’t go out and buy a bunch of stuff, that gives you some ability to do those types of things. So, no, I mean, that was pretty natural to me. I think what was kind of weird was, you know, it started, I had started dating someone who’s now my wife, and that was like the first summer we were together.
I’m like, oh, I’m moving to San Francisco. And yeah. And I did that. And then the next summer, it was like, oh, I’m moving to Boulder. You know, just from Denver, but up the road to go through Techstars. She’s a teacher, so she has the summers off. But big props to her for she’s been with me basically through this whole path, which is non-traditional.
Brian Sierakowski: I’ve listened to a lot, if not all, of the episodes of this podcast hosted by Josh. And one theme that I’ve seen over and over again is a partner or somebody in the founder’s life that is sort of that aspect of stability and maybe sanity. And support, too.
I don’t know what the stats are, but I think most people don’t move. And you had this person in your life who said, “Well, we’re going to move to San Francisco and then next summer we’re going to move to Colorado.” And then, “Now we’re starting a company.”
Brian Parks: Definitely. And she, back to me having a horrible memory, I do remember our first date, but, you know, apparently I was like, “Yeah, I’m gonna start a company.”So I think that was at least prefaced to a degree.
There was a warning. So I think, you know, she understands kind of at this point, certainly 10 years in, how I’m wired. Which is helpful. Not to say that she’s not like, “Man, could you have just stayed in investment banking and be making a lot more money?” I guess I could have, but not really.
Brian Sierakowski: What was the company that you started, the one that you went to Techstars for?
Brian Parks: Yes, it was. It was ultimately a very good outcome for that company. That company ended up getting acquired last year by a publicly traded company. It kinda went through the whole, you know. It took close to 10 years.
No overnight success with multiple people involved and all of it. Like the whole thing is building a company over, I guess it was really nine years, eight, nine years to that outcome. Which at certain points along the line, looked like, you know, it wasn’t cemented in stone, but that would be the outcome.
A lot of effort and commitment from a lot of people was put into that to make that happen.
And, you know, with that company, it was done in the right way. They raised some equity, certainly, but not inordinate amounts of equity that made a sizable acquisition that’s not a unicorn. The viable number one and two benefit to many people to include is the employees’ material benefit. I think my investment banking experience informs that, you know, we were doing 50 to $200 million acquisitions. Those are big numbers, right.
But those are big numbers that don’t get much play within tech. And oftentimes get turned off because of the over capitalization of companies that put them on a certain path. At Bigfoot, we like to think that we increase optionality. We still put in growth capital, still help companies grow, but our money doesn’t mean that you have to 10X your valuation to be successful. That universe of acquisitions of that scale, or even say, twenty-five million are viable and can be of great benefit to founders, and even the team and shareholders.
So that’s where we play. Those are the types of outcomes that we have seen within our portfolio and that we hope to continue to see, and that just worked out really well. Then it becomes personal like, man Mike, you know, CEO or whomever… That just happened. And that’s awesome, you know, and we got paid back and made a little bit of money and that’s totally cool, too and works for our model.
Brian Sierakowski: When you were running that business, what was the process of growing it? How did you go to market? What lessons did you learn? For people who might be listening and thinking they would want to do Techstars or whatever accelerator, or who just want to start a business or grow a business.
What did you learn going through that process that got you to that awesome 10 year success story?
Brian Parks: Yeah. I mean, man, a lot of stuff. And I wrote about this years and years and years ago, and it’s still out there on Medium, it’s a three-part series of learnings as a first time CEO.
It was a cathartic exercise coming out of that, for sure. Let’s do a quick path. We raised money– those two guys who I mentioned had a nice network and it had some success. I wouldn’t have been able to raise the amount of money we raised on my own. And we’ve raised that, which enabled us to do some things like bring on my partner, Paul, who I skied with yesterday, one of my best friends out here. He joined basically as technical co-founder and, you know, have some resources to put into some stuff. You know, we actually entered Techstars pre-product. And we raised that money pre-product, which for me personally, it was a learning experience of like, “I would never do that again.”
I need data, and I need real traction to be able to go out and present that to someone, rather than just vision. That’s just me. So we raised it early and when you raise it, the clock is ticking. Whether you think it is, or it isn’t.
