Navigating Early Stage Entrepreneurship and Growth with Jake Colognesi

[00:00:00] The reasons that companies raise capital that I think really, you know, have a lot of merit are, hey, we're doing fine on our own. But, you know, we have three sales reps. They are unbelievably busy. These guys are taking orders. We know that if we doubled the sales team, that they would be equally or pretty darn close to as efficient as the three that we already have.

[00:00:25] And making that investment ahead of the revenue would require a little bit of additional capital. Like our balance sheet can't quite afford that. That to me is the start of a healthy conversation around raising capital.

[00:00:45] Welcome to En Factor, conversations with entrepreneurs who started, stumbled and succeeded. I'm your host, Rebecca White, and I'm very excited that you decided to join us today.

[00:00:56] We have Jake Colognesi on the show. He's partner and founder of Mamba Growth. And over the years, he's built a career moving from investing to now running his own firm, helping entrepreneurs, smart people who have great ideas, turn them into really successful companies by bringing them the resources and support they need.

[00:01:19] But before we start, I want to do a little mini lesson for everybody who's thinking about taking money or maybe who has taken money and needs to rethink some things about the choices they've made. We're going to talk about how to choose smart money. It's something actually that Jake and I talked about, talk about in our conversation as well.

[00:01:40] But let's start. What do we mean by smart money? It's more than just capital. It's expertise, networks, and strategic mentorship. Research has shown us that angels and VC investors who provide strategic guidance, industry connections, and business support, that's something we call smart funding, can help reduce common startup risks and dramatically improve outcomes.

[00:02:09] Simply put, the investor who writes the biggest check isn't always the best partner. So start first by thinking about whether or not the money you're considering is going to be smart money. Do your research. Talk to other CEOs or others who have worked with those people and learn as much as you can about the people that you might be bringing on when you bring on the money. And I would also suggest as number two to bootstrap to learn.

[00:02:38] Jake also brings that up in our conversation, and it's something I've seen over and over with the entrepreneurs I've worked with. Bootstrapping isn't just about funding. It's about a discipline. So when we're talking about bootstrapping, we're talking about being more creative with the resources that you have so that you can work longer to build your market without taking money from other sources.

[00:03:04] A study of Inc. 500 companies revealed that 60% were launched with under $10,000 of founder capital. This internal funding fosters creative problem solving, lean operations, and a laser focus on getting to revenue. That's ultimately going to build a better business, and it's also going to put you in a better position when you do decide to raise money if needed.

[00:03:32] And that kind of leads me to number three. Keep thinking about the power of scarcity. When you don't have cash to burn, you innovate. Lean startup methods such as build, measure, and learn. That's the way to go. That's the way to thrive under limited resources.

[00:03:52] Scarcity forces founders to be scrappy, find low-cost channels, get early validation, iterate fast, and make mistakes fast so that you can learn fast. That resourcefulness becomes a competitive advantage as you grow. So even when you take money, if you can keep that scarcity mindset, it can be really powerful.

[00:04:16] And number four, another topic Jake and I talked about is make sure that you build boards that add real value. When you're raising money, you're probably going to have to have a board if you don't already, a board of directors. Those are people that help hold you accountable. They give you strategic and, on occasion, especially if you're a startup, operational advice. A recent board intelligence study found nearly a third of boards add no value, though,

[00:04:45] and half actively hold companies back by focusing on the past instead of future opportunities. That's a really interesting statistic to me. I have spent a lot of time on boards, and I've always wanted to make sure I could add real value to those boards. Founders should be looking for board members who bring deep industry insights, strategic frameworks,

[00:05:10] and access to customers, partners, hires, and additional capital if needed. You don't want them to bring a big ego to the table, but you do want them to bring their expertise, their experience, and their resources. So be very careful as you build out your board, and be very careful as you take money. You want smart money, and you want smart board members. So that's our framework that I wanted to share today. Choose your investors who offer more than cash. Bootstrap to build muscle.

[00:05:41] Embrace scarcity as a catalyst for creativity. And make sure that your board is full of people who can help move your business forward. Okay, let's get on to Jake. It's a great conversation. I know you're going to enjoy it. I really enjoyed meeting Jake and learning from him today, and I hope you will too. Jake, welcome to The Infactor. Well, thank you for having me, Rebecca.

[00:06:10] I appreciate the invitation. Yeah, I'm so excited to have you here today. We kind of found each other through Stephen, my podcast producer, who's a relative of a very large family, I'm learning, and he's very proud of you and the work that you've done. And when I had a chance to look over your background, I knew that you'd be a great participant in this show because you have a whole lot to share. You're now the founder of Mamba Growth Equity.

[00:06:38] And I'd love to ask you about that name, but I know you've been working in finance for quite some time. And I think you're a Dartmouth grad. Dartmouth grad? Did I see that? Yes. Yeah, the business school program. Yeah, the business schools. Yeah, so the Tuck School. Is that right? That's right. Yeah, you got it. And I know you have your MBA as well. Yeah, yeah. That's a great school. And I love New Hampshire, too. It's just my husband's family is from northern New Hampshire. And we got engaged on the top of Mount Washington.

