Found In The Rockies

Natty Zola (Matchstick Ventures) \\ From Entrepreneur to Venture Capitalist

August 10, 2022 Les Craig Season 2 Episode 26
Found In The Rockies
Natty Zola (Matchstick Ventures) \\ From Entrepreneur to Venture Capitalist
Show Notes Transcript


In today’s episode, Natty Zola, who is a TechStars founder travel startup EverLater. He's the former managing director of TechStars Boulder and now is an investor and partner at Matchstick Ventures.

Here’s a closer look at the episode:

  • From Colorado to Maryland for a bad track team
  • Leaving Finance to develop Everlater
  • How travel inspired Everlater
  • The early help with Everlater and the “give first” mindset of Colorado
  • Access to capital in the early days
  • Getting acquired by MapQuest
  • Joining TechStars as the managing director
  • How Natty’s entrepreneur journey helped him succeed at TechStars
  • What Natty loves most about being an investor
  • The decision to leave TechStars and become a full time investor
  • The Matchstick investment strategy
  • Importance of collaborative investing
  • The things Natty looks for in an investment
  • Importance of diversity in founders
  • How companies can be attractive for Series A and coastal capital
  • Natty’s advice during these economic times


Natty’s LinkedIn: 

Natty’s Twitter: 

Matchstick website:  

Matchstick LinkedIn: 

Natty 00:00

Someone who's recently asking me, What do I love most about being an investor. And the thing I think I love the most is that you end up surrounding yourself with people who are inspired, who are ambitious and work super hard. And I think that that there's no greater gift for us than to be able to surround yourself day in day out with people who are those attributes.

Les 00:26

This is Found in the Rockies, a podcast about the startup ecosystem in the Rocky Mountain region, featuring the founders, funders, and contributors, and most importantly, the stories of what they're building. I'm Les Craig from Next Frontier Capital. And on today's episode, we have Natty Zola, who is a TechStars founder travel startup EverLater. He's the former managing director of TechStars Boulder and now is an investor and partner at Matchstick Ventures. Hey, Natty welcome to Found in the Rockies. 

Natty 00:58

Hey, thanks for having me. 

Les 00:59

Yeah, thanks for coming on the show today. We're super excited to talk to you about. I mean, you've done it all in the Rockies. You are a founder and a funder and you've been a contributor, you're still a contributor. You're always a contributor. But there's so much to talk about today. We're really excited to have you on the show.

Natty 01:15

Thanks. Excited to be here.

Les 01:18

Why don't you? Why don't you start out I'd love for you just kind of talk kind of the origin story. You know, where you where you grew up, and kind of how you got to get to where you are today?

Natty 01:29

Sure thing. Yeah. So I'm from the Rockies, born and raised in Boulder, Colorado, super lucky to be in such a great ecosystem. For my childhood I grew up in a family of teachers and social workers didn't have a ton of business experience or exposure growing up, went to school on the east coast at the University of Maryland. I went there for a few reasons. But the main ones were they had a good engineering program and a bad track team. And I wanted to run track in college, and I thought I wanted to do engineering, or architecture. And so I went out to the East Coast. I also didn't know many people on the East Coast, most of my family's from the Midwest and west coast. So I went out there, ended up with a degree in finance. And went worked at GE, in their financial management program out of college in the New York City area, which is great, left that after two years to do a round the world trip with my childhood best friend because we'd made some money for the first time in our lives and wanted to travel. So we did that. The recession of 2008 happened. And we basically the jobs that we thought we were going back to disappeared, and we realized at that point, we kind of were like doing jobs that really didn't fit our ethos. We were more builders and creators. And so we ended up moving back to Boulder because we could live in our parents' basements, teach ourselves how to code and start a company. So in 2008, we moved back to Boulder spent 12 months in our parents basements teaching ourselves how to code and started a company called Everlater, that company went through TechStars here in Boulder. So that was an amazing entry to the ecosystem here. We raised capital from within the ecosystem from Highway 12 ventures out of Idaho, and scaled that company with a lot of ups and downs, which we can talk about, but eventually sold it to AOL in 2012. And really, through that experience, fell in love with entrepreneurship feel like we had the masterclass of you know, total pivots, ups and downs, et cetera, worked at Mapquest out of Denver because they merged our software into MapQuest, which was owned by AOL ran consumer products from MapQuest, which is a whole nother story, which we could talk about, but eventually got a call from TechStars, who said they were looking for a new managing director for the accelerator and Boulder, which I had gone through and asked if I would apply, I realized this was my dream job, I got to I would get to work with early stage entrepreneurs and sort of learn how to invest, I ended up getting the job, which is amazing. And they're running the TechStars boulder accelerator for six years. And then I was working with all these founders, and they're saying, Natty you're super helpful, we appreciate all the connections and insights and experience, it'd be great if you could write a bigger check. So I teamed up with another colleague at TechStars Ryan brochure who's in Minneapolis, and joined up with him at Matchstick ventures. And so we are now on our third fund where we were raising capital to deploy into entrepreneurs in our region. So if we can talk about that as well, I left TechStars in 2020, and I'm full time on Matchstick since then, so that's the super quick version of of how I got here. So founder funder and contributor in the ecosystem.

