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Adventure Capital
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Chris Van Dusen is a senior partner at CECO Capital, a venture capital firm specializing in scaling and exiting businesses. Based in Huntington Beach, California, Chris has a diverse background in construction equipment rentals, real estate investment, marketing, and entrepreneurship. He has a unique and uncommon journey that includes leading roles in successful startups, such as a CBD company that was eventually sold for $75 million. Chris is also a co-founder of a liquor distillery and an experienced Brazilian Jiu Jitsu practitioner and instructor.
In this engaging episode of the Uncommon Wealth Podcast, host Phillip Ramsey sits down with Chris Van Dusen, a venture capitalist with a truly uncommon path to success. Chris Van Dusen shares his dynamic story, spanning from his beginnings in Connecticut and an unexpected transition from collegiate baseball to economics, all the way to becoming a key partner at CECO Capital. Chris’s unique insights into venture capital, business scaling, and strategic exits are captivating, offering listeners both inspiration and practical lessons.
Chris delves into the characteristics that define a promising business venture and the importance of investing in people who have previous entrepreneurial experience. He highlights the advantages of CECO Capital’s distinctive model, where partners play an active role in scaling businesses and improving operational efficiency. By sharing anecdotes from his diverse career, including successful business exits and his ventures into the CBD and liquor industries, Chris provides a vivid illustration of what it means to lead an uncommon and impactful professional life. His blend of venture acumen and hands-on experience sets the stage for understanding the complexities of today’s entrepreneurial and investment landscape.
Key Takeaways:
- CECO Capital's unique model involves active participation through management consulting to drive operational efficiency in early-stage companies.
- Identifying great companies begins with finding exceptional people who understand the entrepreneurial journey and have relevant experience.
- The importance of balance between managing lifestyle businesses and scaling those with significant growth potential.
- Chris’s transition from various industries to venture capital highlights a non-linear but richly rewarding career path.
- The significance of aligning interests between venture capitalists and entrepreneurs to achieve successful outcomes.
Notable Quotes:
- "The entrepreneurial journey has been romanticized over the years, but it is extremely difficult."
- "I made the joke, put away my rusty toolkit and join an established firm."
- "Really what it came down to is understanding human incentive around one singular thing."
- "If you've done it before...that is of interest to start."
- "The world's a better place when old men plant trees whose shade they will never enjoy"
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Transcript
Introduction to The Uncommon Wealth Podcast
00:00:00
Speaker
Everyone dreams of living an uncommon life and the best asset you have to achieve your dreams is you. Welcome to the Uncommon Wealth Podcast. We're going to introduce you to people who are living uncommonly. We're also going to give you some tools and strategies for building wealth and for pursuing an uncommon path that is uniquely right for you.
00:00:26
Speaker
Hello and welcome everybody to another episode of the Uncomma Wealth Podcast, where I'm your host, Phillip Ramsey. Today we have an amazing guest with us. The reason why I want him on the show is because he knows venture capital, he knows how to scale businesses, and he knows how to exit businesses. You know what I'm saying? That's why I want him on the show. And if you're the first time listening because of my guest, welcome. I'm excited
Meet Chris Van Dusen: From Baseball to Venture Partner
00:00:45
Speaker
to get him on the show. Chris Van Dusen. Welcome to the show, my man. Thank you very much for having me. I'm excited. Yeah, man. So grateful just to, get some time with you. I'd love to hear about, I mean, you're a senior partner at your company. yeah I want to unpack your background, ah but you do have an uncommon life. You do love it. And those are kind of like the two priorities when I try to get a guest on is like, do they love their life and do they they enjoy what they're doing? And are they using their experience to impact others? And so that's what you're doing. That would be uncommon to me. So tell us about your company. Tell us a little bit ah how you got to where you're at. And then I'm sure I have a couple other questions. Let's be honest, Chris.
00:01:24
Speaker
I love it. Phil, thanks again for having me. So Chris Van Dusen, I'm with a firm called Celico Capital, headquartered out of Rochester, Michigan. We have offices in Dallas, Louisville, Miami, and then I live actually in Southern California in Huntington Beach. I joined the firm two and a half years ago. ah That was January of 22. But before that, I've had a very, what I call, non-linear way to get to be a partner at a venture firm.
