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You see it in Chicago. There’s so many funds. St. Louis has has quite a few. And now Minneapolis has some great ones. And the biggest learnings for me were basically following the trends of just where the people were moving and popping up. I mean, the coasts are still epicenters, I think they continuously will be epicenters. Nobody over there is going to tell you that that they’re slowing down; but I do subscribe to the theory that they’ll become less relevant.
Jay Clouse 0:22
The startup investment landscape is changing, and world class companies are being built outside of Silicon Valley. We find them, talk with them, and discuss the upside of investing in them. Welcome to upside. Hello, hello, hello, and welcome to the upside podcast, the first podcast finding upside outside of Silicon Valley. I’m Jay Clouse, and I’m accompanied by my co-host Mr. Quarantine Beard himself, Eric Hornung.
Eric Hornung 1:01
I’m doing it, Jay. I am rocking the beard.
Jay Clouse 1:04
You’re joining the ranks.
Eric Hornung 1:06
Oh yeah, I’m trying. I’m really just doing my best Jay Clouse. That’s what I set out to do. I said quarantines happening. No one’s gonna see me for a while. Can I rock a Jay Clouse beard? Answer? Not really.
Jay Clouse 1:18
It’s not the same at all. To be honest, I don’t think I have a very good beard. I’ve been associated with a beard for years because I’ve had it. But I don’t have that good of a beard. You have probably a better base. If you worked at it for a few years, you could probably have a pretty serviceable beard. You definitely have a better mustache than I do.
Eric Hornung 1:33
Well, here’s, here’s, here’s a little trick of the trade. Jay. I’ll tell you from one beard guy to another. See, I grew a beard when I lived in New York for a couple months and you know that in between the mustache and the chin? The, the right here…the listeners on what I’m pointing to. The right here.
Jay Clouse 1:52
Yep I see it.
Eric Hornung 1:53
The key for me is shaving that consistently, because if I don’t I get the thickest goatee looking thing that you can’t, you can’t even tell I have a beard. It’s just all you focus on is the right here, which again, listeners, is in between the mustache and the chin.
Jay Clouse 2:07
I don’t think it’s technically a beard. If you shave the right here, I don’t think it’s technically a beard. It’s kind of more of a, like a musketeer type situation.
Eric Hornung 2:16
All right, so I can’t call it a beard. Do you want me to say Oh, yeah, I have a musketeer right now? Is that gonna make sense to anybody?
Jay Clouse 2:22
I think if you don’t have the mustache, it’s technically like a goatee, but you have the mustache but it’s not connect…wait.
Eric Hornung 2:29
Goatee is definitely a mustache. Goatee is when you shave the sides of the face, right? Like I have like a, like these pubie sides over here. And if I got rid of those…
Jay Clouse 2:42
Wow, wow. Well, I support you. I think that a beard has been an underrepresented effort in your, in your life to this point, and it’s time for you to give it a shot.
Eric Hornung 2:54
Thanks, man. You know, what I love when I’m surrounded by people who support us, and today’s guest has been a huge supporter of upside. And look at this. This is going to be a double segue here, Jay. Are you ready for this?
Jay Clouse 3:06
Eric Hornung 3:06
He’s supporting underrepresented markets across the country as well.
Jay Clouse 3:11
There you go. You got when I was going for it. Today we are talking with Grady Buchanan, the CEO and founder of Omni Valley. Omni Valley works to showcase and foster under-ventured and emerging entrepreneurial ecosystems by connecting matching and introducing all relevant and participatory investor organizations. Omni Valley supports institutional investors, venture capital firms, accelerators, and ecosystem supporters. Eric, speaking of Grady supporting us, Grady has been one of the greatest behind the scenes supporter of the show to date.
Eric Hornung 3:40
Ooh, the greatest. That was nice. Yeah, we told him after this episode–little inside baseball here, we’re recording this intro after the episode–that he is number three on our recommendations, introductions that turned into episodes lists. So he’s just been sending us nonstop introductions since then, because he wants to be number one. But he has been a huge proponent of upside. And he’s been very helpful in getting us connected to new ecosystems that we want to explore.