Les 04:21

There it is. All right, this episode is a wrap. No, we got to peel back. There's some great stuff to peel back there. So I love I love the you you mentioned this kind of quickly. But you this was a childhood best friend that you and did you go did you guys go to school together just work together in Wall Street.

Natty 04:39

We went to elementary school together, but didn't go to middle school, high school or college together. But then we're both working in the New York area in finance. And we were friends throughout that whole journey, but I feel like like really kind of rekindled that friendship while working in New York together.He's also named Nathaniel. So we're both Nathaniel's. So, the reason why I go by Natty, he goes by knee If you were around Colorado in the 2008 to 2012 period, people would just call us the “Nateies”. Because it was like, they couldn't tell like remember who's natty who's Nate. And so, you know,

Les 05:15

Well, when you’re childhood best friends. It's like, you gotta you just gravitate. Oh, you're the same name as me. I guess we can be friends. Right, exactly. Very cool. And so what was what was it like going from, you know, an early, you know, successful career in finance to becoming a founder. I mean, that's quite a quite a leap to take and to come come home, right to come back to back to Boulder.

Natty 05:42

I think for us, we just realized that we were we wanted to create and build. And I think that what we, while we were really interested in finance, because I think it's just really fascinating how money moves about and how like capital finds opportunities. I think we just realized, like, we were kids from the Rockies from Colorado, and just wanted to build and create things. And so we had had this great travel experience, but had struggled to document and record and share it in the early social media days. And that was the problem, we ended up starting out solving, which was you have all these social networks. But when you go on a travel experience, you want to you want to retain those photos, those stories, those tweets those maps in within a wrapper, you still want them to go to your social networks, but you want to have a container around them. So you could remember that maybe even have a printed photo books. So we built all this software that enabled you to easily document a travel experience, which was solving our own problem from that round the world trip. And then connecting it into social networks, making a printed photo book, we did a bunch of really clever offline app, built some apps in early app days. And so we're really solving our own problem. And we want to build and create things for an industry that we loved. And so that's it was sort of out of, I don't know, wanting to create and build that sent us on the path to teach ourselves how to code and start a company. And it was nice to have that finance and business background to bring to it. But I will say that ironically, the biggest mistake we made in our entrepreneurial journey was not thinking about the business side soon enough. Because for us, the biggest challenge was here's two non technical entrepreneurs, we we over indexed on could we build product? Could we solve the engineering challenges, and didn't spend enough time really thinking about where's the business model here? And is this something customers really want, which is slightly embarrassing to admit from, you know, finance majors who had worked in, in finance, in finance in New York, but I found that as a common trait of entrepreneurs is you, you know, maybe you overcompensate for a weakness, which we thought was like product and engineering for us. And, and, frankly, we kind of wasted, you know, our first round of capital by not really figuring out is there a business model around this this product we were building,

Les 07:49

I've been there and done that as well, myself, so totally, totally empathize there. What um, I mean, it seems it seems fascinating to me to the timing of like, when you decided to move I mean, obviously, you're from Boulder. I imagine that had more to do with the decision to come back to Boulder than what was sort of going on at the time. But can you kind of take us back to 2008-2009? Like, what was boulder like? And because TechStars is pretty new, right? Like, take us back?

Natty 08:16

Yeah. Yeah, it was it was really out of necessity that we moved to Boulder because we didn't have any money. And we needed to code. And luckily, we had supportive parents who were welcomed us to live with them. I actually lived with my parents for the first two and a half years of my startup, which I recognize is certainly a privileged position to be in but also, you know big sacrifice you made when you're in your early to mid 20s. living with your parents, I did end up meeting my wife during that phase blesser bless her heart.

Les 08:45

She’d come over for dinner with the family.