00:01:53
Speaker
You get in bonus points if you say uncommon, you know, so you have an uncommon person. Yeah, there you go. I have an uncommon way. I've not met another one with my with my unique story, let's just say. So I grew up in Connecticut.
00:02:09
Speaker
Played baseball at a fairly high level. of I played in college. Pitcher. You were pitcher. Pitcher. Got hurt two years in. a Sophomore year. Needed Tommy Johns. Decided to hang up the cleats. Cool thing about it is they can't kick you out of college if you get hurt. So I yeah graduated from the College of William & Mary in Virginia with a degree in economics. i saw Even in our pre-show discussion,
00:02:35
Speaker
you might have been able to tell probably for me sitting behind a cubicle um being an analyst with an econ degree was not going to be my path. So I graduated from college in 03, continued to bartend, um and then got a job at this company called United Rentals, renting and selling construction equipment.
00:02:55
Speaker
honestly still one of the best jobs and really what it came down to is understanding human incentive around one singular thing and here's what I mean. It's one piece of iron and you're having conversations with you know someone working on that piece of iron and what they need for their job and someone who owns a four billion dollar multi-state development construction company.
00:03:19
Speaker
and what they need from that same piece. And so it was this great education, I call it for a few years. And then I'll call it the family business, but my dad had been a wholesaler for, he retired, I think, 46, 47 years doing it. doing it um But he used to work for this this company in, and I think it was Newport Beach at the time, a real estate investment firm. And the old president after Emerger started a sponsor firm in in Richmond, and I met him,
00:03:47
Speaker
and I remember talking to him, he was going to start doing real estate. This was before our big real estate crisis that happened. and He spins up this firm and I joined after passing my Series 7 in 63, which but I had six weeks to take. if i that its own thing let's see yeah It wasn't much mean it was be much of a story if I didn't pass, but the point is I i got my Series 7 63 and then spent the next few years running the road on the East Coast doing mezzanine debt and growth and income funds for grocery anchor
Navigating Real Estate in a Tough Economy
00:04:20
Speaker
shopping centers. and Just grinding. Trying to sell real estate products in arguably one of the hardest times to get real estate.
00:04:30
Speaker
And so one of my large clients at the time brought me out to California at the end of 2009. And due to what we were just talking about this real estate crisis, they ended up having some trouble. And I'm marooned now out in Newport Beach at the beginning of 2010. And why I say marooned is they decided they didn't need all the people they had brought in. So I was now unemployed in Newport Beach.
00:04:53
Speaker
yeah awesome ye for no bills at all You have no bills you have to take care of. Are you married at this time? Not married at the time, but I did meet my wife a month after it happened. We ended up starting our first company four months into dating, and we've been at it ever since. so There again is a very uncommon story. When I met her, she was head of business development marketing at a law firm and she started her own ah consulting firm in 2013 after we we got married. and Then I started my own agency in 2015. Now, the original company we started together was a consulting firm. um you know The novel idea was my shtick, if you will, when I was out on the road, what made me different than, as I mentioned, selling against my father in the Northeast, who had all the relationships in the world, was I was the data guy. I had the data at my fingertips, and this was right at the time the iPad came out.
00:05:48
Speaker
And so you think about you have this new revolutionary glass tablet with all the information you could ever want. How do you use it more effectively on the road for for people who spend all their time? right And that was something that wasn't as commonplace as it is today. I remember it.
00:06:05
Speaker
I had my act database with all my contacts and i had a computer mounted in the truck and now you had it all in this little glass that you can sit down with someone and walk through very visually and so i was we were building custom applications and we were building strategies for what really ended up becoming or all of my old either ah clients or my old competitors in the real estate investment banking.
00:06:27
Speaker
so Anyway, did that for years. and Then in 2015, I started my own marketing agency, which was really focused around conversion rate optimization and high intent media buy. I use the analogy, everyone likes to focus if you fish. right I don't fish, but I just i guess I can understand a little bit. If you look at the rod and the reel and the bait, that's what most people think about. right How am I going to generate leads for my business or how am I going to generate revenue?