Jay Clouse 4:09
That’s right. We’re keeping score of who is being the most supportive of us. We’re keeping score of those introductions.
Eric Hornung 4:14
Shout out to Victor and Sivi at One and Two.
Jay Clouse 4:18
Omni Valley was founded in 2018. It’s based in Madison, Wisconsin. Eric, I’m excited to hear what got Grady excited about this opportunity that you and I have been looking at for the past couple years pretty much in tandem. Seems like concurrently we are exploring the same areas.
Eric Hornung 4:32
Yeah, it’s fun when you find people who are, you might call it running in parallel, Jay. And Grady’s definitely running in parallel on a similar concept, on a similar trend, except instead of focusing on founders and investment, he’s focusing on LPs and fun creation.
Jay Clouse 4:49
Would love to hear your thoughts on this episode as we go through. You can tweet at us @upsidefm or email us firstname.lastname@example.org. And if you want to get some thoughts on Eric’s beard, tweet at us @upsidefm, and we’ll send you a photo. In fact, I might just have to tweet it out anyway. And we’ll get to that interview with Grady right after this. Eric, can you imagine being a founder working with Dr. Capital, Hyde Park, Venture Partners, Draper Triangle, Excel, Chicago Ventures, Refinery Ventures, Hyde Park angels. Can you imagine being a founder and working with all of those VCs and more?
Eric Hornung 5:20
Man, if you got an investment from or worked with all of those VCs and they were giving you advice on your board, and…You just have to be probably one of the best companies in the Midwest or in between the coasts, I’d say.
Jay Clouse 5:31
And that’s exactly what Integrity Power Search is. Integrity Power Search works with all of those VC partners and more as the number one full stack high growth startup recruiting firm between the coasts. They partner with those venture capitalists, private equity groups, and CEOs to build amazing teams for the world’s most disrupting companies. Eric, they are working with 84 plus companies in those different venture portfolios, helping full roles related to SaaS companies, autonomous vehicle companies, big data, computer vision, blockchain. If you’re looking to higher, Integrity Power Search can help. And if you want to learn more about Integrity Power Search and what they’re doing in between the coasts, you can go to upside.fm/integrity.
Grady, welcome to the show, finally.
Grady Bunchanon 6:19
Thanks, guys. No, pleasure to be here.
Eric Hornung 6:21
It’s been so long since we first met, and we’re excited to have you on. And I think I know a little bit of the story, but I want to hear the full history of Grady. Take us on that rocket ship.
Grady Bunchanon 6:32
Oh, yeah, no, i’m happy to. Yeah, Eric, we, we’ve definitely talked for quite a bit. And Jay, pleasure meeting you and finally being on the show. I love the show, guys. So thanks so much for the opportunity. But yeah, my background starts, I was born actually on the east coast. So parents met over in the Washington DC area. That’s where I was born. I grew up but moved to the Midwest very, very early. So I like to say that I’m from Wisconsin. Parents live in Milwaukee now, younger brother still in Milwaukee. I went to the University of Wisconsin Madison. So I’ve done stayed in the Midwest, called this place home for enough years where I think I can claim it at this point. And in Madison, so I’ve stayed here in Madison. I went to school, like I said High School in Milwaukee, Wisconsin. And so there was really my first entrance into where I thought that I would land in my in my life. And so, career wise, I should say. And I took an economics class. And so this was back in 2008. So everything was happening in 2008, the fall. I had just been starting my senior year of high school. And so for me, I mean, it was all very much over my head. Parents were complaining about it as I’m sure a million others were, but for me, I didn’t really know everything that was going on, wasn’t smart enough, didn’t really want to grasp it, was playing football at the time, had some other things going on that I deemed more important. But the economics class was fairly interesting to me. And unlike many, I thought I knew very clearly the route I wanted to take. And so I took economics to college. I was at the University Wisconsin Madison, like I said, made some great friends in the economics department that I still have today and I, I just did the economics route. I considered it a little bit there in my junior and senior year to contemplate business or maybe adding an additional degree. But nope, economics. That’s where I wanted to be, and that’s where I wanted to go. And I was pretty, pretty gung ho on that. And so I graduated with obviously the economics degree. And then I went straight back to Milwaukee. I thought, Okay, I’m going to go, I’m going to go doto equity research, I’m going to work in private equity one day, that’s the clear route, that’s what I was taught to do. I exited school and quickly realized equity research is a lot about understanding the companies and the cash flows and internal workings, which I had no experience in. I knew how to