Natty 08:51

She met the parents really early in our relationship. Yeah, it was really out of necessity. But it was also an amazing way to run a company like my family was involved in the journey, and they got to see us build and learn how to code and start to get to sales. And I think that was a really cool thing to have happen. But But your question around what was Colorado like, at that time in Boulder was, gosh, we were we were lucky. I mean, there was there was this emerging entrepreneurial ecosystem really around led by a lot of community community leaders, including TechStars, Foundry Group, Andrew Hyde, a bunch of these people who are just creating this very collaborative, very give first, which has become a very big motto for Colorado. And I think this whole region, give first centered mindset where there were people coming out of the woodwork helping us left and right expecting nothing in return. Which was just an incredible environment to build a company around, especially, you know, for first time entrepreneurs, there's so much you don't know. So being a being having this access to great folks who showed up every day to help advise us it could have it was everyone from TechStars in the Foundry Group helping us think about capital raising and capital formation to we were coding and Ruby there was this incredible room The community who basically like took us under their wing and taught us how to program and, you know, helped us make early hires and things like that, like it was just so collaborative. And I still think that's the case here in Colorado. And what I'm most proud of, I think of this ecosystem. And it really is the whole region, is that instead of competition, we collaborate, and we, and we, and we rise, these raise each other up. And there still is this give first mindset where if you ask anyone for help, I mean, within reason, you know, they're there to help you. And we wouldn't have been able to do it without that. And so that's actually, frankly, why I'm still invested in this ecosystem and want to be an investor, we only invest in companies in the Rockies and North regions of the US, because we like that ethos and think it's, you know, it resonates for us. And at the end of the day, we could deploy our capital anywhere, but we want to deploy it into an ethos and a community that we believe in. And that's the case.

Les 10:52

For sure. I'll tell you, it's one thing that we consistently hear on the podcast is how great you know, not only Colorado and the greater Colorado ecosystem is but but the Rockies in general. So I think that's very consistent. It's good to hear you say that. What, uh, what was it like, you know, coming out of TechStars? When you did just access to capital, like, what did you find it? I mean, you guys got funded, but what what was it like for you, along with everyone else kind of in your cohort?

Natty 11:23

Yeah. Well, the funny story here is SendGrid was in my cohort. And I always joke that if I had, if I was really as smart as I thought I was, I would have instantly shut down EverLater and joined SendGrid as the first employee, because that was the real rocket ship, but I wasn't that smart. In terms of access to capital, you know, it's changed a lot over the last 12 years. And that was a phase where there was sort of the early institutionalization of, of seed capital. And we, we were lucky, we didn't actually think we were going to raise money. But we met Mark Solon at highway 12 Ventures. And he was we just felt such resonance with him. He believed in our mission. And so we took capital because we wanted to work with him. And so we were really lucky to find an investor that we really resonated with, for many reasons. And so that's how we raised our capital. My my sense of the ecosystem at that time was it was really dominated by coastal firms. There was not a ton of seed capital you had, you had Bullet Time ventures, which was early TechStars, you had Foundry Group in the ecosystem, and a bunch of and maybe a few other firms access ventures, but there was not a ton of seed capital. And I think the challenge was the seed capital that was there was sort of uni dimensional in the sense that you would always get this question, Hey, Did Brad Feld invest from coastal investors, because they sort of had this impression that founder group was was cherry picking all the best deals in the region was like, signaling, right? Yeah, make signaling risk, which was not the case, they just happened to invest in some stuff here. And we're investing nationally. But that was the impression that's changed a ton now, where I remember being at Denver Startup Week, I think it was 2019. And we had this event where we had sort of a reverse pitch where VCs were pitching to startups. And there were 39 funds pitching to startups, we didn't expect this, we sort of expected that the first 15 minutes would be funds pitching to entrepreneurs, so many funds were there, they were all local funds, anywhere from 1 million in assets under management, probably up to 50 million. But I had this like realization that the big change that happened over the 10 years from 2008 to 2018, was that you had a ton of seed capital, local seed capital emerge in our regions. And I think that's one of the best scenarios you can have for a region because you need a lot of diverse investor perspectives, funding a lot of different things. So that it becomes a really vibrant entrepreneurial ecosystem, where the challenge in 2008 was there was just was not that many sources of capital. I'm not saying it's easy to raise money today. But it's your it probably is easier, and there certainly is more of it. And so that's one thing I'm really excited about for the region is that you have a ton of seed capital, we still tend to need to go to the coasts for series A and beyond. But that's also changing. Next Frontier is super active in that phase, which is great. But you know, it was it was back then I think it was just sort of harder, because there weren't that many funders.

