A Letter from John Shumate, our Chief Executive Officer
June, 2020
Our Firm and Our Belief
First, thanks for checking out our web site and learning a bit more about our firm. I hope what you see here reflects my perspective, which is that we have built a team of the some of the sharpest financial minds across the country. As we’ve grown from 1 to 30, we’ve built a culture that promotes a partnership mindset, where our financial services enable an ecosystem that combines venture-stage and mature companies to like-minded entrepreneurs and investors.
From virtual CFO services to complex capital management, we provide an array of financial services to a portfolio that ranges from high-tech start-ups to craft whiskey distillers to established healthcare firms. I’m proud of the team we’ve assembled over the past 10 years, and I’d put our financial expertise up against any firm out there. I love the speed and agility that a firm of our size affords our clients.
Just as you are selective of the companies and individuals with whom you work, we also think carefully about what makes a great long-term partnership. At Venture First, we think of ourselves as the “anti-investment bankers.” We’re not here to pimp out your company for a quick buck. If you’re looking for someone to raise money, take a fee and peace out, then we’re not your group.
We’ve tried that model in the past and it never (not once) turns out well. In my experience, some entrepreneurs go on a spending spree, overlooking major risk factors that an objective financial partner can predict. Some newly funded firms lack accurate forecasting and don’t properly communicate with their investors. Many mature firms don’t adequately prepare for ownership transitions to maximize their return. Then when times get tough, their stakeholders are left scrambling to bail them out. In the worst cases, the company goes under, and in the best, they are forced to sell prematurely.
These are just a few of the reasons why we look for long-term partners. We charge below market cash fees for our services and include long-term equity or bonus incentives for complete alignment. In our experience, this is how winning teams are formed and long-term alliances are established.
Current Landscape
Covid-19 has proven that we must continue to be prudent and regulate risk in a reasonable manner. Most importantly, we should stay calm. All sorts of dumb decisions ensue form the unknown and unwarranted hysteria and, frankly, it’s just not helpful.
In early March, Venture First went to work on behalf of our partner to help mitigate their financial risk. I’m proud to say many of our clients were in position to apply for and did receive their PPP and EDIL funds well before others. And even given the early market shifts, we still managed to close debt and equity transactions on behalf of our partners with little adjustment. We did not run for the exits, and advised our partners to weather this storm as well. As Warren Buffet has said, it’s wise to be “fearful when others are greedy and greedy when others are fearful.” This has been an amazing chance for entrepreneurs to take advantage of their competitors’ weaknesses and for investors to drive bargains. Venture First will remain a strong partner during these times to help both companies and investors alike navigate the current landscape of risk and opportunity.
Opportunities Abound
As we have watched our markets rise and fall these past several months, I continue to believe there are many good buying opportunities right now, whether in the public or private markets. There are opportunities to borrow inexpensively and to buy some pubic equities at a significant discount to long-term valuation. The public markets will likely continue to experience volatility in the coming months before settling down. The private markets, however, will likely experience less volatility, but are still ripe with opportunity. As large banks take a conservative tact with their balance sheets, lending will likely dry up for good private companies, bringing great private lending opportunities to the forefront for private lenders. Well-managed ventures are no stranger to managing risk and may have opportunities available that they didn’t have before.
Every time I’ve gone through a negative life event, it has opened up new opportunity that wasn’t there before. I like to believe that our team, our clients, and our investor community are moving forward intelligently with a measured-but-opportunistic tilt. If our firm in any way can be helpful to yours, please don’t hesitate to give us a shout.
John Shumate, CEO
Nearly 10 years ago, at the age of 28, CEO John Shumate was diagnosed with Stage 4b Hodgkin’s Lymphoma. At the time of diagnosis John was working for Louisville-based PE firm, Blue Equity. He remembers thinking that no matter what time he had left he wanted to work on projects that were interesting, innovative and just have fun doing it.
Immediately upon diagnosis, John moved to Houston for treatment. Because he was unable to meet or travel, he began picking up equity and derivative valuations for VC’s with technology and health care companies. The work was interesting and challenging. Eventually, as he began feeling better and started hiring more help, Venture First was born. Today, VF has over 30 employees across the country.
John often compares finding the right clinical trials and treatment regimens to nearly reverse his diagnosis, to building a start-up. You power through research, find the best trials, get in front of the right doctors to apply, and basically build your own treatment plan because it’s never been done before. And he’s quick to add that you need to get a little bit lucky too.
In nearly ten years, John has had 15 treatments, 11 of which were clinical trials, a stem cell transplant and a round of radiation. He is one of the few people in the world to build this treatment approach.
“You never know what’s around the next corner, but I’m confident that I will continue to do battle and win. I’m proud of our company, and the work that we do. We are helping all types of businesses in all types of industries wake up and fight their fight every day too.”