[00:07:08] And so I have a lot of fun. Yeah, I have a lot of fond memories of Mount Washington. But on another note, tell me a little bit about your background and kind of how you got into this whole space of equity investing and working with startups. Yeah, sure. So I am and Stephen's parents are from central Massachusetts, just south of Worcester. And as you've sort of alluded to, I went to school in New England all the way through college and grad school.

[00:07:37] But my first job out of college was in investment banking. And to be completely honest with you, Rebecca, I was leaving school, looking to work hard, looking to make as much money as I could and gain some skills. But still in the spot where I wasn't entirely sure what I wanted my career to be. Certainly didn't have my eyes set on investing, nor was anyone seeking me out actively to be an investor at that time.

[00:08:05] But I went into investment banking at a firm called Kalanen Company and actually had a great experience. It was a very painful two-plus years as an analyst working till crazy hours in the morning, but learned a lot. And it actually opened quite a few doors for me. And, you know, at the time there was kind of a shift.

[00:08:27] It's more common now, but a shift in the private equity world where private equity firms, growth equity firms were looking for younger folks that knew how to build financial models, but also were, you know, essentially used as the tip of the spear in terms of identifying companies and investments for the firms that they worked for. And so I got my investing career at Fidelity and their venture capital group. And I was doing just that.

[00:08:52] I was doing a lot of research on different spaces, all within technology and specifically enterprise software. And, you know, reaching out to CEOs, cold emails, cold calls. And I loved it. It's, you know, it's not for the faint of heart sometimes, but it's a great way to learn about all different types of businesses. And anyways, I was there for a number of years, got my MBA at the Tuck School of Business, which you had mentioned earlier when we spoke.

[00:09:20] And then after that, I joined a group in Boston called Volition Capital, which invests in software companies. So doing pretty much the same thing that I was doing before. And then more recently was a partner at a group called Sageview Capital, which was founded by two KKR, longtime KKR executives. And again, doing the exact same thing and making minority investments into software companies.

[00:09:43] And yeah, the Mamba piece is interesting, but I, gosh, I mean, you know, for that introduction, you can tell I've been doing virtually the same thing for a long period of time. And I found, and I know there are others out there that, you know, can appreciate this, but the best companies that I was evaluating were smaller businesses that had established product market fit, had revenue, were operating profitably, growing, and didn't necessarily need outside capital.

[00:10:12] And actually were really greedy about the amount of capital. Like they wanted a partner, but didn't necessarily want to raise one of these big, splashy venture rounds, 20, 40, 50 million dollars. And, you know, we routinely at Sageview, at least, which was a great firm, had a bigger fund, 700, you know, plus million dollars to put to work. You know, we had a minimum investment size.

[00:10:38] And so we would routinely kind of pass over this really interesting segment of the software world. While I really loved my time at Sageview, I loved the team there. They've actually invested in my firm. And so I'm incredibly grateful for everyone on the Sageview side.

[00:10:55] I, you know, I felt really compelled to see if I could build a firm, addressing this earlier stage opportunity, smaller check size, and working in concert and really in service of, you know, the founders of these very attractive businesses. And so that's what I've done. Long-winded answer to your question, but hopefully, you know, provides an appropriate backdrop. Yeah, I love it. I love it. And I think it makes a lot of sense.

[00:11:21] You know, we're talking here at the intersection of entrepreneurship and investment, and you've got, you know, you've got your background in investment, but now you've got your own firm. So what has changed for you moving from being a partner or, you know, a junior partner, whatever your role was, advisor, you know, at the earliest stages to being a founder now?

[00:11:47] Yeah, I mean, a lot more sympathy for other founders and leaders out there that I guarantee you are doing it way better than I'm doing it probably. But seriously, like joking aside, I think that just appreciating that so much goes into the business of our business, you know, just being candid. I mean, I've always been in the front of the house, you know, working with, you know, getting on the road, meeting entrepreneurs, you know, forming relationships, making investments, performing due diligence.

[00:12:15] But if you think about the business of private equity, broadly speaking, it's there's so much more to it, right? And, you know, we've talked about founders. The reality is, you know, we and I say this to our team all the time, have two customers to serve relentlessly, hopefully. We have the entrepreneurs that we partner with, but we also have the folks that are putting us in business and providing capital to limited partners, right? And that's a whole different skill set.

[00:12:41] And, you know, something that really up until now I've had some exposure to, but I wouldn't say it was necessarily a core part of my job. And so I've just sort of, you know, learned trial by fire that, hey, there's a lot of stuff that other folks have taken care of for you for many, many years, essentially two decades that, you know, when you're the single and only employee of a company falls on your shoulders. And so I say this all, you know, I've actually really enjoyed it.

[00:13:09] It's a lot of fun, but there's a tremendous amount of inefficiency with like learning all this stuff and trying to, you know, trying to build the plane as it's leaving the tarmac. Yeah, yeah, exactly. So you're raising the funds and you're also choosing the investments. So you're doing both sides? Yeah. So, you know, we were fortunate. We had a relatively quick fundraise. Mambo was formed in July of 2024. We raised our first fund.

[00:13:37] It closed in October, early October of 2024. It was a $104 million fund. You know, we could sort of, well, a couple things. I mean, that sort of meant we were in business. We had fees coming from our investors and it gave me the opportunity to build out a team. So we have roughly a half a dozen folks currently that are helping me in that, you know, investment identification and diligence process.

