20VC: Cotopaxi: From Selling $6M of Pool Tables to Scaling $150M in Revenues and Challenging Patagonia, Fundraising Lessons from 100+ Rejections & What Founders Do Not Understand About VC with Davis Smith, Founder @ Cotopaxi

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 15 December 2023

⏱️ 58 minutes

🔗️ Recording | iTunes | RSS

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Summary

Davis Smith is the Founder and Chairman of Cotopaxi, an outdoor brand with a humanitarian mission. The company has assisted over 4 million people living in poverty. The company has been profitable for the last 4 years and is expected to do $160M in revenue in 2023, up from $55M just two years before. In April 2023, Davis resigned after 10 years as CEO to lead a mission for his church in Brazil for three years. Davis is an EY Entrepreneur of the Year and was recognized as Utah’s Businessperson of the Year in 2022. He is an adventurer who has floated the Amazon on a self-made raft, kayaked from Cuba to Florida, and explored North Korea.

In Today's Episode with Davis Smith We Discuss:

1. From Selling $6M Worth of Pool Tables to the Amazon of Brazil to Founding Cotopaxi:

How did Davis scale a pool table business to $6M in revenue?
What were Davis' biggest takeaways from building the Amazon of Brazil, raising millions in VC funding and the business failing?
How did depression and 36 hours on a sofa lead to the a-ha moment for Cotopaxi?

2. The Billion Dollar Company, Rejected by 100 Investors:

How was the early fundraising journey for Davis with Cotopaxi? Why did so many investors say no?
What was the best VC meeting he has ever had? Why do women understand Cotopaxi better?
What does Davis believe are the biggest misalignments between VCs and Founders?
Why does Davis believe we need a new type of financial product to fund long term projects?
What are the biggest elements of fundraising that Davis believes founders do not understand?

3. Scaling Cotopaxi to $150M in Revenue:

What are Davis' biggest lessons on what works and what does not from scaling Cotopaxi to $150M in revenue?
Why did Davis not lay anyone off but decide everyone should take a pay cut instead? How did that go down?
Why does letting people leave work earlier lead to better talent wanting to join your company?
Why does Davis believe that you absolutely can build a huge business with balance in your life?

4. Life, Parenting, Marriage:

Why does Davis believe that so many entrepreneurs chase the wrong thing? What do they chase? What should they be chasing instead?
How does Davis analyze his relationship to money today? Does it make you happy?
What does great parenting mean to Davis? How has that changed over time?
How does marriage change when comparing pre-kids and post-kids?
Was Davis nervous about becoming a father for the first time at the age of 24?

Transcript

Click on a timestamp to play from that location

0:00.0	I want to build a brand that's not beholden to an investor. I actually went out and I tried to fundraise.
0:05.0	I pitched over 100 different investors, lots of family offices. And I told the story of this brand that was over 100 million in revenue. It had been profitable for four years. I thought I'm going to be able to go raise money from an investor that's committed to at least 10 years. That's what I'm looking for. It's like, I want someone that's committed for 10 years. I failed. It was painful. I don't think
0:24.3	most people understand it. from an investor that's committed to at least 10 years. That's what I'm looking for. It's like, I want some of this committed for 10 years. I failed. It was painful. I don't think most
0:24.5	people understand how hard it is. You will get rejected a lot. Welcome to 20 VC with me,
0:29.8	Harry Stebbings, and I absolutely love this entrepreneurial journey today. This is an entrepreneur
0:34.1	who starts off selling pool tables. He scales that business to $6 million a
0:39.8	year. He then launches the Challenger brand to Patagonia that is Codopaxi, and they have
0:45.4	scaled today to be one of the leading outdoor brands profitable for the last four years and
0:50.4	expected to do $160 million in revenue in 2023, up from $55 million just two years before.
0:57.6	But before we dive into the show today, there is no shortage of helpful AI tools out there.
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	...

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