Les 14:13

That makes sense. Yeah, absolutely. So you, you got it done. And we're able to kind of get you guys did it. Ever later you raised was a two rounds of funding two rounds. Yeah. Right. And then eventually, as you mentioned, got acquired by Mapquest. What was what was that like, take us take us on that ride a little further?

Natty 14:33

Yeah, we had we, we sort of had this relation, early relationship with Mapquest with the leadership team at Mapquest because one of our strategies as entrepreneurs was we wanted to be well known across our industry, we wanted everyone to say, hey, need Natty, those guys are onto something, or even if they aren't onto something like they're out and about and super known in the community and that helped us a lot through the acquisition process because we ended up with a situation where we had multiple I acquisition offers, which was really helpful. We ended up choosing to go with Mapquest because we really aligned with their vision, which was to turn around Mapquest from this core utility product to be more of a travel experiential product from not just are we going to get you from A to B, but we're going to layer in a bunch of interesting content and recommendations along the route. And was super fun was when we got into Mapquest the leadership team there, valued our insights and kind of gave us the keys to say, hey, let's, let's turn this around together. And I think it's a good lesson in how to do an acquisition Well, which was they really valued our technology, they valued our team, they valued our insights, and we together turned around Mapquest for a while we got it profitable for the first time in 14 years, we got we grew traffic for the first time in 15 years, we rebuilt products, we had this amazing culture shift. And so I had a great time there. And maybe that's just my mindset, which is kind of wherever I go, I'm going to have a good time and do my best and so we really loved it and are grateful to to AOL and Mapquest for for trusting us with with that experience.

Les 16:07

Yeah, gotta gotta savor the journey for sure. That's awesome. I you know, I was just thinking about this, as you're telling that story. Some of our younger listeners might not realize, well, first of all, AOL was like, the original way you connected to the internet. And and Mapquest was like, before there was iPhones or mobile, mobile anything. Mapquest was like how you got turn by turn directions via the internet like this, like the leader? Category, right? Yeah,

Natty 16:36

Yeah. I mean, people people still say they Mapquest it, I mean, it's a little bit generational divide there. But when we were there, they were printing something like 50 million maps a month, we're getting printed still, I mean, this is to 2012. So it was not as as it was as relevant, I would say, brand wise as competitors like Google. But the technology hadn't kept up. And that was a fun opportunity to come in and say, you know, how do we innovate in a space where maybe we're maybe we're the brand. We're a, we're a well known brand, but we don't have the same capabilities technologically and how do you turn around a product, which was a great experience.

Les 17:13

Yeah. I'm so glad you share that story. Because I think, you know, I know, since I've known you, I've known you, as you know, the the managing director of TechStars in Boulder. And I think it's always fun to share those stories of you know, how you got there. So thank you for doing that. So now tell us about I mean, you were you were with TechStars? For six years, right? I mean, that's, that's a, that's quite a run. Like, I loved it. Yeah. What, what are just some takeaways are just some growth areas for you during that six years, like, how did you how did you, you know, take full advantage of that, that awesome opportunity?

Natty 17:50

Yeah, well, I was so grateful to get the opportunity in the first place. Because I felt like, I wasn't sure that I was qualified for it. Frankly, like I had done the entrepreneurial thing. I had experienced TechStars, but my exit wasn't this huge home run. It was it was good. But it wasn't a huge home run. And I was I think I was 30, maybe when I when I got the job. And at that time, I was the young, one of the youngest. I think I was the youngest managing director they'd ever hired. And I was like, Oh, my God, you know, don't screw this up through my head, because it was just incredible ecosystem that was churning out incredible companies, had this incredible mentor network. And I really was was afraid of screwing it up, honestly, which is, you know, I feel I think how a lot of entrepreneurs feel, which is, you know, I don't know, especially taking on money, like don't screw it up. So I really kind of went into it initially from a mindset of fear, which quickly shifted for me to realize like how lucky I was to be in it, because I thought at that time, I had had great role models as investors, I thought I might be a good investor eventually. And this was my shot to like, give it a like, learn from some of the best and get to work with entrepreneurs. And so I just took full advantage of it. I worked my tail off for those six years, and had a ton of fun doing it. And I think what it taught me was that I am, I think I'm a good player, but I might be a better coach or supporter, which is why I love being in the investing role I'm in right now. Because I get to bring the founder experience I had as an entrepreneur and that roller coaster and marry it with what turned out at TechStars to be really high volume investing and getting to see a lot of companies like I invested in 64 companies over five and a half years, which is pretty high volume, looked at probably 10,000 companies over that period. So that's incredible. I mean, one of the best learning experiences you could ever have, and really like helped me feel confident taking on the level of capital we've taken on now at Matchstick to say, I think I know how to do this. I know I you know, I know I can help entrepreneurs that I really like proved myself which was most important. I think I know how to make good decisions as an investor at least I've done a bunch of it now. Let's see if I can do it at a bigger scale, which was the challenge for me at Matchstick now. 