00:06:55
Speaker
What no one really at the time, this is 2015, was focused on was the net. And think about that, right? Like you can go get them on the hook, but how are you converting? And then that really was the actual websites. We did a lot with what they call digitally native vertical brands, right? Which are brands that start and really grow and scale online. And so we worked with Travis Matthew, we worked with Experian and a whole bunch of these big companies working really on the net, right? How to, if we drove a hundred people instead of two making an action for meaningful things in their business just by doing that. It's a big deal.
00:07:32
Speaker
And so that was 2015. And then beginning in 2017, I was introduced to these five guys through mutual friend who had just started a CBD company.
Scaling a CBD Company Globally
00:07:44
Speaker
Are you familiar with CBD? Yeah. I mean, not as much as you are, but yeah, I get it. That was the time. The gold rush for CBD. go You know, it's funny because it's almost ubiquitous now. You can find it in gas station or Walgreens and buy it online. The end of 16, early 17, it wasn't like that, right? This was post the first farm bill, but before Trump in 18 pushed the second farm bill.
00:08:07
Speaker
And so it was this kind of gray area. But we scaled that business in two and a half years to 120 employees. We were in 17 countries. We had a manufacturing facility, you know large office space. ah We're the second largest brand in the world behind Charlottesville. And it was an amazing opportunity. I say I got a master's degree in parabolic scale, right? I bet. Because the majority of those sales were um online.
00:08:34
Speaker
And so if you think about the throughput of doing, you know, 50 plus million dollars worth of sales of 80, 90 dollars a pop, like that's a very fast time to grow. ah And COVID hits.
00:08:51
Speaker
And I will tell you, start learning about discretionary spending during that time. Oh, man, it goes up. Well, not necessarily around health. Here's um here's why I'll give you the corollary. You've heard about the health boom. But when you look at why people take CBD a lot of the times, it was around things like, you know, acute pain after working out or to help you sleep or to keep you home. And when you can sit like a crumpled piece of laundry on the couch all the time, go to work. You bring your kids to school, it changes their focus on spend. And the the interesting thing was, you know, this company started in 17, we ended up selling it at the end of 21, August of 21. It's a publicly traded company. And this is all public record. We sold for 75 million. um And at the same time, we were doing a CBD. paul Can we pause real quick? Yeah, for sure. sorry
00:09:54
Speaker
I could hear people coming in. I apologize to the sorry to the house I'm at. I didn't want to be allowed. ah So at the same time, my wife and I co-founded a liquor distillery in Huntington Beach called Surf City Still Works. ah
Launching Surf City Still Works
00:10:08
Speaker
It was great. We took this model. We did vodka, gin, bourbon, rum, canned cocktails, spiked seltzers.
00:10:14
Speaker
Now, to your original question of, did it go up? Sales in there went up dramatically. ah A lot of places were closed where you would normally do it, but I go back to the crumpled piece of laundry. You can have one or two more drinks. Right. Man, that's fascinating. So you watched, you could see the seesaw happening with what was actually going up on discretionary spending during this time, and a lot of it went alcohol and cannabis.
00:10:42
Speaker
Wow. Unbelievable. People celebrate. We are so sorry. When people celebrate, they drink and when they drown their sorrows, they drink and everything in between. So it's interesting. you they're Liquor distilleries or anything in the alcohol space in general is pretty recessionary proof. It's quite interesting. Right. Because then people get depressed and they just drink more liquor. Yeah. Exactly. So we should sad i now we started that in 2018, sold it in 21. And then my wife and I had another exit in 2019 around a beauty care brand in the CBD space. And then also at that time, I raised two funds in the cannabis space all around picks and shovels. ERP systems, FinServe, analytics companies, all things that didn't touch underlying commodity. um Because state by state commodity pricing is its own beautiful thing. Oh, man, I can only imagine. And so, yeah, so last exit 21.
Inside Celico Capital's Venture Capital Approach
00:11:40
Speaker
Back in 2017, I joined this group called Alder. And it's all around generational leadership. There's this great, great proverb that says the world's a better place when old men plant trees who shade they'll never enjoy. And that's what the
00:11:54
Speaker
this whole group is about There's about 300 members across the country. and When I joined in 2017, I met this guy by the name of John Garcia. Now, John, at the time, was just starting this firm called Celico Capital. and so He's starting Celico. I am doing all this crazy stuff I just told you about. right And ah we become friends, we know each other. They were actually an investor in our liquor distillery. And so we just had this great relationship. And after the last exit, we talked and it was a great time for me to jump in and do everything I had been doing over this kind of five-year stretch, right? Investing, due diligence, scaling companies, right? All these roles that are traditional kind of venture partner nodes. Bring those. And I made the joke, bring my Rusty Toolkit and join an established firm.