So we were in our Techstars cohort, we were building a product. We released it in beta. You know, one of the benefits, I guess, of those types of programs is you can get a lot of initial adoption from the network. But for us that was like, “Oh, it’s free. Okay. Use this thing.” And then it was like, “What is this thing? Is it a press kit? Is it slightly better than Dropbox?”
Basically, you can put logos, images, digital marketing, or marketing assets into a place that lives in the cloud that can represent it visually that can have permissioning that can ultimately down the road, track stuff, and analytics. I mean, it became a pretty robust product engineered and presented quite simply, which is one of its core benefits. It wasn’t some behemoth.
And it was freemium and it was like, “Well, does a 10 person company need this? Can’t they just put their two logos in Dropbox? Are we their press kit?” And there were all these other press kit plugins. We weren’t seeing freemium conversions.
That’s not going to work. You know, the clock is ticking. We’re spending money. That’s not generating revenue. Who do we sell this to? And I think the first sale we made.. It was like a$3,000 sale to a healthcare system. And I was like, huh, interesting.
And then we sold to a swimwear company who I think remains a customer to this day. Just kind of these random customers. And then I was like, “Do they look alike? How do we price this thing?” They’re going to pay that they’re going to pay that, you know, it’s just learning through that experience of actually getting paying customers.
Do we hire an AED? Is he gonna like bang the phones? Are we going through agencies? Like, is that a channel? Do they care? You know, just all that stuff of taking it to market and trying to learn. And so that was where we were. By the time I left, I wouldn’t say we’d found product market fit. It probably took a couple of few years and, you know, some things happened within the business from a capital standpoint that enabled it to survive and have that time. You know, there’s luck and things that happen and companies along the way that… you know. Cause it could have died probably like many do, but it didn’t. It gave that runway to continue learning, getting new customers and to continue getting some sales experience in there that could put forth some sales strategies. Like how you guys do it Xenon, right? Like bringing some of that stuff into a company
In Brandfolder’s s instance, I was bringing some people into that company who had done those functions at other companies that had scaled up. So probably lots of other learnings in there. Raising money too early, adjusting from premium to actually having sell, [figuring out] who do we sell it to, what do they look like, what’s going on in Intercom? What kind of engagement are we getting? You know, all that, all that stuff.
Brian Sierakowski: Do you think having the running clock was beneficial?
Brian Parks: I don’t know, honestly. I’m sure it had some net benefit, for sure, in terms of additional different types of motivation and urgency. But I think that would have been there anyway.
That kind of side of that can just be anxiety and paralysis to a degree. I remember sitting in my office at like midnight by myself and I stumbled across, you know, Ben Horowitz’s “The Struggle” essay, which is part of his broader book that he wrote “The Hard Thing About Hard Things”- great book.
And I was just like, “Yeah, this is me right now.” Dark office, midnight, searching, grasping with no answers. With the clock ticking, with other people’s money in the business, with employees in the business…all those things. Bigfoot is taking a very different path.
Brian Sierakowski: I feel like getting to that ideal customer profile, that sales profile of a customer is like the holy grail of figuring out your go to market strategy. And it sounds like the company got there. It took some time, but it got there.
What was the process? How did you figure that out? How did you get to something where it was either? Was it written down? How did you actually capture it? How did you get to something that like, “Okay, cool. This is what we’re going for. Just find a bunch of things that are in this shape and configuration, and we can scale the business.”
Brian Parks: Unfortunately, I don’t think I can be the one to claim credit for that. I would say I was gone by that point, honestly. There was still a search for product market fit with the clock ticking, both of those two things in conjunction led to me not being there anymore. So again, a bigger story there, but hopefully I had planted some seeds with the learnings that we had done and the initial customers that we had been able to acquire.
Fast forward to Bigfoot. We’re four years in, and we’re still refining our ICP. It’s an ongoing process, of course. We do that alongside our customers, if you will, portfolio companies, as we call it. They’re doing that as well, because it evolves, right? Some are doing it to different degrees, but I do think the experience that we have still doing that, and having had to do it before. We’re peers in that regard to the companies we work with.
We’re not sitting here on a high knowing everything. And frankly, we haven’t been doing it for 30-40 years.
Brian Sierakowski: Well, it seems like a real challenge for your business. I think a lot of entrepreneurs are in the spot where they say something like, “Well, you know, my product is for everybody. Anybody can use this.”
Sometimes there’s some truth to that. But most of the time there is a target audience that is much more suitable for your product. However, for you, the ultimate product is money. And boy, if there is a universal product in the universe, like money, access to capital has got to be it.