Les 20:04

Yeah, amazing. Are there any sort of inspiring, you know, kind of founder stories or turnaround stories or any anything that sticks out from your I'm sure there's a lot and maybe it's an unfair question to ask. But I'd love if you have any stories that stick out of like, you know, just inspiration or turnaround or like sticking it through anything come to mind,

Natty 20:23

In terms of the entrepreneurs working? Work exactly. I mean, I can literally give you every single entrepreneur I've worked with, you know, has an inspiring story. I mean, you know, this, like, part of our job is we get to work with people who are just inspiring, you know, zooming to, like, overcome all the odds. And I think someone was recently asking me, What do I love most about being an investor. And the thing I think I love the most is that you end up surrounding yourself with people who are inspired, who are ambitious, and work super hard. And I think that that there's no greater gift for us than to be able to surround yourself day in day out with people who are those attributes. And I think that may be one of the biggest takeaways, for me from working at TechStars was, I want to surround myself with those people, that kind of talent, and that kind of motivation, and that kind of hustle every day. And that's what we get to do as as investors. And so maybe not a specific story, but that general, like the feeling I got from all the entrepreneurs that I got to work with is what motivated me to want to keep doing this, because they're the ones who inspire me to keep going. And and I just love surrounding myself with that energy. For sure.

Les 21:30

I totally, I feel feel very similar to that. That feeling. Yeah. What? What, what about the decision to actually, you know, Do do do the investor thing full time? And and I mean, you had been working with Ryan at Matchstick for a few years prior to that decision. But can you talk to us a little bit about that, that evolution?

Natty 21:52

Yeah, it was really tough decision to leave TechStars, because I love that experience. And I love that community in that team. But ultimately, we were raising more and more money at Matchstick. And I felt like the learning curve for me was slightly higher there. And, you know, could I raise institutional capital? Could I run a fund? Could we deploy and write bigger checks, could we build a brand and a franchise, a lot of that stuff was sort of done for me at TechStars. And I wanted to do all that and learn all of that and be great at all of that. And so it was kind of the next mountain for me to climb. And and, and so it was a tough decision to leave and put all of our chips into into Matchstick. It was also frankly, a time where I was doing two jobs more than full time running TechStars and Matchstick. I had two young kids at the time was so itchy and kids. Like kids were very young at that time. It was I don't know, I'm kind of wired to do a lot and work a lot like I love it. And so but but I wanted to make some tougher decisions and prioritize family as well. And maybe I think I've just wired this way, because I don't know that I've actually done that, to be honest. Like, I think I'm better at prioritizing my family. But largely a lot of the time that I put into TechStars. I've just now transitioned into Matchstick, because I love the entrepreneurs we work with, and I'm just kind of wired that way. But at least now I have sort of a singular focus on one entity and making it great. Where, you know, it's hard to do one thing, super, super great, you know, and I was doing two, and I think I was managing it, but at some point like I wanted to go all in on something. And that's what I did with Matchstick.

Les 23:34

It makes sense. And what remind me Matchstick, you're on your third fund now? Is that third fund just recently closed? That I think is that?

Natty 23:41

Yeah, close to July of last year? 2021. 


So about a year old? Yeah. Great. Well, tell tell us about the evolution of Matchstick to the current fund in terms of how the strategy has evolved. 

