A Conversation with Todd Woloson

Posted on | July 1, 2010 | 3 Comments

Todd Woloson is a Boulder based serial entrepreneur with a unique perspective on the relationship between venture capitalists and the companies in which they invest.

After graduating from Denver University Law School in 1994, Todd was a founding partner at Canyon Capital, an early stage venture fund located in Denver.   After working with several start-ups in the internet and technology spaces, Todd left Canyon Capital in 2002 to form IZZE Beverage Company, where he developed a line of all-natural sparkling fruit juices.   Todd served as President and CEO of IZZE until its sale to PepsiCo in 2006.

Following the sale of IZZE, Todd elected to go back into venture capital and became a Managing Director of Greenmont Capital Partners, an investment fund focusing on early-stage companies in the Lifestyles of Health and Sustainability (“LOHAS”) market.

Not only have we co-invested with Todd when he was at Canyon Capital, but we have invested in Todd when he was the CEO of IZZE.  As a result, I have seen Todd in several different roles, and have a lot of respect for his skills as both an investor and operator.  In addition, I grew up with Todd, and we have been friends since our high school days (those stories will have to be the subject of a different post.)

Recently, I sat down with Todd over a burrito and asked him some questions about IZZE, and his perspective on the VC/entrepreneur relationship. 

                              _____________________

Q:  What caused you to make the move from investor to entrepreneur?

TW:  It was a combination of fear (the internet bubble had burst along with a certain amount of my confidence), an interest in the Natural Products industry (interesting people making a difference along with its importance to the town of Boulder), and a desire to get better operational experience (I had some success as an entrepreneur, but not in building an organization).  Finally, it was a chance to put into practice a number of things I had picked up from my exposure to successful entrepreneurs while at Canyon Capital.

Q:  What surprised you the most about life as the CEO of a start-up?

TW:  It gave me a much clearer picture of the physics of plumbing. It really does flow downhill. It also gave me a much deeper appreciation of organizational inertia. There are far more moving parts to a success than I ever appreciated. The day-to-day is always more complicated than it appears at the board level. 

Q:  If you were starting IZZE again, what would be the one thing you would do differently?

TW:  Most of the glaring mistakes I made were related to misjudging people. I would like to think I could have done better, but hiring employees and partnering in general is tricky.  I am sure I would make similar mistakes if we were staring again.  In addition, I would not have spent as much time worrying about where we wouldn’t sell IZZE, and more time just selling.  At the time, the four years we spent on IZZE seemed like an eternity.  In hindsight, it was quick and I am sure we could have gotten bigger with a more targeted sales approach.  Finally, I would have built out the management team earlier.  Recruiting experienced managers made my job so much easier, but we didn’t really get it right until the end.

Q:  What is the biggest lesson you learned from the IZZE experience?

TW:  It’s hard to build a company, even when almost everything goes right.

Q:  What made IZZE a success?

TW:  Luck and timing, and an understanding that when you have the first two, bet the ranch.

Q:  What advice do you give entrepreneurs who are just getting started?

TW:  Stress test your idea over and over before taking other people’s money.  Once you take capital, you are in and cannot walk away even if you want to.  Also, for young entrepreneurs, I usually suggest getting a job in their industry before starting a company.  It provides key perspective, access to potential mentors, and increases their chances of eventually attracting capital.

Q:  After the success of IZZE, why the transition back to investor?

TW:  I love venture capital.  It provides the opportunity to get involved with a variety of businesses at a strategic level and work with very smart people. 

Q:   How has your investment criteria changed based on your experience at IZZE?

TW:  As you might suspect, I have more of an emphasis on management.  It is essential that management understands how to handle adversity (it always comes) and can adapt to it.  Any good strategy always has a back-up plan.

Q:  What is the one quality in a CEO that you need to see as an investor?

TW:  Not really a quality, more of a character flaw. Specifically, the ability to be simultaneously optimistic and fearful, as well as confident and humble.  It will drive your spouse nuts, but it’s a key ingredient for entrepreneurial success.

Q:  What mistakes do you think VCs make in the way they interact with their portfolio companies?

TW:  They often don’t communicate how venture capital works. It is not for everyone and has many limitations.  However, for the entrepreneur who wants to build a company to an exit within a handful of years, venture capital is a great source.  If an entrepreneur wants to control the story and build a company to hand down to their children, venture capital is a nightmare. 

Q:   How would you describe the ideal relationship between VC and CEO?

TW:  Mutual respect. The CEO can’t do their job without capital, and the VC cannot produce a return for their limited partners without successful CEOs.

Q:  What would it take for you to be an operator again?

TW:  An idea with as much momentum as we had at IZZE.

Q:  What is the best thing about owning a farm?

TW:  Driving the tractor (by far).

Category: Venture Capital

Comments

3 Responses to “A Conversation with Todd Woloson”

  1. Mike
    July 1st, 2010 @ 2:59 pm

    Nice post. Let me know when you’re ready to start your own company and need a partner to help.

  2. Toby Murdock
    July 2nd, 2010 @ 5:52 am

    chris–it seems that that radio interview gave you the bug. you can’t get enough.

    i expect the next one to be a video interview. ;-)

  3. Lincoln McIlravy
    July 8th, 2010 @ 3:03 pm

    amen on the tractor priority.

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