read supply and demand graphs, which is not in any job interview, it just doesn’t seem to come up. So for me, it was, for me, it was just, let’s learn about the companies, the internal workings and like I talked about, $1 into $1 out. And that really landed me at a bank. It landed me at Wells Fargo doing treasury management and almost coupling into something that I thought I might want but never had experience in, and it was sales related. So what we did was we went around to companies and was content, our territory was Milwaukee and then Green Bay in northern Wisconsin. So a lot of driving to interesting parts of the state, you know, that I just didn’t get to see. But just was a lot of driving. And a lot of big companies out there that are doing some pretty interesting things globally, and helping with their treasury management services. And so that was pretty interesting for me. I did that for almost two years. And then I realized, you know what, I do want to get back into the investment or the economic side of things, whether it be research or some other matter. And I took a job down in Chicago at Northern Trust. So switching bank to bank, conservative to even more conservative, older to even older. And so for me, it was, alright, I’m doing investment performance now, and I’m doing risk and analytical services, somewhat related. It’s very interesting, I’m learning more and more. But that’s where I got my foray into institutional investing and what they’re looking at. And so those portfolio managers I would be interacting with, because obviously running their performance and helping them with investment suggestions when they would ask, that was really our role. And as a younger analysts, very heavy on the analytics, and so, which was great. And so I learned a lot. And I ended up taking that, one of my clients happened to be the Wisconsin Alumni Research Foundation. And so they’re a university affiliate to the Wisconsin, to the Wisconsin Madison here. And for them, they have a $3 billion endowment portfolio that’s attached to their tech transfer office. And so for me, it was, wow, this is pretty interesting, I’ve never heard of this. Wisconsin Alumni Research Foundation Wharf is this building on the other side of campus. Wisconsin’s campus is humongous. I had never actually even been over there. It’s a tremendously tall, rather old, ugly looking building. I was like, what goes on over there? It’s not really my world. But I ended up, again, they were a client, I ended up interviewing with that team. It took me a few hints, actually because I wasn’t savvy enough to know that they wanted an interview. But ended up going up there. The team was seven people at the time when I joined. My main responsibilities were the Analyst. And so this was an institutional portfolio. They were a term investor investing throughout every asset class you guys can imagine. So an awesome experience, great portfolio, a lot of good exposure for me to, again, all those asset classes. And I landed in the, in the hedge fund side, I realized, after a few months, hedge funds weren’t really for me, nothing against hedge funds, it’s just not my world. It was, it was moving a little bit too fast. And you’re not really creating much or more trading on algorithms. Obviously, you guys know this. But then venture capital and the more altruistic events and the investments around here and attached to the university were really where I found my, my niche. And so for me, it was, well, there’s gener8tor here. And I know you guys know, gener8tor really, really well. And Wharf was, was a proud supporter of them in 2012 when they got up and running. And American Family’s a big corporation here, and they do a lot in the innovation and investment space, especially locally and into venture capital and local startups. And it was a world that I had that I knew nothing about. I mean, we obviously had startup founders and you look at them like they’re crazy people, just because that’s not the route that you’re in. And for me, it was, well, we have all these venture capital resources, we’re investing our portfolio pretty holistically throughout the US and even globally, we have a lot of really good resources on the venture capital side. gener8tor has some really good resources, but they’re more or less–this was at the time more or less landlocked here to Wisconsin and Madison and Milwaukee, and now they’ve obviously grown. But how do we connect our portfolio to really grow this ecosystem? And how do we serve our role as a limited partner, given that we’re not directly investing into startups. And Whatf was doing some co investments at the time, but it wasn’t my role to invest directly into startups; our role was to go out and find venture capital firms and invest them into our portfolio. Of course, we’d have conversations. Yeah, it’d be great if you guys come to Wisconsin, look at some companies. But at the end of the day, that’s not what they were going to do. And it’s great that we now have some venture capital firms here like the ones 4490 in Madison, and we have some others throughout the state. But in order to connect to them, I wanted to leverage our network and I