[00:14:04] And, you know, that's sort of, you know, where we're at in our life cycle. We just made our first investment, which was exciting. So we do have a portfolio company. And so it feels like we're finally the starting lines a bit behind us and, you know, we have some momentum. Right. So for audience listening who may not totally understand your world, most firms like yours specialize and you specialize in investing in B2B technology. Is that right? Yeah.

[00:14:34] Smaller, you said in the smaller investment, earlier Series A or early stage investments. You got it. Yeah. So these are B2B software companies. They're in, when I say small, they're typically two to $15 million of revenue. So they're real businesses. They have customers. They have renewal history. There's data to, you know, essentially process and analyze.

[00:15:00] But, you know, and I know that your experience, you're on the board of a publicly held company. I mean, we're like a far cry from that universe. Right. I mean, this is these are companies that are trying to, you know, go from five to 10 million of revenue to 50 just by implementing smart, you know, non-heroic strategies. And that's so a lot of a lot of the companies that we're looking at are vertical software. So that I mentioned we made one investment.

[00:15:28] It's in a company in Grand Rapids called Lutis, which provides cloud based software for performing arts institutions. So even at the University of Tampa, their theater drama department, like they are using software to sell tickets. Plug, they should use Lutis. But we all use software for everything. So it's these types of businesses oftentimes that, you know, we interact with but might not even know that we're interacting with. Yeah. Yeah, absolutely.

[00:15:56] Today, I mean, I can't resist going down the AI conversation because there are so many things being built. And we could talk about, you know, blockchain and sort of, you know, it's almost a revival, I think, in blockchain here recently. Excitement about it anyway. So, you know, what kinds of things are you seeing out there that are kind of exciting in terms of trends? And sometimes it's the least sexy, if you will, businesses that can be some of the best investments.

[00:16:25] But what are you seeing out there? And what are you what are you what are your thoughts about things that are getting built with AI right now? Yeah. I mean, it's, you know, every day it's it's incredibly exciting. The period is incredibly exciting. And we spend a lot of time talking about AI. And, you know, candidly, I think that, I mean, everyone's kind of on this frontier and sort of learning in real time.

[00:16:49] And so even when, you know, you see someone on LinkedIn or X or, you know, anywhere else coming out with like a really strong statement on the future of AI, I kind of take it all with a grain of salt. Like, I believe that this is the future. We're doing our best to learn this in real time. Integrate AI into everything, literally everything that we're doing in building at Mamba.

[00:17:10] The flip side is, is there are just so many unknowns in terms of how AI will impact not only the companies that we invest in, but, you know, our daily lives. You know, for us, I would say what we talk about is, you know, we're trying to invest in companies that are system of record businesses. So by that, I mean, you know, businesses that like take software that helps.

[00:17:39] Well, I mean, you could take Lutis, for example. They help performing arts organizations. They have a tremendous amount, access to a tremendous amount of data, whether it's show sales data or how different K through 12 organizations perform or how different community theaters perform. But they have access to this proprietary data and that data, you know, ultimately is the gold that, you know, kind of powers, so to speak, artificial intelligence.

[00:18:05] And and so we're trying to invest in companies that, yes, they're traditional enterprise software companies. But, you know, they have access to this information where there's a moat built around it that if you're a, you know, an anthropic or an open AI, you know, so chat GPT and Claude, you are not going to have access to that customer information in the same way that the companies that we're investing in them have. Now, that doesn't make you an AI business.

[00:18:32] That doesn't do anything unless you actually turn that data into actionable insights that somewhere down the line pleases a customer so much that they, you know, buy more from you. And so those are the conversations that we have with the companies that we're endeavoring to partner with. You know, how do we how do we turn the unique access to data that you have into something that also equally uniquely delights the end customer?

[00:19:00] And if you can do that, I think there's a lot of magic to be made. But if you don't, I suspect that someone else will come up with the, you know, the solution to that very. Yeah. You know, one of the things that I'm saying, even with the work that I'm doing, because I'm, you know, I've got that entrepreneurial mindset and I can't stop getting excited about new opportunities and working on things myself or with other people.

[00:19:26] But I'm very fascinated by what you're talking about, because I kind of see AI, you know, if you think of the content and I think of it in the education space, for example, content that's proprietary, unique. And then you think about trying to turn it like a new way of learning, you know, finding new ways of teaching and educating, because our industry is totally being disrupted. And there's lots of opportunities where there's disruption.

[00:19:52] But AI, these AI tools are making it so easy to do things that we never imagined before. And so what I'm curious about is, you know, what's the sustainability of that? Because we can build something pretty fast. And, you know, where does a real business come in? And I loved what you said. You've got to create something of value, obviously. But how sustainable are these tools in the sense that they're so, you know, they're so available to everybody?

[00:20:23] And, you know, you can build these things so fast. Are you really creating something that's unique? Yeah. No, I think that's like the million dollar question. It's like if I had to sum that up into, you know, a question that we would ask when we're looking at a potential investment, it's that, you know, gosh, like, can someone come out of the woodwork and build this within 48 hours?

