Tahosa’s Summit: 6 Months [Series]

Tahosa CapitalI enjoy reading blog posts of entrepreneurs that chronicle the journey of starting and building a business. The ones I enjoy most are at times heart-breaking and at other times triumphant. The most memorable are always always authentic and introspective.

To my knowledge, no-one has ever done a blog series on the process of building a venture capital or growth equity firm. If that is right, I’d like to be the first. Building a world-class investment firm feels to me to be every bit as entrepreneurial, with all highs and lows, exuberance and trepidation, joy and fear, as any entrepreneurial endeavor. It feels like its worth writing about.

The Good

Six months into the process of building Tahosa Capital, I’m feeling lucky and inspired. I’ve had some remarkable things go my way. Namely, the firm was able to complete its first investment, a $7.2 million investment in Datavail Corporation.

It feels great to have completed a first investment in such a high-quality opportunity. I’m grateful for the investors who have backed me in this initial investment and I’m pleased to have been able to oversubscribe what was available to Tahosa in the financing. I honestly couldn’t have scripted the start better.

The Unexpected

Completing the Datavail investment is a real momentum builder. It proves the thesis that the firm can source and execute quality investments and, until such time as we raise a committed pool of capital, raise capital to finance quality opportunities. There aren’t many investors running around Colorado writing $7 million checks. All good right!

But, I’d be missing a really interesting insight if I didn’t also share an unexpected reaction I’ve had to completing the Datavail investment. This thing is real now. No more playing house. I now have investors to whom I have a fiduciary responsibility and I’m the only one who has that responsibility. That responsibility has heightened, not diminished the self-imposed pressure I’ve put on myself to make Tahosa a success. The option to fail fast is gone. I’m in this for the long-haul now.

While that is exactly what I wanted, and I’m fired up about it, the sense of pressure that comes with cutting off the fail-fast path is real. They say that you’re not really in the business until you’ve made your first investment. I get it!

the Mistakes

I’ve made some mistakes along the path. None are particularly consequential, but they are mistakes nonetheless. The biggest is that I chose a bad initial name of the firm and I had to change it. A big, bad private equity firm that spends more money on lawyers in a week than I’ll spend in a year didn’t like the name I had originally chosen. Their lawyers were kind enough to let me know about it.

What a pain… Change website, change logo, change email address, change business cards, etc. etc. Don’t forget all of your social media profiles,  and the legal names of the LLC’s you’ve set up. Oh, and you have to set up a new Google Apps account because you can’t change the name of your company in Google Apps.

But all of that was the easy part. The hard part… finding a name that works. I spent months sorting this out. How do all you startup companies come up with the name for your company? I feel your pain! It seems that in the investment world, every word that conjures up positive images that you would want to put in front of the word “Capital” or “Partners” is taken. All of them! Seriously, every single one!

I reverted to a history book for help. While reviewing a Colorado history book, I discovered that when Colorado was to receive territorial status that the House or Representatives voted to name the territory, Tahosa. The Senate had other ideas. Ultimately Congress chose the Spanish word for “the color red” for the new territory; Colorado.

Tahosa is a Ute Indian word that means “dwellers of the mountains”. For me, Tahosa conjures up images of people enduring great hardship to achieve great heights whether they be Native Americans settling the mountains of Colorado or entrepreneurs building successful companies. I love the fact that the name has Colorado (Tahosa Territory) roots and the entrepreneurial back-story. The gratifying part of this mistake is that I like the new name better than the old name!

The lesson learned. Do your homework on picking a name. Clear any conflicts. Hire an IP attorney to help you through the process and some good marketing people if you can afford them. Also, take your time so that you can be sure the name you choose is authentic to the persona you want your company to project.

What’s Next

I’ve resisted the urge to script too much of what happens with Tahosa Capital. I know where Tahosa stands today and the sense of purpose with which Tahosa launched is every bit as relevant to me as the day we launched.

For now, my daily work has come back to identifying high-quality growth investment opportunities in Tahosa’ Capital’s technology enabled services market segment. As that work progresses, I remain open-minded to the fact that there will be forks in the road that present themselves unexpectedly along the path and that the purpose with which Tahosa launched will guide the firm down the right path.

Tahosa’s Summit: 6 Months [Series]