wanted to speak with enough people and see if they wanted to tap into the Wisconsin market. And that was really where the crux of the idea for Omni Valley came in speaking with the accelerators, the local incubators and some of the VC firms here, how do we highlight everything that they’re doing and give them exposure to the rest of our network that we have as limited partners, because we have the–I’ll use luxury loosely–but we have the luxury of talking to anyone that we want. And we can actually bring them here and get them introduced to the real doers in the ecosystem. And that’s exactly what happened. We put a network online, and we started to talk to everyone. I’m a big learner by just doing our speaking to people. I love to interview people. So I love what you guys do at upside. But you guys showcase the upside of the startups here in the Midwest for investment. We wanted to do exactly that. But our platform is designed just for investors. So our investors can speak with one another to really give them the lay of the land and understand what the ecosystem looks like. If you get into your portfolios and startups, great. But a lot of the portfolio companies that are here aren’t actually in Wisconsin, they’re just part of the portfolio’s that the investors have. And so, if you want to know Madison’s ecosystem, it’d be tough to talk to one startup and talk about the ecosystem, whereas the investors know more, was at least our theory. And so yeah, to wrap it all up, economics all the way through back to venture capital, and now just serving as a connection role given, given the experiences I’ve had and putting it online and an exclusive manner was, was our goal.
Eric Hornung 14:22
So you were a institutional investor, you have played in this space, and it’s somewhere that we really haven’t talked much to on the podcast yet. How do LPs in general–and I understand that there’s different categories of LPs–but how did they think about allocating capital to things like hedge funds or private equity or venture, and what kind of trends are present in the industry?
Grady Bunchanon 14:46
Sure, so limited partners, in a way, there’s obviously the chief investment officer, the deputy chief investment officer, director of investments, whatever the titles may be, there’s someone there managing the allocation, right, and it’s dished down to your portfolio managers and your directors, and even your analysts if they’re running certain pieces of the portfolio. But most endowments or foundations or even larger pension plans, they’ll have an investment committee that’s a subset of the board, right. And so the Investment Committee is there to really say, you know what, we understand the strategy that you guys are pitching, if that’s your route, or we want you to run this strategy and we want applications to look like this. Because at the end of the day, your limited partners, for lack of a better word, we’re, we’re very good implementers. We know how to invest appropriately and we know how to invest very efficiently. So it’s not us actually dishing out money and investing in stocks sitting on a trading floor. Most of us are very small teams, and we’re requiring our, we’re using hedge funds to do that. We’re using other portfolio management services to do that. And so when it comes to allocations for us, it really came down to from the Investment Committee. And it came to say, Hey, we want this certain allocation to venture capital, we want a big piece into hedge funds, we want to run, our portfolio is a little bit unique. We ran a risk parity portfolio with an overlay. So not to get too in the weeds here, but risk parity is just, let’s invest through asset classes pretty holistically and use some leverage and balance the risk, because if you’re taking risk, you should have the same return. And then with the excess cash that we had, because of the leverage we were using, we invested pretty heavily into hedge funds. But on the venture capital piece, we always had a 10 to 20% venture capital allocation. Within that was always a very small portion to what we called emerging managers, which, which again, I’m sure I’ll get in trouble for this one day, but the, but more of the altruistic type set of, Let’s help out the state of Wisconsin, not so much focused on that return, but really focused on giving money here because we are attached to the university, we’re focused on growing this ecosystem, it should come out of our portfolio. Returns our grades, obviously, but we need to put money to work here because it’s one of our responsibilities. So I think to answer your question, Eric, it really is, it depends the strategy that the, that the portfolio managers can come up with, but a lot of times the Investment Committee will decide where your best allocations lie, and it’s our job to go implement.
Eric Hornung 17:00
I want to ask Jay a question real quick.
Jay Clouse 17:02
Oh, God, I don’t know, I don’t know if I want you to.
Eric Hornung 17:04
This is so much like my world that a lot of what Grady’s saying just seems clear and obvious to me. What is not clear and obvious to you as someone who exists outside of this institutional finance world?