Natty 23:52

Yeah, so from fun one to today, a lot of there's some things that have stayed consistent, and some things that have changed. So the things that have stayed consistent is we've always been backing entrepreneurs in the Rockies and north regions of the US. We know there are great entrepreneurs everywhere. That's kind of was our thesis when but both my colleague text Matchstick Ryan, who's was also at TechStars with me, we've just always believed in backing entrepreneurs off the coast, we love the work ethic, the hustle underdog mentality. We feel like we have an advantage in terms of helping those companies. And frankly, we just, I don't know, more fun to fund stuff in our own backyards. So that has stayed consistent across funds. We've also always invested at pre seed or seed. So this is anywhere from idea to call it maybe 2 million in revenue. No, those are sort of moving goalposts throughout different cycles, what that actually means, but we're happy to invest early. So we've always done that. So geographic lens stage lens, and we've always done software. So we have not done hardware. We don't do mid devices. We don't do biotech, we don't do direct to consumer product companies. We've been very, very consistent around software. So those things have changed. What Is or sorry, had been the same things that have changed has been, we've increased the font size. So our first fund was 5 million that was sort of a proof of concept, then we went 30 million for fun too, and fund three is 55 million. So what's exciting about that is we're able to write bigger checks and deploy more money into companies, which we find is helpful. The thing that we want to be very careful about is one of our core values is really being collaborative with other funders in the in our markets. And so we feel like we're kind of at that stage where we can write a big enough check, but we don't have to write the whole round. And so we can be very collaborative. So while the fund size has changed, and our ability to write bigger checks has changed, we've tried to keep that collaborative mindset throughout.

Les 25:41

Do you find with your portfolio that because this is another theme that I think especially especially with some of the VCs that we've had on the podcast, a lot of them mentioned this, and I'm curious what your take, is it? Is it? Is it? Because is this strategy important? Because it's good for the company? Or is it better for just the ecosystem? Or both? Or what? Just just any thoughts on that? Yeah,

Natty 26:05

I think it's both. I mean, kind of going back to what I said earlier, I think a strength of our ecosystems is the collaborative nature of it. And so if that's the strength than if you believe in that as a as a strength, that you kind of want to have that in all aspects of what you're doing. And so it's, it's great for us, I mean, this happens all the time, where maybe an entrepreneur, we're helping needs help in one area, we may not be experts at that, but maybe someone else who's at the table is and so it just brings a whole nother set of expertise, a whole nother network to the table. So we just believe in surrounding entrepreneurs with as much help as possible. And if that means 2, 3, 4, 5 funds, plus a bunch of angels, we tend to think that's better. I think the challenge happens for entrepreneurs in that can be many stakeholders to manage. And so we do like to have a little, at least clear expectations around the level of involvement on each investor from each investor so that the entrepreneur knows what to expect from everyone, and how to leverage that network around them. But yeah, we think it's good for the entrepreneur, we think it's good for the ecosystem.

Les 27:07

Yeah. What about when you consider investments? And you, in particular, I'd say when you consider you know, maybe leading a presale precede or seed stage deal, what do you what are you looking for? And is that is that unique? Do you think, to this region, in terms of how you're looking to find the best opportunities?

Natty 27:26

Yeah, we learned a lot about this at TechStars. And to steal sort of a heuristic from TechStars that's carried over into our fund is we look at six things and rank order, and they are team team team market progress. So it's a cheeky way to remind ourselves that at the pre seed and seed stage, you're largely backing a team and their insights, versus a specific idea, or any given amount of progress that they have. And so we really try to hold that hold to that. I will say, though, that there's a there's a weird nuance there, which I hear from a lot of founders, which is like, Okay, you say you back team, team team, but you're asking me for my pitch deck and want to like know about the business? So does that is there a disconnect there, because you say you're backing teams, but then you're like really focused on maybe even before taking a meeting, you want to see the pitch deck. And the reality is, is while we're very team driven and team focused, we do have we have learned over time that we have to really like the market and be passionate about the market that they're going into, or else, we just find that we're not as effective and helpful if we don't love what they're doing and the market they're going into. So it does need to check sort of all of those boxes for us. But the main thing we emphasize is we want to back entrepreneurs who have who have certain attributes and traits, and we're really, at the end of the day backing a team at that stage of investment.

Les 28:50

Well, and I think you know, if you look at Matchstick’s portfolio, I mean, it's it's really exciting to see, when you focus on the people and the team, you get what I see in your portfolio is a lot of diversity, a lot of you know, really amazing founders, with diverse backgrounds, diverse experiences. Can you talk at all about how that is how that is? That has evolved in your strategy, because it's something I think I definitely have admired about what you do just you know, you say it, and you do it as a as a firm and as a person.