[00:20:47] I mean, I'm, you know, exaggerating here, but a very short period of time and have an apples to apples product or maybe even something better. And so my answer to that in like, you know, if we caught up in a year or two years, like Lord only knows whether or not, you know, we're right here. But this is just our current thinking is, you know, to the extent that a company has unique access, exclusive would be your best case scenario, access to a unique data set.

[00:21:16] That company is in a position to build that product or make sense of that data so you can provide things like predictive analytics to your customers or identify customers that are most likely to churn in a way that maybe if you and I from the outside looking in without that data set, we wouldn't be able to.

[00:21:38] So we could build the application, but we wouldn't be able to build an application that had the same sort of effectiveness as, you know, the business that has, again, control of the customer data. So, you know, I'm not sure if I'm answering the question directly, but ultimately it comes down to unique data sets are, you know, solid gold when you're thinking about the eye. And the second that that data becomes public, I think it becomes an execution game after that.

[00:22:07] You know, can you just sell the product faster, you know, in some way entice customers not to switch? I don't know. Yeah, that's really interesting. And you point to something, you know, once if you've got if you've got content, let's say, or data, you know, I'm thinking of content from an educator's perspective. If you've got content and it's already been made public, then it's available to to any anybody out there. Right. To grab it.

[00:22:34] So you're so the proprietary nature of it is is key. And we kind of live in a world of where we've been building everything publicly. Exactly right. Yeah. I mean, you have you have data from your students taking your tests that no other university, no other class has. There are things that you can do that no one else could do with that data set. Now, I I don't know what those things are.

[00:23:02] It might not be like, you know, you might not be able to build a business around that. But I bet you could build something interesting that would be unique and bespoke to, you know, your students in your room, you know. Right. Right. I think. And as entrepreneurs who are listening out there, I think it's important for them to think about, you know, because what happens to me. And I think a lot of entrepreneurs is that this this whole I mean, AI is helping us be a lot more productive.

[00:23:31] Just I mean, that's fantastic. But we also can get excited and have sort of a production mindset, if you will, as opposed to a market mindset. And so you, you know, taking it back to your earlier comment, I think the real key is around. Are you solving a real need out there with what you're building? Yeah. The you know, the foundation for any good business. Right. There are problems. And are you is there someone who's smiling at the other end of whatever service or product that you're providing?

[00:23:59] Yeah, that's right. That's right. So I'd love to ask you a little bit more about it for our listeners who are thinking about how they build their businesses and how they fund their businesses. When should a company start thinking about private equity versus other sources of funding?

[00:24:19] And and how I guess, well, I've I've seen one of the things I've seen happen with startups that I've worked with is that they take family and friends money or they take money from investors that don't understand how to invest in what it means to invest in early stage companies. And then later when they want private equity funding or when they want VC money or even angel money, they run into this problem.

[00:24:45] So what are your thoughts about funding and startups and how does a company when are they ready for you and how do they get there? Yeah, yeah, sure. This this might not be true for every company. And I'm going to speak a little bit against the industry that, you know, I operate in and I built my career on.

[00:25:08] Um, I think personally that it's best to bootstrap a business, you know, and to see if you can build a product. I mean, I find that scarcity almost always drives the best decision making. Um, and it, it, this could, you know, applies outside of business. But, you know, when you have scarce resources, you think long and hard about how you're going to use those resources. Absolutely.

[00:25:37] And you usually make better decisions, you know, uh, versus being in a scenario where, you know, there's an abundance of resources. And so, you know, my, my advice to entrepreneurs, again, which like probably every venture capitalist out there might, you know, disagree with is bootstrap the business for as long as you can, you know, and be really greedy about equity. You know, the second that you do take investment from a venture capital firm, particularly if it's early on.

[00:26:06] So you're working with like a seed stage or an angel investor, you know, that investor has certain rights, certain governments, you know, they have access to your information. If they're helping you out in incredible ways, that's fantastic. Right. But oftentimes your company is one of 30, you know, in a fund. And, you know, I, I just want to make sure that I would, you know, say to this founder, gosh, like just make sure you're getting exactly what you want out of that relationship and that it's really worth it.

[00:26:35] So, you know, my advice would be to bootstrap the business, you know, show that you can run a profitable company or a breakeven business. You know, for us, we start looking at investing in companies when they're $2 million of revenue. So not, not big businesses, but they're typically growing quickly. These are profitable companies as well.

[00:26:54] So they are in the driver's seat in terms of making the decision of bringing on a partner and they'll only do it if they feel like, gosh, with Jake and the mama team or any other firm, you know, we're going to be better. We'll be able to go further, faster, accomplish our goals in a way that perhaps we wouldn't have been able to otherwise. And if you can't answer that question as a bootstrapped founder on business, I don't think there's any good time to raise capital. Just don't do it, you know, like keep doing what you're doing.

[00:27:22] And so, again, you know, the reasons that companies raise capital that I think really, you know, have a lot of merit are, hey, we're doing fine on our own, but, you know, we have three sales reps. They are unbelievably busy. These guys are taking orders.

[00:27:44] We know that we, if we doubled the sales team, that they would be equally or pretty darn close to as efficient as the three that we already have. And making that investment ahead of the revenue would require a little bit of additional capital. Like our balance sheet can't quite afford that. That to me is the start of a healthy conversation around raising capital.