00:12:42
Speaker
Right. And so firms around since 2017, we are an uncommon venture firm. see what I do ah i like that like that. So there's 11 of the senior partners and we have about 40 staff. um There's really a few of us that have more traditional venture roles and raise capital and find deal flow and do power brokering in between our ecosystem of about 32 companies. But really what sets us apart is we have a management consulting firm.
00:13:09
Speaker
associated with with Seleco called Seleco Advisors and that's really where a lot of our partners and a lot of the the team members both in leadership and staff spend their time. So they go in on secondment we call it right their second job inside of our portfolio companies and help drive operational efficiency during this very formidable time.
00:13:29
Speaker
because we invest in the b round through our sorry this the seed round through B. right If we're going to play the alphabet soup game of what rounds we're focusing on. A lot of times they don't have these robust teams right because they're on the grow. oh theyre and yeah They're in the garage.
00:13:46
Speaker
yeah right And so we'll come in as XCOOs, myself being an ex-chief revenue officer, or you know we have others that have been CFOs at big you know publicly traded companies, and we need to come in and help bring that operational rigor or come bring um our expertise or our ability to help scale very early on.
00:14:05
Speaker
And that is very different than what traditional venture does. And you know I won't run on a platform that says poo poo to venture, but interests aren't always aligned right in traditional venture. And so we're in helping founders. And for us, we really don't charge a management fee on a lot of our deals right because we don't raise our money on a mandate where we say, OK, we're only going to do AI or we're only going to do industrial manufacturing. So here's $100 million dollar fund, and we're going to charge a management fee. For us, we find great deals.
00:14:34
Speaker
We take investor capital, our capital, we put them in these deals, and then we help scale them. And we get compensated, obviously, for being in and helping these companies. so And then ah we sit shoulder to shoulder with our investors on receiving capital at that time. Right. There's ah actual liquidity events sometime in the future. Right. And then you have ownership in that company. Correct. They've erected the money, the capital. Okay.
00:14:57
Speaker
What are you looking for when you're looking as like a business? You're processing through like, is this a good deal, bad deal? Like, what is a company that you're like, all right, we're in, we're in, like, show me the money. Yeah, it starts with the people, right? I always obviously love and have a bias to someone who's done it before.
00:15:14
Speaker
And the reason I say that is the entrepreneurial journey ah has been romanticized over the years, but it is extremely difficult. And I don't care whether or not, and we won't necessarily invest in these type of companies, but whether or not you're starting a financial planning firm, right? Which you've got your book of business and you want to hang a shingle, that is being an entrepreneur. You don't have to be Mark Zuckerberg to be considered an entrepreneur. right right But when you look, it starts with the people. If you've done it before, if you've gone through Starting raising capital if in fact you needed it operating at a level of efficiency and then finding a home and a sale like if you know that arc and how hard it is.
00:15:57
Speaker
That is of interest to start. So we start with the people. And then number two, we look and say, does this company have the ability to not just be a lifestyle business, but to do something of meaning and size? And what's the path or the difficulty for them? And is is it the right people again to actually execute that? And if the answer is yes, that means there's a good enough return for our investors to consider, right?
00:16:23
Speaker
I would say that the vast majority of our investments are after they've proven there is some product market fit. It's already there. They they need capital to scale, to grow, to put you know fuel to the fire. It's not usually a deal on a whiteboard with an idea saying I need you know the initial amount. It's not a shark tank situation.
00:16:43
Speaker
no so You know, we look at all these things and then we look at the valuation that they're asking for fair compared to what they have moving forward or what they've done already. And if those things start matching, we do a now full due diligence, which is inside the data room, meeting and doing background. I mean, there's a very long checklist we go through before we invest. But the initial, as I'm looking at a dealer, those first questions I just went through, right? Like, do I like and see the vision for this? And then lastly, because I would really consider us ecosystem investors. And what I mean by that is, do we have the ability to impact their growth meaningfully? Like, can we as Seleco do something? Can our portfolio companies do something to help, right? Like, is this a service that if it went in our portfolio companies, they grow all ships as well and us, or you know, and And then lastly, vice versa, right? Can our portfolio companies that we already have in our ecosystem right help these those companies?
00:17:40
Speaker
Right. Yeah. i That's where it goes.
Celico's Non-Majority Investment Strategy
00:17:43
Speaker
fell And so how many times do you step in and you become majority owner? Is that like 90% and I would think that that'd be fairly high. Yeah, no, very low. We are minority investors. A lot of times we'll end up over time becoming a major minority, right? okay Usually the largest shareholder other than the founders minority minority. We're not going to get into the over 51. Everything I look at is, and traditionally the way my brain works is the supply chain, right? So we are one part of the supply chain, but there are bigger fish or there are private equity firms that will specialize in this. And that's part of our path to liquidity is going from, we've helped shepherd it to this level. And now someone else wants it for whatever reason, right? That's meaningful to them and want to take that majority. And that creates a liquidity event for our investors.
00:18:34
Speaker
Oh, OK. Interesting. OK, so let's describe a time where this has gone poorly. I think you jump into a company and you're like, oh, heavens, what did we just buy? And you talk about that. I don't know. You know.
00:18:50
Speaker
Here's where we're different in a lot of ways is that, um and this is a gross generalization, right? But a lot of funds, right? Both in venture, even private equity, you name it, run on portfolio theory. So they've pretty baked in a portion of their assets inside the fund are going to fail. yep And also when you look at the economics of venture firms, it's just a probability of it. Yeah, exactly. But they the, when you look at the economics of venture firms, a lot of times,
00:19:19
Speaker
They're living off of those management fees, so they'll raise $100 million, maybe $2 million dollars a year in management fees. So you have a couple of GPs, right? You're a couple ah individuals in the firm and maybe a few staff. So they can't go and spend all their time in this one company that might be going sideways. right For us, because we're structured different, if something's going on sideways and we know how to fix it, we have the ability to jump in. And a lot of times we've already been so close that we can see over the horizon a little bit sooner to see things are starting to go sideways and then come in with capital, with resources, with talent to help steer that ship back. ah very And that's where that's the the model differentiator helps very much.
00:20:06
Speaker
make it so we don't have to. deal deals down or or anything like that. We have longer time horizons to be able to be successful. right That's cool. and Then what does your wife do currently? so In 2012, she started a consulting firm, as I mentioned. In 2018, I was in Denver four days a week growing the CBD company, coming home, spending time with at the distillery, and I had my agency that really um I was not doing the best job leading.
00:20:38
Speaker
yeah I mean, merge those two together and she's the managing partner and the agency's called parkong.com. um I like these funny names that don't mean anything. I hear them, yeah. Like Celico, as I mentioned, the story is, you know, a couple letters of the two genus and species named for tomato. One of the partners, ah Very early on, we'd have these really complex ah ideas for companies come in from these founders who are just extremely bright. And he would look at them and go, sell me it? Like you're selling me a tomato at the Eastern market, which is interesting. Yeah, right. Like how to it's simple.
00:21:17
Speaker
That's really what the idea is, like make it simple. And so that's what became so like a capital, not simple capital. Right. But so like, so like, uh, and park on is no crap backwards. Ah, nice. Okay. Do you want big dog and ponies? There's other age haircuts that will take your money to make big fancy. Yeah. go do and I don't know what it is about my personality, but I have a ton of marketing friends. Maybe I missed my calling man, but definitely that's awesome. Yeah. not We have a nine year old daughter as well. Nice. Great, which is wonderful. And then, yeah, hobby wise, I was telling you earlier, I play a little golf because that's just so much you do. you get you get That's common base. You're basic. Let's go move on. But jujitsu, that's different. and teach Brazilian jiu-jitsu. And I will tell you, I've met a lot of people in finance and venture, and there are not a lot of people who get up and enjoy that level of physicality during the day. But I will tell you, it absolutely changed my life. Love it very much. wow You do it about eight years.
00:22:26
Speaker
um So what's the the future for you? Like you've obviously had a couple successful, you know, exits. You just jump into this firm, your wife's doing the deal. Like what's your future? Is this is this it? like Or they'll probably have some kind of sell out and figure out the next thing.
00:22:42
Speaker
Yeah, you know, um this, if everything works out the way I have designed it in my head, ah this is the last stop on
Chris Van Dusen's Entrepreneurial Vision
00:22:52
Speaker
the train, right? Like this is where I go because it's all the things I enjoy doing. And what's great is I mentioned we have 32 companies in our portfolio. Over the years, these companies will be sold, they will transition, but along the way, we'll pick up more. So the idea of being part of these the entrepreneurial journey for other companies, being able to support, in some instances, mentor, in some instances, roll up your sleeves and like really be in there growing, solving problems, getting to hear stories of some of the most, you know, from some of the most unique people about what they want to do to change the world. I mean, that's just fun to be really... Right, right. Do you work for that? Yeah, yeah I'm working, you're paying me? All right. It's fantastic. So, ah you know, doing that right,
00:23:39
Speaker
and we continue to have you know access to capital to continue to invest in more companies, then that just kind of never stops. You just continue being able to to to do that. And that's a really exciting thing, right? Yeah, good. I do travel a lot from a sourcing deal and investor perspective. And maybe that will start slowing down as time goes on, because I don't think 10, 15, 20 years I want to be at that same pace traveling the country. With that said,
00:24:06
Speaker
ah doing the the majority of my role, right? Fundraising, which is capitalization and finding deals and helping these companies. Yeah, I could do that. Hopefully until, until there's no more ability to do it. Definitely an art for it. Because as you grow a company, there is something about it like it's your child in a way, right? And so you don't just want to give your child to anybody. So there's emotions and there's blood, sweat and tears and everything that goes along with that. It's been very interesting on the cases that I've kind of helped with like, okay, you're exiting your business or you're going to now retire. How do you value that? And I would say the overarching theme is you always value it more than what it actually is worth or what the next person is going to pay for it because what yeah. and And honestly, like that makes sense to me.
00:24:56
Speaker
because like a app Think about a house, right? You grew up in the house right or your your children were raised in the home. The memories have this tangible value. right that you almost want to get compensated for, which the market won't bear. yeah that's right That's right. That's a good point. It becomes its hard thing, right? Because of the the personal piece of it. But I would say the people that can do this in an uncommon way
00:25:27
Speaker
It does seem like they have more at the end of the rainbow, even when they sacrifice a little bit more up front. Like, hey, this is the right fit because it's the right person. Therefore, I'm going to discount what I think it's worth in order for this person to step into. It does seem like those people have a little bit more joy.
00:25:44
Speaker
And they're more excited about what it turns into. I can think of a couple examples now of like, holy cow, I didn't know that my child could grow to where it's at now. You know, like you get a look at it from afar and just be admiring that people are different and they're going to run it different. And that's not a bad thing. It's just a different thing. And so I like what you guys are doing. I think it's a really unique model to jump in there and go in the trenches with somebody. And that to me is another reason why I think you're a good fit for the show, because that's what we're doing here at Uncommon Wealth is like, I don't care what your deal is. I don't even care what's in your wallet. What do you want to do with your life? And what do you want to do to make an impact and make it fun for you? If we can get paid for that, like, that's a huge win.
00:26:29
Speaker
And at the end of the day, like we're all trying to impact other people with the experience that we've had to further not only ourselves, but other people. And there's joy in that. So I like the model. um Okay. So if our listeners wanted to hear more about a slave, hello. Yeah. Yeah. Yeah. I'd love it. And I hate it. Let's be honest. yeah You know, it How would they hear more about the company, you, all that? SelecoCapital.com is is a website. um My email directly, see Van Dusen, which I can either put in the notes or or or we can we can add, at SelecoCapital.com. Happy to talk ah to anyone who who would like. ah
00:27:14
Speaker
On LinkedIn, I'm Chris and the Van Dusen. And the reason I say that is I do a lot of thought leadership. I write a lot of different different things. um Great way to get in contact with me as well. Great. Okay. Well, Chris, I appreciate your time today and good luck in the future. I'm grateful just to get to know you and hear a little bit more about your uncommon path. But you've been listening to the Uncommon Wealth Podcast. Till next time, be in common. Thanks for listening.
00:27:48
Speaker
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