Jay Clouse 17:18
It’s, it’s become clear to me through this podcast that there are different classes of investors. When you say institutional investors, I’m not even sure that’s as clear as it could be. Venture capital, hedge funds, I think that’s fairly clear. But can you talk to me about maybe like through the lens of Wharf and some of these institutional investors, when they’re thinking about allocating capital, what is it that they’re trying to, I mean, of course, they’re trying to maximize for return, but what are the other considerations that they’re going through when they are thinking about allocating capital for an endowment, for example?
Grady Bunchanon 17:50
Right. So I think I mean, at the very base case, we all have a spending requirement. It’s almost, you know, for an endowment, we’re trying to hit a certain return and, you know, we have our respective portfolios, whether we trade stocks or ETFs, or we have an, you know, a 401k that our company takes care of. What’s your goal there? The goal for the endowment is to last forever, right? We’re a very long term investor. A lot of our models would actually have 100 year outcomes. And so that weathers you through many, many different recessions. Our portfolio is meant to be there to support that spending requirement. So again, that spending requirement is really, what is it that we’re giving to the university? What is our endowment there to support? And many endowments have different spending requirements, right? They could go to certain events. Ours goes obviously to the university from Wharf as does the University of Wisconsin’s foundation an a lot of those University attached ones But the state pension plan here is investing on behalf of State employees, right? And so their goal is a little bit different. Our goal is to beat the market and to have and to, and to work well with inflation, obviously, and then to have some sort of excess return. But the core return for us was that spending requirement. And I think for us, it was always hovering between 4 and 6%, which you guys can say, well, the market runs very, very hot in some years. That’s great. Our portfolio isn’t meant to deliver outsized returns, right? It’s not, it’s meant to, and it’s not meant to deliver very undersized returns, either. It’s meant to weather through any storm. The Investment Committee, it’s by no means a sexy way of investing, right? It’s not, oh my gosh, we’re the best hedge fund, we get 30% returns year over year. That’s not going to happen in our portfolio, because if that were to happen, it could also happen that we lose 30%. And that’s way, way worse than it would be to not hit our spending requirement of that simple 6%. So we have to think about it in terms of inflation, we have to think about it in terms of the long run,a and we have to manage the portfolio very risk aversely almost to just hit that return to make sure we can hit our spending requirements.
Eric Hornung 19:44
What was it like going from Grady, the Analyst, to Grady, the Community Builder?
Grady Bunchanon 19:51
It happened…I don’t, I don’t know the exact day when it happened. But for me, it was, I joined, I joined Wharf, and I guess I tricked them well enough in the interview to make them think that I was ready for this position or they knew firsthand, it’s like, here’s a, here’s a very raw piece of clay we can mold into whatever we want. But what I thought about is, I don’t know anything about this space. We had a great, great portfolio manager that new hedge funds that had been running portfolio really, really well, and is still a very good friend of mine. And he was able to teach me the hedge fund space and the diligence required and the right questions to ask and how to speak to those people. Again, not my world, wasn’t my, wasn’t my true interest. And on the venture side, we had some people but they were obviously busy. And for me, I just, I started calling everybody. I started calling the accelerators, I started calling the venture capital funds, started here in the Midwest, obviously knew our portfolio managers really well, but there’s only so many managers in there. And so I started calling everyone because at the end of the day, what I realized is, I’m not going to be able to apply what I learned in a college class without knowing how the real world is working. And a lot of the venture portfolio managers, a lot of the accelerator founders, I mean, these are very interesting people. And they’re telling you exactly what they see by way of trends, they’re telling you how they’re trying to build their own communities. And you see a lot of similarities in the Midwest and the more peripheral ecosystems. And then you see a lot of similarities between New York, Boston, and San Francisco, obviously. But when you look at those three markets compared to the rest, very, very different. And our portfolio had funds on the coasts, it had funds within the Midwest, and I really just needed to learn as an analyst from the people that were doing this. And in doing that, Eric, to go back to your question, it was, well, how can we apply that to Madison? I mean, everybody’s doing very different things here. Let’s get to know the people in Madison. And I almost did that second. And so that’s when I started to get involved with the Madison ecosystem, learning more and more what Wharf was doing on the startup side because Wharf is a tech transfer office that helps with university startups, and getting more involved with those people. Madison’s ecosystem isn’t that large, right, nor is Milwaukee’s or Wisconsin’s for that matter, when it comes to the right people to meet. And I just quickly became, you know what, I’m just going to reach out to them, I’m going to be a little bit bold here, I don’t know them, I’m going to reach out cold on LinkedIn, or I’m going to use connections of connections. But I need to speak with these individuals to hear what they’ve been doing, because they’ve been growing this ecosystem for how long, and they’re the real doers, and I would love to be a part of that. So it started from the top down, just using my role, figuring out what other people were doing in their ecosystems or how they were investing in their respective markets, and trying to marry that with the people I knew here in Madison.