[00:28:06] You know, conversely, I think if you're raising capital to keep the lights on and you need another year for the, you know, to figure out the product or, you know, we just need X, Y, Z. And then, you know, customers are going to love our solution. That to me, and this could just reflect my own personal sort of risk profile is, I don't know, less good, less attractive, certainly from my perspective. Yeah. Yeah. And I think a lot of companies get in trouble.

[00:28:35] I love your scarcity conversation because I think a lot of companies get in trouble because they assume they need to go out and raise money when they really need to probably get more creative with what they're doing. And I think the most creative solutions come out of scarcity. And once you get a ton of money, you forget about, you take the path of least resistance, which often isn't the best.

[00:29:01] So I think that's a really good conversation for most founders to have or hear. Some of the challenges I've seen have been taking money from the wrong investors, too. People that don't understand early stage. Maybe they watched, you know, and they got this idea they were going to invest in a startup, you know, and it would be the next big thing. But, you know, I've seen that. That's happened to a number, especially of our students. They've taken money from the wrong investors.

[00:29:29] And then later, they really had to unwind that because they had people giving them a ton of advice that didn't know what they were talking about. So, you know, I think that's a lot of what you're talking about, too. Take the wrong money, taking the wrong money. 100%. Yeah. I would encourage any of your students thinking about taking money, too. If it is even a, you know, an institutional investor or someone who's, you know, kind of a career angel investor. Cold call.

[00:29:59] I'd tell that student, cold call every CEO that this investor has ever worked with. When CEOs pick up the phone and they'll tell it to you straight, like, oh, gosh, you know, I work with this person and they're amazing. And I wouldn't have gotten here if not for this person. Or they'll be like, you know what? They gave us the money and then they exited stage left. And they're a pain in the neck, you know, once a year when they need, like, their K-1 or whatever it is.

[00:30:24] And so different, you know, so again, like just picking up the phone and trying to almost like you're hiring an employee, you know, trying to figure out whether or not this is going to be a person or an organization that's going to be additive. And help me accomplish my goals or in some way be a little bit of a parachute as I'm, you know, trying to run as fast as I can. You know, I used to have a I've mentioned this on my podcast before. So anybody that listens to a lot of them has heard me talk about this.

[00:30:52] But I've given a presentation a number of times called Entrepreneurs Are From Venus, Investors Are From Mars. Because a lot of the experiences I've had with startups that have that have turned into a lot of drama and quite honestly, a lot of problems are when the investor and the entrepreneur aren't on the same page.

[00:31:11] I don't know if you remember that John Gray book about men and women and the way that, you know, you know, you may be saying the same words and you think you've got the same agenda, but it's it's very different. So I've seen a lot of businesses go south because of that, that that problem of not being on the same page and and and the entrepreneur forgetting sort of why the investor is there. Have you seen that experience and on boards that you've been on?

[00:31:41] Yeah, this really resonates. And I think in in the in the tech community, you know, not not to name names, but I can think of companies that have raised kind of they had their, you know, seed investor. They raised a series A, then they raised a series B, and then they raised a series C and a D. And all of a sudden, if you really think about it, this can be a great relationship amongst everyone around the table of the companies performing exceptionally well.

[00:32:09] But to the extent that the business goes sideways or as hiccups, you all of a sudden have four or five, six institutional investors with different timelines, with totally different incentives solving for different things. You know, some some of these investors may need liquidity sooner so that they can put money back in their own investors, you know, pockets before they ask them to re up for the next fund.

[00:32:34] Others might want to want to hold on to an investment forever and never want to think about exiting a business. They may just almost from a character perspective, have different approaches to sensitive situations. You know, if if someone's I don't know, you lose a leader in a functional area or if you have to move on from a leader in a functional area. And no one talks about, you know, philosophically how they feel about those things when you're raising capital.

[00:33:03] It's right. You sort of get to that point. And then everyone has the conversation and realize, oh, my gosh, like Jake and Rebecca are just totally on different pages on what we should do here. And so I agree with you. And again, I mean, it's more reason to limit the number of folks that are around the table. But also understanding that there's this bout like anything in life, there's kind of a balance, like you can get a lot of value out of an A plus investor when you find that person. Yeah. Yeah.

[00:33:33] I think that's a really important point because an investor, I hope, is going to bring a lot more than money to the table. And that's the real value. Right. You know, I think so. It kind of leads me into this conversation more about boards. And, you know, I looked at your LinkedIn. You've been on a ton of boards and that's that's part of your your role with the work that you've been doing.

[00:33:55] And I've been on a lot of boards from startup to now, as you mentioned, public company and some private companies in between bigger. But my question for you is to the entrepreneur who's out there and maybe they're frustrated as a CEO, they're working with a board or maybe they got a great board, you know, and they want to make it even better.

[00:34:17] What are some of your thoughts and experiences about what's really worked well, especially for early stage companies, but also perhaps for some later stage growth companies? What's really worked well? What are some of the biggest mistakes that you've seen CEOs make and business founders with their boards? Yeah, I think what. So we'll start with what's what I've seen that's worked well.