So what’s your thought process on getting to that ICP? How are you modifying and adjusting over time?
Brian Parks: Yeah. I mean, a lot of it comes down to the right… there’s a certain form of capital, right? That may or may not make sense at a certain point in a company, holistically speaking. And then there’s the whole comfort aspect of founders and execs and their own equity holders. Equity is kind of a known thing, even if it’s not.The innards of it oftentimes are not known. Angel money, venture money, debt. A lot of people have never borrowed money for a business before. There may be fear there, there may be misunderstanding. So a lot of it’s about education and representation of what format makes sense, and what to look out for.
Like I said, we want to increase optionality. Things that would not increase optionality is putting way too much debt on your company and sucking all the cash out and fowling up something downstream. We have our own sensitivities that we look to have the people who would work with sensitivities and help them understand why they should be sensitive to it.
We’re very transparent about that. We are the experts, the finance experts in the room. We do this all day, every day. We look to use that, not from an information asymmetry standpoint, or to our advantage, but more from a consultative standpoint [to help] people understand this tool and how it can be used in isolation, [how it can be used if they] never sell equity, or in conjunction. Or, how it can be used now, and then that can happen then. There is a progression in capital as companies grow and mature. I think that concept’s just one that’s important to understand.
We do a decent amount of education. Even then we may say, “Okay, maybe we need to find the already educated.” Because maybe there’s too much friction and changing that psychology or getting them to listen and care and understand. If we’re able to, maybe there’s too much friction there, I don’t know.
Who are they already educated? Maybe they have borrowed before. Maybe they didn’t, maybe they’ve worked in other industries other than tech where this is more of a thing and they get it. Maybe they sold equity before and had a painful experience.
It’s figuring that out, and then it’s aligning- where are you trying to go? What are you trying to do? Is that viable? Are you gonna raise a $20 million Series A but you’re growing it 1% a month? It’s like, “Okay, I don’t know if that’s going to be achievable.” Is there another path?
It’s just digging in and I think so you can’t really do that in a transactional format. Well, it’s a plug and play algorithmically driven thing. It is more of a, “We pair the quantitative aspect of it, which we look to do very efficiently, let’s say through data and models” and all that good stuff.
But then there’s the qualitative aspect of the more holistic story of what the founders and their supporters are really trying to do. And can we align and plugin and support them in that?
Brian Sierakowski: Yeah, seems like that’s the big challenge.
Brian Parks: That’s the relationship. That’s the personal part of it, right?
Brian Sierakowski: That makes complete sense.
Brian Parks: And then that even becomes qualifying. Like, if you can’t be bothered to take time with that, or you’re just not interested, I get it. There’s other options for you. I don’t want to be providing a product service experience to someone who doesn’t value it… looks at me transactionally.
Brian Sierakowski: Absolutely. They will be some people [for whom] this is kind of a relatively novel concept or like maybe not going to get it. But it sounds like there’s this common thing that happens from a sales, or early onboarding standpoint where there are potential customers who are looking to achieve a goal, but they want to do it in a certain way.
Sometimes it can be challenging to convince them. The best customers are the ones that are like, well, “Here’s my goal. You tell me how you think we can get there.” And if they like it, they’ll go with you.
How successful have you been in bringing the [customers who are] like “I want to raise $20 million, but the fundamentals of the business are….” That’s a task, not an objective that they’re trying to get to.
How have you been successful in bringing people from the task orientation to the goal orientation? Is that something that’s difficult to do in general?
Brian Parks: That’s a really good question. Hopefully we have been!
It just varies, right? A lot of it frankly comes down to our counterparties, the founders and their teams’ own experiences. [Including their] openness to that dialogue, which may come down to personality traits, as well. We don’t get psychographic with it, but there are certain types of people I think that we enjoy working with, right.
If they say, “We need more Nates,” if Nate’s a CEO that we’ve funded. Or more Cleanse, those are great. They get it, we align with them. They’re receptive. What have you? And you know, a lot of this is sales cycles basically.
Things move really quick. Some things. Even talking to someone on and off for a couple of. And building trust. Also the concept of giving before getting. Techstars has a mantra of “Give first”, which I think is a good one. What can I give you? Can I model something out for you?
Can I write something that’s a benefit to you? Can I make some introduction? Those are the things that we do post investment, as we would call it, once we lend you money. But there’s no reason we shouldn’t do them within reason without crushing ourselves along the way prior to it.