Natty 29:26

Well, thanks for acknowledging that. Yeah, I mean, we, I would say diversity has always been a priority for us, it became even more of a priority because once George Floyd was murdered in Minneapolis, which is where Ryan, my partner's based, so in our backyard, you know, a lot of people sort of had this realization moment where it's like, wow, we didn't really understand the inequity in in our culture in general, and specifically our industry. And so I think we were always aware of it, but that really, really like forced us to understand it more deeply. And we did a lot of work around that. At the end of the A day, it's not a charity for us to back on diverse entrepreneurs, the the data shows that it's a better return on investment and that more diverse teams perform better. So we we looked at the data, we understand that data. And so what we've done is really prioritize ensuring that we have diverse deal flow, and then spending time understanding what is our conscious and unconscious bias in our selection process. And our theory is if we target diverse pools of entrepreneurs, and we understand the bias that creeps up in our process, inevitably, at the end of the day, we're going to get a diverse portfolio. And so the work that we've done to ensure that we have a more diverse portfolio has really been around top of funnel targeting, and making sure that there is a diverse, there are diverse pools of entrepreneurs that we're in or interacting with. And, largely that's resulted in a more diverse portfolio, and hopefully a portfolio that over performs in the long run. So it's been a priority for us, because I mean, diverse entrepreneurs are our top performers. So let's go support them. 

Les 31:02

Yeah, I love the strategy that you highlighted, too, because it's so true. What about how do you think about specifically get where these companies go after you invest in in terms of the region? And how do they get to the milestones where coastal VCs are, or, you know, just just more, you know, growth stage capital will be attracted to them do any, any secrets or tips for for founders out there that are working towards those sorts of goals?

Natty 31:30

Yeah, I mean, the good news here is that Series A and coastal capital is traveling better than it ever has before. And maybe the biggest benefit that our region had from COVID was, well, there's a lot of benefits, but you had a lot of entrepreneurs moving here. But you know, probably as important was it a lot of Series A investors realize that they can invest and, and be involved with a company over video, or zoom, or whatever it is. And so I am seeing that trend continue. And I think that that is has been a huge advantage for entrepreneurs in our markets, where even two years ago, it was maybe you could raise a seed round, but it was pretty hard to raise later stage capital, it's gotten easier because that capital will travel more than it ever has. That being said, I do still feel like the bar is slightly higher for a company in our region, because you're competing not only with the best companies on the coasts, but also with a partner at a fund who's going to maybe have to travel more than they expected or anticipated before and so maybe the bar is even slightly higher. So what that's showing up for us in terms of helping our portfolio, it's just really making sure we build good businesses like focusing on revenue focusing on on not necessarily profitability. But like good unit economics, we want our companies to really stand out when you're looking at a coastal pier, because our view is a lot of stuff that's, that gets a lot of like the coasts are really good at generating hype, hopefully, we're good at generating a bunch of substance. And so when we want when our companies go out to raise, we want the prevailing thing to be like, well, here comes another Rocky Mountain region company, I'm sure they have really good fundamentals, I'm sure that they're like, actually building a real business. And so that, to me, is more fundable in the long term, no matter what the cycle is, then, you know, whatever the hype is around a company, I do think companies need some hype. And I think that's probably an area where our region could do better is like, we need to hype our companies more, and we need our entrepreneurs to hype themselves a little bit more to make sure they're on the radar. But we're really focused on building, you know, high growth, world class companies that are built on a strong foundation. And I would say that that's what we focus on with our entrepreneurs, just to make sure that they stand out when they go meet coastal investors.

Les 33:41

Yeah, it's great, great advice, you know, getting back to the fundamentals for sure. What What about any advice specific to you know, given given the current kind of public market downturn, and some of the more recent macroeconomic trends that we're seeing? Does that change any of the advice you've given or or tweak it in any way specifically to founders in your portfolio? In terms of riding out the storm here?