Jay Clouse 22:30
What were some of the more surprising insights you gained after doing a bunch of these interviews with, let’s start with venture investors across the middle of the country?
Grady Bunchanon 22:40
Well, I think, well, originally, so I, when I joined Wharf, I was still very naive, right? I mean, I had learned what a limited partner was, I learned that they were the ones giving the money to the venture capital managers and that it wasn’t just a bunch of VCs investing their own money because that’s how dumb I was when I exited school, but…um, andhedge funds, too. But for me, I, I started talking to–The big difference is, and the biggest learnings were the differences between the coasts and what was popping up in the Midwest. So this was four or so years ago, the Midwest was still growing, obviously, and it is today. But it wasn’t where it is today. I mean, it grows so, so fast. And you see more emerging managers and more teams spin out of large venture funds, move to the Midwest. I mean, you saw Chris and Mark, do it at Drive, and that’s awesome. I mean, they bring, they can bring what Silicon Valley has to Ohio. And we need more funds like that. And not necessarily from the coast, but you see it in Chicago, there’s so many funds. St. Louis has, has quite a few. And now Minneapolis has some great ones. And the biggest learnings for me, were basically following the trends of just where the people were moving and popping up. I mean, the coasts are still epicenters. I think they continuously will be epicenters. Nobody over there is going to tell you that that they’re slowing down. But I do subscribe to the theory that they will become less relevant, because I think while they’ll always be these kingpins, the Midwest and these funds that have been popping up, it’s just more and more more funds. My biggest learnings were, you’ll never have a shortage of people to talk to. They’re all very interesting, they all see their own respective markets, how they see their markets. And you can talk to a fund that is literally across the street from another in a smaller market and they’ll say different things. And they’re well connected to one another. But you get these great insights. And I can’t pinpoint one thing particularly but it’s, it’s, it’s very different learning about different cities, and it’s very, very interesting.
Jay Clouse 24:28
What was the impetus to say, I’m going to take on the gigantic effort of building a company, a brand, a software tool to bring these connections you we’re building into a digital organized space?
Grady Bunchanon 24:42
Like most, I feel it started as a hobby to better myself. It wasn’t really meant selfishly, it wasn’t meant to help anybody, originally. It was, it was a network for myself. I put it out there online because I did, I truly did want to connect. I wanted other people to do the work honestly. It’s like, okay, if we can put this network together, I expect you guys to go out and connect. That’ll never work, especially if I’m treating it as a hobby, they’re going to treat it as a hobby. It makes zero sense to me. If you’re going to jump in the river, you might as well jump in a river and start avoiding the rocks. And so for me, I jumped in, I went full on and that, that transition was slightly easier for me, and I’ll spare all the gritty details, but the Wharf investment team doesn’t look like the Wharf investment team anymore. And so this happened, and Wharf was, Wharf was cordial, they were very nice enough to let Omni Valley run and it was obviously pretty applicable to what they were doing, especially within our portfolio. So that was great Nut the investment team took a hit mid year 2019 and when that happened, we saw some, we saw some people leave and they went off to bigger and better things, and I ended up just leaving and starting full time in November of 2019. And, and so I kind of like, like I alluded to, I just, the I just was more or less pushed in the river, and nd now it’s like Grady, start avoiding the rocks here and make this work. Figure out as you go. I didn’t know anything about brand. I had a name and it was a font that was free from Word. And it was, I mean, I put an O around the V, because I was like, we could use the OV on LinkedIn. That seems to make sense to me. But it was really moving through as, as I progressed. I had a great cofounder at the time that was helping me through this. And then we ended up finding two additional people that are amazing. And they’re full time on our team, too. So it happened, it happened pretty organically. But it was, it was definitely a process over time.