[00:34:43] You know, what works well is when you have people around, you know, smart and this is like true in all facets of life. But it turns out if you have smart, high integrity people around a table that are well-intentioned, like good things happen no matter what you're doing, whatever, whether it's a study group for in one of your classes or, you know, public company board.

[00:35:04] Those are the ingredients usually for a productive discussion and, you know, setting the stage to solve problems, you know, creatively. And so how do you get that? I think you it's back to, you know, interviewing board members and like really understanding, you know, the ins and outs of these people as individuals, human beings, what they're going to contribute, how they operate and so forth.

[00:35:30] And, you know, in our world, we we do see oftentimes companies, you know, if there are looking to raise capital and add a board member, they'll solicit term sheets from, you know, folks like us and other firms. You know, by and by and large, like oftentimes, you know, the highest price or highest valuation can win the day.

[00:35:53] And that can be a huge mistake, particularly if you're within five percent or 10 percent or something like that that's in the same hemisphere. And you have one really well-intentioned group and someone who's going to, you know, roll up their sleeves, grab an oar. And then, you know, another group where you're just one of many and, you know, you're not going to put the effort into being a productive board member.

[00:36:16] And so I would I would just, you know, for those entrepreneurs, just to answer your question, really think long and hard in the same way. If you're hiring a VP of sales or a CFO, is this someone that I want on my team, period? And is this someone who's going to help me be effective? So every seat around that board table. Having a very high bar, you know, if you're going to fill a seat with a person, they have to bring something to the table.

[00:36:47] You know, the other thing that I've seen work well is, you know, a group of folks that are not afraid to share their opinion, but also are great listeners. You know, I have a mentor. His name's Dean Nelson, who I consider the best board member I've ever, you know, seen operate. And he's smart as can be. He'll show up to the board meeting and I've seen it multiple times.

[00:37:11] And he'll have really just two things, three things, maybe tops that he feels like are the most important things that he wants to, you know, opine upon, so to speak. And and in, you know, you probably you've sat in a lot of boards. I'm sure that, you know, of people that every new topic that comes up, they just want to dive in and immediately tell you exactly what they think, even if it's out of their swim lane.

[00:37:37] Like, who am I don't write code? Who am I to tell you how to run your R&D organization? This is my time to sit back and just listen and observe. So anyways, finding for that entrepreneur, again, answer your question, finding people that will focus on the topics that matter, you know, will actually have input that will help them become more effective in solving problems. You know, things that I've seen that that don't work.

[00:38:05] I mean, my biggest gripe with boards at software companies are. You know, board members that show up that just don't take the responsibility seriously enough, so to speak. So like, you know, read the materials in the airport, you know, as they right as they landed, kind of show up and then have really strong feelings about how a company should operate. That is, unfortunately, I think, too common in our world.

[00:38:35] And, you know, and so, you know, from my perspective, people that really like fully, you know, the board meeting and those discussions, from my perspective, really shouldn't be rehashing what happened all that much. But rather, everyone should be should have read the materials, come prepared and have an understanding of what happened last quarter.

[00:38:53] And in the conversation should really be focused on, all right, you know, we all know that X, Y and Z happened last quarter, that this quarter we're going to, you know, have these three hurdles or things that we're trying to tackle. How the heck do we do it? I'm not totally sure, you know, and create an environment where it's like, OK, to be vulnerable and like, OK, to not necessarily have the answer, but solicit ideas from the smart folks around the tables. Anyways, I'm kind of blabbing at you. I will stop there.

[00:39:22] Those are some things that I've seen. I feel obviously you can tell like, you know, feel passionately about, but hopefully that's helpful. No, it's very helpful. You know, I've had a lot of common experiences. You know, there are a lot of successful people. This might surprise you with big egos. I'm just joking, of course. You know, there are a lot. And so those egos often get in the way I've seen, you know, and you kind of brought that up.

[00:39:47] The people that have to come in and their their main goal is to impress everybody else around the table with what the comment they can make on every topic that comes up. So, you know, it's really interesting because I think, you know, if you if you've made it around the table, you probably have some skills.

[00:40:04] But those soft skills, that emotional intelligence, that ability to work with others, you know, to bring your best game, to be prepared and to build trust and building a culture, I think. And I think that can be hard sometimes for a CEO because, you know, there there's an inherent power differential when you've got people around that table that are holding you accountable and that are bringing money to the table.

[00:40:33] And so I think it can be really challenging for an entrepreneur and especially for an entrepreneur to to sort of be willing to put their problems out there. But if they don't, that can also be a problem because as someone once told me, it's like a banana. If you've got a problem, it just is going to get riper. It's going to get worse. So you've got to talk about it.

[00:41:00] But have you seen that with entrepreneurs that sometimes they're just, you know, quite often not willing to talk about problems soon enough because of that kind of inherent power difference? And then the problem becomes really major and significant. Yeah, that's I think I have seen that for sure.

[00:41:19] I mean, it's not dissimilar from, you know, the person that reports to the CMO, you know, being hesitant or, you know, not comfortable bringing up an issue with, you know, some marketing campaign that they're in charge of. And I think, you know, the best leaders that are out there, you know, are clear with expectations. They hold people accountable, but they also create, you know, a space that's comfortable for people to make mistakes.