Brian Sierakowski: You’ve cultivated this focus on the relationship aspect, which may have started all the way back in your SMB banking days. And that makes so much sense. It’s almost like a qualifier for your potential customers. If they’re not willing to engage in the relationship side, then it’s probably not the fit.
I said a little bit earlier that money is your product that you’re selling, but it sounds like the relationship is actually the product and money is like the by-product of, knowing the customers, understanding the portfolio companies, understanding what they need and where they’re going.
And from your experience, trying to make sure that they don’t hastily make a decision where three, five, seven years down the road, they’re like, “Oh man, I really wish we didn’t do that.”
Brian Parks: I think that’s broadly accurate, right? Money is a tool to achieve things, objectives. And there’s tactics that get deployed to achieve those objectives. Should we provide you money without having some understanding of what those things are? And if we’re the right group to not only provide you the money, but try to help you get there? Probably not.
I just think it’s so core that it’s just not that interesting to me to move money around in isolation and not have any other involvement with the folks we’re doing that with.
Brian Sierakowski: Totally. I think this is a trend. I see that with a lot of businesses– even if you think that you’re in this sort of transactional kind of self-serve space, there’s always so much room to actually work with your customers and understand what they’re trying to do.
Especially if you’re just getting started, there’s almost always something that you can do manually. People don’t want to be a services company, but there’s almost always something that’s like, well, you’re not getting paid for it actually, so don’t worry about being a services company. It’s such a good mentality of, “Let’s kind of do as much of what we would do for the potential customer after they sign up. Let’s do as much of that as we can upfront.” It seems like that’s like a great pattern to 1. make sure that you get the right customers in the door but also 2. build that relationship and build that trust.
People should be able to listen to this and [ask the question] like, “How can we emphasize relationships more in our product?” Especially if that’s not something that they thought about or not something that they do at all right now.
Brian Parks: Yeah, totally. [This doesn’t happen] on every financing we do, but on maybe the larger ones where it’s more applicable, we’re going to talk with other investors in the mix who may or may not be on the board, but have put money on the company. If there are certain larger customers, you know, we’re going to even have those conversations as part of our diligence.
Which hopefully doesn’t scare people, but those are like some of my favorite conversations to have. Likewise, in turn, anyone should speak to companies we’ve worked with, founders we’ve worked with, whoever, right. You can hear it from me at nauseum, but get it from a different source.
Brain Sierakowski: Cool. Well, I know I’ve been talking to you for a while now, pulling a lot of great information out, but I wanted to provide some time here at the end.
I’d love to hear just kind of like the current state of affairs at Bigfoot. I know you just had a big press release come out. So I don’t know if you want to speak to that at all, or what’s going on.
We also have a little bit of space at the end here for the pitch of: Why would I get money from people that don’t actually care about me and don’t know what’s right for me? If you have the pitch, I’d love to get that out there too. Also, can you let people know how to contact you.
Brian Parks: Sure. Before that, this has been great. You’re very good at this, the questions have been awesome.
So we just did our first press release. For me it was a bit uncomfortable, I’m just not “toot your horn” type of guy, I guess, but it makes sense.
And it was kind of a big milestone for us. So yeah, we just closed on a sizable financing for us, with an institution we feel really good about and some other folks involved as well that gives us a good amount or more capital to go out and kind of keep doing the same thing. We’ll still continue to improve and learn of course, but keep providing meaningful amounts of capital commitments to companies in a non-dilutive format.
And I say, companies fairly broadly. B2B software companies are not even exclusively SAS, you know? For some marketplace companies, not every company should be subscription necessarily. ? It’s just one business model to deploy. But companies that are generally a million and a half in, we’ll say run rate, up to 10 million, and putting around 250,000 up to two and a half million. So, fairly broad into those types of companies to help them execute on the growth plan, and/or get to that next event in their company. This could be an equity raise, sale of the business, or them deciding to do neither of those things with cash flowing and growing. And maybe we put more money in those types of situations and continue doing that. Basically, in a kind of very focused, relationship-driven, efficient format. That’s what we’re doing.
Brian Sierakowski: Cool, that’s awesome. So for people who are interested in…
Brian Parks: Oh! How do people find me, right. We’re at bigfootcap.com. It’s a very slim down website meant to convert. Converting for us is “Hey, let’s talk.” You can share some brand information if you want, but you go to bigfootcap.com and basically click a button and there we are.