Natty 34:06

Yeah, our view is that access and price of capital has dramatically changed. And so entrepreneurs need to be much more cash conscious. And that shows up in a lot of things. One is making sure you're collecting from your customers, because your cash in the bank is different, necessarily in revenue. Second, is really ensuring that your spend is smart and efficient, because we don't know what the standards are going to be to raise your next round of capital. And those standards were, frankly, quite low over the last cycle. And so our view is that great companies will always get funded over the last cycle, good companies were getting funded, mediocre companies will sort of always struggle. The problem going forward is that good companies I think are going to struggle, at least for the near term. And so you really have to ensure that you're in the great category. And the way to do that is to make sure that you have enough time to hit the metrics that a great, great company, that a great company requires. And so that really is around cash collection, being smart with your spend cutting if you need to, maybe, you know, not doing quite so many, like hire hires in advance of when you actually need them. So just being really smart around that in this cycle, which is not super different from the advice we kind of always give startups but I think we, I think we've been more. I think, I think it matters more now, to do those sorts of things. The nuances that we've had trouble with is that there's not really a general advice that applies to every company, we have a bunch of companies in our portfolio, that are growing great right now. I mean, they're hitting plan, there may be ahead of plan. And so for those companies, we don't feel like maybe that strict sort of like cash conservation mode doesn't make sense, because we're investing into a product that's finally starting to work. And we want to take advantage of that. But it's just being aware that that next round may be harder to access at a price that you may not want. And hopefully in a in a scenario, you can avoid adding what's kind of quote unquote, called structure, which means that that the next round of VCs add in things like higher liquidation preferences and terms that are more unfavorable to the entrepreneurs and early investors. And so really, to avoid those scenarios, you just want to be super smart with your cash, if your business is going well, like, let's continue to invest into it and take advantage of the opportunity. If it's not really clearly maybe three axing year over year, let's be smart about our spend. And so we're kind of taking a nuanced approach with each company, but generally that kind of advice right now and this

Les 36:31

yeah, that's, I think it's very prudent advice. How are you? How do you think about the future of the region? I mean, obviously, you're long on the Northern Rockies, you're long or long on the Rockies long on the northern United States, in terms of entrepreneurship and early stage tech companies, but how do you think about where are we going what's what's in Natty Zola's crystal ball of the future here for for the region?

Natty 36:54

Yeah, well, I'm obviously biased. But I'm super optimistic about the region. I mean, we have we have shown over the last 15 years, great companies can be built here, great entrepreneurs are homegrown here, great entrepreneurs are moving to these regions, we have an amazing lifestyle, great quality of life, you can live anywhere and do big things and accomplish big things. And so I don't know how that stops. I mean, maybe if investors just stop investing outside of the coasts, but we'll figure that out. So I just expect that we are going to see these ecosystems continue to deliver and build great companies. We want to attract great entrepreneurs, I would say across the region, we generally have very supportive leadership and in, in, in politics, who are supporting these regions? I don't know I kind of see more of the same. I mean, maybe I'm super biased here. But I think we'll just continue to grow. And I don't think we want to become Silicon Valley. I don't think we want to become New York or Boston, I think we want to become a region that's known for for the entrepreneurs that we back and support and the companies that we build here, and we'll do it our own way. And we welcome you know, great entrepreneurs to come here. And hopefully a lot more of the of homegrown people decide to spin out of whatever company they're at, or come out of college and build a company, but you can do it anywhere. And we've proven that so let's keep doing it.

Les 38:19

For sure. Nattie. Really, really fun having you on the show today. I want to thank you for taking the time. Are you on the personal front? Is there anything fun? You're looking forward to in the next 30 days? Any anything fun with the family this flight plan? Yes, I'm

Natty 38:34

I'm actually going to Italy for my cousin's wedding in two. Oh, I'm a big traveler. I mentioned earlier in the in the podcast that I started a travel company. I've been to 54 countries. I love traveling. I think it's so important and special. But I have not left the United States Canada or Mexico in seven years because I've been running TechStars, been running Matchstick. I have two little kids, we had COVID It just didn't happen. I'm so pumped to go on a trip. I'm going with my whole family. It's gonna be a ton of fun. And I'm looking forward to that.

Les 39:08

Well, I'm so glad I asked. And I'm so so excited for you to have that that time and that that vacation well well deserved from somebody who has done so much for Boulder and for the for the tech ecosystem more broadly in Colorado and the northern United States. So thanks, Daddy, why don't you leave us with Can you tell us where our listeners could find out a little bit more about you and Matchstick ventures online?

Natty 39:33

Yeah, well, thank you so much for hosting me and appreciate everything you're doing in the region. We love collaborating with you. People can can find me Is our website. I'm I'm on Twitter at nattyZ. I'm pretty accessible. You can just Google natty and boulder or Natty Zola and you'll find me and would welcome you know connecting with anyone in the ecosystem. Thanks Natty. Thank you

Les 40:06

Thank you for listening to this week's episode of Found in the Rockies. You can find links in the show notes or go to to get transcripts, links and contact information for today's guests. If you like what you heard and want more, please don't forget to rate review and subscribe to get notified as our new episodes drop every two weeks. We'll see you next time.