[00:41:48] I mean, failure and mistake is like, I mean, those are the seeds for like every good thing that's ever happened in any big business that's out there at some point in time. And so so back to, you know, the boardroom, you know, it's it's lonely being a CEO of a company. I barely know it, you know, as a leader of an organization for literally under 12 months. But I sympathize with CEOs. I mean, they they they report to the board, I guess, technically, but they you know, they don't have peers within their company.

[00:42:17] And so a board meeting is an opportunity for them to, I think, in its best form, have a comfortable conversation about the stuff that's on their mind that is challenging, that needs to be solved creatively. And if you have friction, as you kind of described, we painted this picture of, you know, different personalities around the table, like throwing in their opinions and maybe even, you know, you need to do this, you need to do that.

[00:42:45] That's uncomfortable for 100 percent of human beings, you know, like who would who would want to be the CEO in that board meeting? No one. And so anyways, like I you bring up like some really interesting but I actually haven't like thought through a lot of this this topic, this conversation. But it's it's a really important conversation that I think it's overlooked, you know? Yeah, I think so, too.

[00:43:12] And I think that if you were to talk to a lot of entrepreneurs there, there would probably be an undercurrent of a complaint that a lot of investors have never done it. So how do they know what I'm going through enough? You know, and a lot of investors are probably saying, you know, again, it's back to the Venus and Mars, the different agendas.

[00:43:33] But I do think that there is that a lot of CEOs struggle with the fact that especially institutional investors have not been in, you know, in a similar role. So they struggle with that. Yeah, that's exactly right. I think investors have an incredible amount of pattern recognition and at bats looking. I mean, they've essentially seen the same movie over and over and over again.

[00:43:59] Maybe there's different actors and actresses and so forth, but by and large, they've seen many of the same storylines play out over time. And that's a good investor should be leveraged for that. And I think about this with my limited partners. So when I talk to, you know, our limited partners, our investors in Mamba, you know, they've seen hundreds of Jakes and hundreds of Mambas come along.

[00:44:24] And they have that pattern recognition of seeing which funds, you know, what are the common threads of DNA amongst the best performing funds? And what are the common threads of DNA amongst the, you know, the worst performing funds? And so I always ask, I'm like, what am I doing? You know, what are the best doing that we're not doing? Because I need to know. I'll take notes on everything and we'll pick off what feels sort of like interesting and authentic to Mamba and we'll leave the rest. But, you know, so I think for entrepreneurs, it's the same thing.

[00:44:53] It's try to, you know, take as much as you can from the pattern recognition. And, you know, a good investor will be there to, you know, deliver the insights that they have from watching the movie again many, many times. But also, like, take a step back when it comes to how do we actually implement this? You know, if you've been an operator, there are investors that have been operators. Like, of course, dive in where you feel confident.

[00:45:17] But most investors, to your point and to the points of the CEOs that you're referencing, have not been in that seat, you know, and really shouldn't be talking about implementation maybe as much as they do. Yeah. And I think there is a difference, you know, having been on boards of different types. For example, on a public company board, you know, we try to stay very strategic.

[00:45:41] And I think when you're talking about startups, it's probably you lean in a little bit more to the operational side. So, you know, there are varying degrees of how deeply you get into the operations. But ultimately, I think what we're talking about here is how do you build that strong trust and those relationships and how do you communicate with each other and how do you build a culture? And I think every CEO has to be thinking about that as they're bringing in investors.

[00:46:10] And like you said, I'm sure that, I mean, it's not. Well, I don't I haven't seen entrepreneurs think about it that much because they are they tend to be way more focused on the dollars and the deal. And that's important. But that other piece, I think, is what will make or break it. And that's where the drama and the distractions can come from. Yeah, without a doubt. That's exactly right.

[00:46:36] I mean, you're kind of like choosing someone to shepherd you up Mount Everest, so to speak, and like be there with you as you, you know, accomplish this great thing for yourself. And, you know, going the fastest route might not be the best, you know, best path like going the sensible route and working with someone who, for whatever reason, you just align with, you know, philosophically and can develop a bond with, I think is probably going to be your best route.

[00:47:03] So I have to ask you, running your own company now, how do you think about your future? I mean, what I love that you've got a learning approach and I think learning mindset and the beginner's mindset, even though you've been in this space for a long time and you've expressed that. But but what is your vision for Mumba? You know, where where do you want this to go and what kind of entrepreneurs? If somebody is out there listening, would you love to have reach out to your company? Yeah. No, thank you for asking that.

[00:47:32] Listen, the identifying the part of the market that we operate in. I mean, I didn't invent this. I didn't come up with this. I'm not the first investor to identify that this is a very attractive part of the software universe. There have been many firms, many great investors that have essentially had the same exact investment profile that we have at Mumba. And they've been successful by and large. Many of them have.

[00:47:59] And through their success, they've been able to attract a tremendous amount of capital and they raise bigger funds. And as they raise those bigger funds, build bigger teams, they vacate the opportunity that has attracted our team to this end of the market. And so I endeavor to stay in this part of the market. So right now we're entrance in this part of the market. I'd like to be elite, world class in this end of the market by funds three, four or five.

