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
Dec 15, 2023
auto_awesome
Davis Smith, Founder and former CEO of Cotopaxi, shares his remarkable journey from selling pool tables to scaling a $150M outdoor apparel brand. He reveals how overcoming 100 investor rejections shaped Cotopaxi's trajectory. Davis delves into the impact of his childhood experiences on his entrepreneurial mindset, the challenges of aligning values with business missions, and the importance of purpose in entrepreneurship. He emphasizes the need for new financial products to support long-term goals and the balance between integrity and impact in business.
Raising funds for a brand focused on long-term commitment is challenging due to misalignment with short-term market pressures.
Successful entrepreneur scaled a pool table business to $6 million and built a profitable outdoor brand generating significant revenue.
A brand represents a movement or belief system, emphasizing the importance of purpose, values, and making a positive impact on the world.
Deep dives
The Importance of Building a Brand without Investor Dependency
The podcast episode emphasizes the speaker's attempt to fundraise for their brand without the need for investors. Despite showcasing a successful track record, the speaker faced significant challenges and rejections. This highlights the difficulty of raising funds for a brand that aims to prioritize long-term commitment. The episode sheds light on the importance of being independent and self-sustaining in building a brand.
The Journey of an Entrepreneur Right from Selling Pool Tables
The podcast delves into the entrepreneurial journey of the speaker, starting with his experience selling pool tables in college and eventually scaling the business to $6 million a year. The speaker shares the inspiration to launch a challenger brand in the outdoor industry, leading to the creation of Kodopaxi. The episode highlights the growth and success of Kodopaxi, which has become a prominent outdoor brand, generating significant revenue and profitability over the years.
The Significance of Purpose-Driven Branding and Balanced Entrepreneurship
The podcast explores the importance of purpose and values in building a brand. The speaker emphasizes that a brand goes beyond products and aesthetics, representing a movement or a belief system. The episode reveals the speaker's commitment to make a positive impact on the world, particularly in eradicating poverty. Moreover, the discussion challenges the notion that entrepreneurs must sacrifice work-life balance to achieve success, as the speaker emphasizes the ability to build a successful business while maintaining a balanced life as a parent.
The Challenges of Fundraising and Building a Durable Brand
The podcast episode delves into the challenges faced by the speaker during their fundraising journey and their vision to build a durable brand. They discuss their misalignment with some investors who were focused on creating a return, while the speaker aimed to prioritize the brand's mission and purpose. They embarked on a six-month-long fundraising process, but faced difficulties in finding investors committed to a long-term vision. The speaker highlights the importance of finding investors aligned with the brand's purpose and the struggle to balance short-term market pressures with long-term goals.
The Value of VCs and the Importance of Time and Service
The speaker emphasizes the value venture capitalists bring beyond funding, such as their expertise and guidance in making better decisions and attracting talent. They share personal insights as a father, discussing the importance of time spent with children and balancing love and expectations. The speaker reflects on their own personal growth and the need to be less self-centered. They also express their desire to leverage their platform to rally other business leaders and create a movement focused on doing good. Finally, they discuss the pain and joy experienced during their work in Brazil, highlighting the significance of service and finding lasting happiness.
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?
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode