Why I'm Leaving a VC Firm to Work for Free
When I was a college senior in 1991, I was in the enviable position of having pretty good job prospects. I worked part-time for IBM and they wanted me full-time after graduating, and I also had interest from some small tech startups. But, that just wasn’t the path for me. I knew I wanted something different -- more adventurous, more impactful. I wanted to build a life, not just a career and a bank account.
So, I joined the Peace Corps. Some friends and colleagues questioned my sanity, but others got it. I went on to do small business development in Central America where I learned a ton about myself, about business and how fortunate I am and most of us are in this country. I gave a little and gained a lot, all while being paid a whopping $200 a month.
This became one of the most significant and defining experiences of my life. Occasionally, I wonder what I would have gone on to do perhaps in the tech world, but it’s also vividly clear to me what I would have missed out on, meeting my amazing wife, Maura, having our beautiful girls, and starting ZICO Coconut Water among them. Since scaling and selling ZICO to The Coca-Cola Company, I went on to become a venture capitalist as a founding partner at Powerplant Ventures (PPV), and we’ve invested in some incredible companies that are revolutionizing the multitrillion-dollar food system.
PPV 1 is now fully deployed and we’re poised to continue doing this for years to come with follow-on funds. Yet, as I have this opportunity in front of me, I feel like I’m 22 years old again: walking away from a likely long, exciting, lucrative third career as a venture capitalist for a new adventure. Some friends and associates think I’m nuts. Others are supportive and excited.
I have joined Beanfield Snacks as its CEO, and I will not be taking a salary.
Sounds crazy, I know. But, similar to what I saw in the beverage industry in 2003, the salty snack industry is ripe for disruption: It’s a massive, multibillion-dollar market, with a few entrenched players, not delivering the real health and nutrition consumers want and need.
Powerplant Ventures, alongside media investor, Bruce Friedman, and a group of others, invested in Beanfields earlier this year. The founder of Beanfields, Reed Glidden, was ready to step out of day-to-day operations and I intended to serve as co-chairman of the board. After the funding closed, I became more and more excited about the company and especially the opportunity to structure and manage the partnership we established with Homeboy Industries, the largest gang intervention, rehabilitation and re-entry program in the world, founded by Reverand Greg Boyle. This partnership was my brainchild, and I woke up one day knowing that I wanted to be the one to execute it.
I’ve long been an admirer of the work of Homeboy Industries and wanted to find a way to put to the test all that I believe in, have learned, and have spoken and written about to create a new business model with built-in social impact. After looking at 500 deals a year for the last three years, I found what I was looking for in Beanfields.
With Beanfields I see an opportunity for a successful, scalable business that addresses a major issue in our food system, but one that also creates a sustainable source of funding and hopefully job opportunities for individuals that need it.
I know what you’re thinking: “Sounds great! But, why are you not taking a salary?”
No salary. No Bonus. No equity.
Fortunately, I can afford to do this. This opportunity was too close to my heart and I don’t want money to cloud my thinking about what this is really about.
What Boyle and his team do with young men and women after they’ve been in gangs or jail or prison is incredible. And it works. I made some bad choices early in my life that could have landed me in a similar situation, if I was a person of color or poor or born in a different place or time. I don’t know how to do what Boyle and team do at Homeboy. I don’t know how to reform the criminal justice system or change drug laws. I do know, however, how to scale businesses, particularly in natural food. That is how I can contribute.
So, how will this work?
Homeboy will own at least 5 percent of Beanfields, and potentially up to 10 percent, after the investors get their money back. Beanfields will also give 1 percent of all sales to Homeboy, all Beanfields employees will give 1 percent of time to support Homeboy and we’re going to try to create jobs for graduates of Homeboy programs.
I remain 100 percent committed to making the first Powerplant Ventures fund a success. I love the mission, my partners and the companies we’ve chosen to work with and will do everything I can to help them win. I’m on the boards of two companies and will continue to serve in those roles. But, aside from that, my time will be focused on Beanfields, which as a portfolio company for Powerplant is of course very important to us as well.
While my decision to work for free may not be relatable to many people, I think the model could be. As entrepreneurs, of course profit is important. However, what if you could create a built-in social impact model for your company? What if that could help your business be even more successful? If we can prove this out with Beanfields and Homeboy, I think it could work with many companies and non-profits.
How do I feel?
I’m excited, energized but a little nervous, too. I know a lot more than I did in 2004 when I started ZICO, but past performance is no indication of future success. I’m a good entrepreneur, but there are lots of incredible entrepreneurs out there. The food industry is just as brutally competitive as beverages.
But, that is what it is, and all I can do is dive in and give it my all. After that, I have no idea what’s next. I’ve learned non-attachment to the outcome works for me personally. Set off with good intentions, surround yourself with great people, do good work and let the rest take care of itself.
I believe in the scientific method: Start with a question. Make a hypothesis. Test, analyze, draw conclusions and share with peers to let them tear it apart, replicate or build upon it. In that vein, over the coming months I intend to share our playbook: what we’re doing and why, what works and what doesn’t, and what it’s like for me personally trying to get it all done. In this way, I hope others can critique, learn and improve on what we’re doing. Maybe they’ll compete and beat us in the marketplace; so be it. We’ve got a lot of work to do, and I hope many of you will be as competitive about building businesses that win for everyone they touch as much as winning by the typical bottom line. If we achieve that, working for free might be another of those great decisions of my life.