Cap Tables to VCs to Forensic Accountants

Jon’s startup experiences span a few decades ... from boardrooms, term sheets, and cap tables ... to Tier 1 VCs, small VCs, strategic investors, and a few hundred angel investors ... to debt agreements, warrants, re-caps, and convertible notes. He’s been involved with complete failures, walking-dead entities, and multi-million dollar wins ... with forensic accountants, dozens of lawyers, and phenomenal entrepreneurs. He says that many experiences have blossomed into beautiful stories. Some haven't.

Investing

Beyond current investments in startups like Yottaa and Platform9, and Iterate’s stakes in Bluecore and Attentive, Jon’s a small Limited Partner (LP) in LeadEdgeCapital.com which manages about $2 billion in assets and invests in growth-stage software, internet, and consumer pre-IPO businesses like Spotify, Toast, Algolia, Boxed, Bla Bla Car, Uber, and Alibaba. When at eBags, Jon diversified his personal finances by swapping eBags' stock for equity in startups like OpenTable, LifeLock, Digg, Solazyme, BitTorrent, Motricity, and Kosmix as part of a founders' stock exchange fund. As an angel, he’s invested in startups that exited a variety of ways ... including A/B testing optimizer Clearhead (acquired by Accenture, 2017), BazaarVoice (prior to its 2012 IPO), Swiftpage (prior to an Accel-KKR investment; acquired in 2018), RedTricycle (acquired 2020), and Verblio.com (exit 2014).

Advising

In addition to direct startup investments, since 2008 he has been an advisor to many startups. A few examples:

He joined TurnTo.com in 2010 when it was just a few people. It bootstrapped profitably to 80 employees. Pixlee eventually joined TurnTo and TurnTo’s founder became the CEO of the combined company.

Runa made Jon chairman of its advisory board. After developing personalization algorithms for real-time offers, delivery estimates, and free shipping offers for clients like eBay, Runa was acquired in 2013 and it became Staples' Silicon Valley-based Innovation Lab.

Between 2009 and 2013, Jon volunteered with and advised dozens of startups from TechStars (Boulder), Founder Institute (Palo Alto), and a top Eastern European Accelerator based in Kyiv, Ukraine where he was a Board Member in 2011, 2012, and 2013.

Volunteering

As explained by Brad Feld Jon helped Adeo Ressi start Colorado's Chapter of Founder Institute (FI) in 2010. As of 2020, FI operated in 225 cities and has a portfolio of 4,500+ startups.

A decade earlier, Jon started a series of day-long seminars called "Startup Basecamp" in Denver with Joyce Colson. The purpose was to help early-stage founders prevent hidden pitfalls. Friends like Steve Papa (founder of Endeca which Oracle bought for $1.1 billion) and Josh James (founder of Omniture which IPO'd before a $1.8 billion Oracle acquisition) spoke at these events ... as did evangelists and VCs including Guy Kawasaki and Brad Feld. All of them volunteered to help new founders navigate the startup world when it was opaque -- prior to the transparency provided by Linkedin where you can meet anyone.

For years, Jon sat on non-profit boards for the Deming Center of Entrepreneurship at CU Boulder and the Colorado Technology Association which recognized Jon with a Lifetime Achievement Award.

M&A

Exits for eBags.com (to Samsonite) and 6PM.com (to Zappos) have given Jon hands-on experience. With eBags.com, Jon was involved in multiple serious exit discussions with top-tier Internet acquirers. Its $105 million exit to Samsonite was both good and bad. The good: very few companies achieve a $100 million exit (about 50 per year, nationally), and eBags’ early investors achieved strong returns. The bad: eBags turned away from interesting opportunities early on. Lessons learned.

Jon’s also been involved in M&A activities as an advisor. While Iterate keeps a lot of this work private, Iterate has helped a number of Enterprises with startup evaluations, partnerships, and acquisitions. For instance, Iterate helped Ulta Beauty acquire GlamSt (AR startup from Uruguay) and QM Scientific (AI startup from Silicon Valley) in late 2018.

One aspect of M&A that fascinates Jon is the value an acquisition provides to an enterprise post-purchase. He’s seen complete disasters and big wins. Exposure to both ends of the spectrum has made him opinionated about ways an enterprise can formulate a winning M&A journey.

Booms

Iterate's been exciting -- 286% growth between 2017 and 2020. It’s achieved a revenue level that 0.06% of startups achieve in their first six years. While Iterate has raised some capital, the amount is relatively small and from angels. By the end of 2022, Iterate’s revenues should exceed the money raised by more than 5X. Iterate’s mostly bootstrapped (by doing consulting work) to 65 people (2021). No board seats are occupied by outsiders. This is similar to how BodyBuilding.com and Omniture got their starts and Jon’s view is that this construct has kept Iterate’s decision-making fast and flexible (entrepreneurial).

Over the years, Jon became work-friends with many founders before their companies employed a dozen people -- and in a few cases before the startups were named -- Endeca, Omniture, Shopify), Magento, Zulily (pre-name), Shoprunner, LiveClicker, Bluecore, AllPosters (when the founder still worked from his bedroom and drove a Gremlin), BodyBuilding.com, and BazaarVoice (pre-name), to name a few. All of those "boomed". One of Jon’s stories involves meeting Shopify’s founder, Tobi Lutke, before it had raised capital. At that time, in January 2009, it had fewer than 5,000 small customers (now it has 1.2 million), Tobi was trying to figure out how (and if) to raise money, and he was still emailing from his @jadedpixel email address.

eBags lived through booms and busts -- and it survived all the busts. It lived through the dot-bomb, the terrorist attacks (which crippled travel and luggage sales), and the 2008 recession.

Busts

On the downside, Jon has witnessed startup disasters. He’s been on the losing side of a $1 million theft which required Jon to testify in court and landed a "founder" in prison with a 10-year sentence. He's watched two founders have their businesses "foreclosed on" due to debt issues. He’s also been in a five-month boardroom tiff that he initiated -- costing about $365,000 for just his personal legal representation. So, he’s learned (the hard way) that entrepreneurship is the real deal -- it's not child's play. But, it's also the losses and mistakes that build character and wisdom.

In The End

Jon’s love of startups, leaders, creators, and entrepreneurs -- his love of the fluid creation process -- his love of making positive impacts on people and companies -- and his love of the neverending pursuit of progress -- are what gets Jon going every day. And, those who know him will tell you that he drinks too much coffee, and that keeps him going, too.