There’s Calendly and let’s, let’s have a chat. On our blog, we write a bunch of stuff around capital, operations and the like. We’re pretty easy to find. I don’t really spend much time on Twitter anymore. We’re active on LinkedIn.
Brian Sierakowski: That’s great. Maybe people who are curious and want to dip their toe in the water can check out the blog and maybe that’ll help provide a little bit more context.
I’m just curious, for anybody I know, and I’m sure you understand too, from being a founder- you never know if you you want to invest your time into going down a specific path.
Just curious, what is that? If somebody wanted to reach out and wanted to have that, like initial chat, like how do those conversations go? Like what do you talk about to maybe take a little bit of the uncertainty out of that process?
Brian Parks: Our process, just for what it’s worth, is generally around five weeks from the first call to a funding. It’s not overnight, but it’s also not going to drag you out. I mean, a big part of what we’re doing here is to make it as transparent as possible, and get the information we need as quickly as possible to assess viability.
So in that first call, which may be 20, 30 minutes, it’s “Hey, let’s try to get our heads around the high-level fundamentals. Then you can share information after that call if it makes sense”, while also understanding the story and sharing whatever about us.
It’s pretty casual. I think we’re pretty casual in nature, just holistically, but trying to determine viability. For us, it’s at a very high level. We don’t operate outside of the us. We don’t do anything that doesn’t have a software product component to it, which could even be tech enabled services.
And then, if you’re not at a million and a half in revenue, which I understand a lot of companies aren’t, we’re not viable now. Doesn’t mean we couldn’t be viable in six to eight months as you’re growing to it. It’s always worthwhile to have the chat. Also a big part of what we do is, you know, if we say it’s not a fit for us, we better be able to point you in some productive area or way. Which we always are generally able to do. We just don’t want people wasting time. I’ve wasted time and know a bunch of people that have wasted time chasing kept chasing capital that’s not viable. It may not be viable for very good reasons, but it doesn’t mean people don’t waste a lot of time and come out the other end feeling like crap, honestly. And feeling rejected. So we don’t want that happening to you.
Brian Sierakowski: Yeah. It sounds like people who might be interested can book some time, 20, 30 minutes, have your business stats in front of you…And then it sounds like by the end of that first 30 minutes, [Bigfoot] should know “Is this something that we should pursue now? Is this something for down the road?” And it sounds like it’s pretty likely that even if it’s not a fit now or ever that they’re going to walk away with at least some useful analysis, or maybe you can introduce them to somebody else. It almost sounds like you work really hard to make sure that that’s not a waste of time to talk to somebody.
Brian Parks: Yeah, totally. We’re very aggressive, I suppose, at the top of our own funnel.
Brian Sierakowski: Aggressively helpful!
Brian Parks: Definitely helpful, and mutually qualifying. It’s like, “Hey, look, let’s just be as efficient as we can.” Even with Baremetrics, we did an email blast last month with the offer like, “Hey, give us read only to your Baremetrics account and run the data. If we give them the data, we can move very efficiently from a quantitative standpoint. So that’s even one avenue. We’re always happy to receive information and digest it quickly.
Brian Sierakowski: That’s great. Well, Brian, thanks so much for making the time. I really appreciate this. This has been awesome. I think everybody wants to hear from people who are investing money and so many of those seem mysterious, like a mysterious shadow figure. It’s really cool to share your story, go through the facts that you’ve founded companies, you’ve run companies. You started like most people have like, “Hey, I’m not quite sure what direction I’m going to go.”
And there wasn’t a straight path. So I think this is going to be really helpful for a lot of people who are starting businesses and running businesses. It sounds like people who are interested in this should reach out. Sounds like more likely than not that’s going to be a good use of their time.
Brian Parks: Yeah, this has been awesome. And I remain an ardent supporter of Baremetrics and all that you guys do.
Brian Sierakowski: I appreciate that. Thanks so much, Brian.
That was our conversation with Brian Parks, founder of Bigfoot capital. If you’re looking for a growth oriented loan, you know where to go.
If it’s business analytics and growth tools you’re looking for, check us out at Baremetrics.com. We hope you enjoyed the episode, and invite you to check out our other Founder Chats. If you’re able to share with a friend or leave a review, it goes a long way. Thanks for listening!