[00:48:29] I love working with the size of company that we work with and partner with and really work for. And I love the types of problems that these companies have that we can at least, you know, do our best to help solve. You know, I don't know like I don't know what it's like to be on a public company board. You do. But my guess would be that I probably wouldn't be as interested in being a public company board member, probably wouldn't be effective at all in that seat.

[00:48:57] And so I'd like to, you know, build a firm that sustains over time and is really just laser focused on helping founders that have chosen to scale their business in a very conventional way through bootstrapping. You know, the plug. So if there are any entrepreneurs that are out there listening, I mean, we do our best with founder owned businesses, software companies that are growing quickly. They are profitable.

[00:49:27] They don't need our capital. There's actually no good reason that they would raise their hand and say, hey, I want to talk to Jake about raising money. But usually there's something that happens within the business. There's either an initiative that they want to fund. There's they're entering a stretch where they'd love to have a partner help them navigate, you know, the waters ahead, so to speak. Maybe they want to acquire a competitor. Maybe they want liquidity.

[00:49:53] You know, I mean, a lot of these founders that we partner with are, you know, young parents. And they look at the cost of college and they say, gosh, you know, this business is worth a lot on paper. But, you know, it'd be nice to, you know, own my house and be able to pay for college. I can send them to, you know, University of Tampa. And that's the catalyst for raising money. And so we want to have conversations with those founders that are totally in the driver's seat and are just picking their head up.

[00:50:20] They're curious about what it could look like if they were to work with a firm like ours and be one of a very few number of companies in a fund, really get some focus and attention that they wouldn't get with a traditional venture firm. Yeah, that's great. And, you know, I love the focus because I think that's where you can get the real power and bring the real value. Because like you pointed out, you've seen, you know, you understand this space and you're endeavoring to understand it even more. And I love that.

[00:50:49] I love your humility, too. You know, it's I think I'm a big fan of humility and people who recognize that they're still learning. I learn every day. And that's one reason I love doing this podcast. I learn from you. I learn from everybody that I meet. And I've been doing this a long time. But, you know, I think keeping that beginner's mindset. And it's just so refreshing to have to talk to an investor who has that. So, you know, I'm not saying that all of them, that there aren't a lot of others that do.

[00:51:20] But I love your approach and your attitude and the fact that you want to make a difference. So I think that's that's really admirable. And, you know, it does make a huge difference in these companies and in the lives of these founders when they find the right investors, because you can help guide them to the next round as well, which is also, I think, powerful if they want to keep growing. For sure. Yeah, there's no doubt about it. And that's kind of what we're here to do.

[00:51:47] I mean, that's what entrepreneurs should expect from us, you know. And again, I mean, there are things that we do in service of the founders. And that's the easy stuff, you know, and we're happy to do it. Well, that's awesome. So, Jake, I always ask my guests if they had one piece of advice for entrepreneurs out there who are either aspiring or already building companies. What would that one piece of advice be? Yeah, gosh.

[00:52:16] You know, for entrepreneurs, I would say the following. I think really paying attention to the problem that you're solving and specifically hearing from your customers what that problem is. Like, exactly, like, talking to as many customers, as many prospective customers as you can. As you're building your business, could be a product that's serviced, like, doesn't have to be a software company. Could be anything.

[00:52:44] But, like, really, really understanding someone's pain and then doing whatever you can to, as simply as you possibly can, and in a transparent way, solve that problem, you know, better than the next company. If you just focus squarely on that, I think you'll do fine as an entrepreneur, you know, like, really keep it simple.

[00:53:07] But at the end of the day, all the great businesses certainly that I've seen have been ones that have just absolutely delighted the person who is, you know, logs into a solution or, you know, uses a product or service. And so, you know, it starts with a customer who, you know, no one wants to spend money on stuff, but they do it to solve any number of specific needs.

[00:53:32] And so, start there, become the expert at the problem, help solve it simply, transparently, authentically, and you'll probably be good to go doing whatever you're doing. I think that's fantastic advice. If you always keep going back to that problem, you're going to find your way, and I think that's great advice. So, Jake, this has been a delight. I've loved talking to you and enjoyed meeting you. And if our guests or our listeners would like to find you or find out more about Mumbo, where can they do that?

[00:54:02] Yeah, sure. So, LinkedIn's probably the best way to do that. So, you know, feel free to reach out to me on LinkedIn. It's just Jake Colignazi. And, you know, mambagrowth.com is our website. As you know, we're under a year old. So, you know, give us a break. But it's, you know, it's up and running so far. But, you know, feel free to reach out on LinkedIn, and I would be glad to have conversations with anyone. Thank you, Jake. Appreciate you joining me today. It's been a delight. Yeah, likewise. Thanks for having me, Rebecca.

[00:54:31] Okay, well, that wraps our conversation with Jake Colignazi. Three lessons to take with you. First, seek out smart money. Investors who bring experience, networks, and operational support. Second, don't underestimate the power of bootstrapping and scarcity. They sharpen your focus and innovation muscles.

[00:55:00] Third, be intentional about your board. Pick members who contribute strategy, connections, and real-world value. Thanks for listening. Head on over to the InFactor to share your takeaways. And we'll see you next time.