Eric Hornung 26:34
You mentioned that you jumped into the river. You’re also working on a fund of funds called Nothing Ventured, Nothing Gained or NVNG. Do you consider yourself fully in the Omni Valley river? Or are you kind of still splitting your time, and what does that future look like?
Grady Bunchanon 26:53
How, how I justify it to myself, because it’s a good question, and it’s one I ask, I asked myself all the time, it’s like okay, What are we doing today? Um, but for me I look at the–and as cliche as it sounds, I mean there’s 24 hours in a day, right? And so there is, if you break that up by three, there’s eight, eight, and eight. And I’m supposed to sleep for eight hours. Admittedly I don’t, I can’t do that. I sleep because I have to, I eat because I have to. And, but the eight and eight part for me it was okay, I could spend eight hours doing Omni Valley pretty easily, and Omni Valley does require a little bit more work since, since, since it’s almost ready to scale out there. And NVMG was something that I’m, that, that we’re starting with the Ex-Chief Investment Officer at Wharf, honestly, and she, she, when she had left Wharf, she realized, Okay, what should I put my talents to work here? I’ve been in Wisconsin for so long, Grady’s really well connected on the venture capital space, let’s bring him on to and try to found this company that will serve as a corporate venture capital fund to fund arm. We’ll invest very similarly to how we did at Wharf, we have experience in it, we have the right connections. Why don’t we launch and we’ll work with some of the venture firms locally, and they’re nice enough to house us. But that initiative made entire sense to me. And it was very related to what I was doing on the connection space when it comes to Omni Valley. And so marrying the two seemed to make sense. Obviously business partners at NVMG know full well when Omni Valley is; people at Omni Valley know full well with NVMG. I think honestly–and both of them makes zero dollars. So I think honestly, it’d be nice to just have to do one thing. But I also think, personally, I don’t know if I could just do one thing. I always had Wharf, and then I had Omni Valley because I need to be able to turn my brain off and do something somewhat, somewhat different. And if that’s work, it’s work, if it’s going on a run, it’s going to run or walking around. But the idea of having two things that are running simultaneously but are related is very attracted to me. And I think, and I think managing both can be tough. It’s just, it’s just all about how you balance your time.
Jay Clouse 28:54
Can you give us the optimistic vision of what Omni Valley can be and on what time mainframe?
Grady Bunchanon 29:00
Sure, so in two days, we’ll have the entire market. No, uh, to answer your question, we’re we’re growing slowly, but almost methodically slow. And so what I mean by that is we do a lot of speaking with our members. So we don’t, we don’t have customers, we have members on our network. And our members are the venture capital firms that the larger limited partners, family offices, angel groups, we now support, and obviously accelerators, and now we now support individual angel investors that we just released a few weeks ago. So our target market has grown dramatically having individuals being on the platform. But for us, there’s about 20,000 members out there that are potential users for us. And that doesn’t include all the corporate acquirers, they’re very hard to account. But within the US, I mean, there’s 4000 some venture funds; within x US, there’s 7000- some venture funds. We’d love to see, you know, very, very aspirational, like you said, very optimistic in a few years, we’d love the word of mouth to be there where we have the place form for venture capital firms, accelerators, any investors into venture capital funds or to startup companies, this should be a great place for them to go and find the data that they need to take their handshakes from ten handshakes down to seven or eight. We don’t really need to be the deal engine, we don’t need to move money on the site. For us, we wanted to make it free for our members so that they can go in, still feel an exclusive environment to one another. And it’s a peer network. So by all means, share your Calendly link, share your phone numbers, your emails, everything that we hold very near and dear to our hearts that we’re afraid to get out there. This is for investors. And so, I guess very optimistically, we’d love to own most of that market. We’d love to be able to support most of the ecosystems, and for them to grow their own groups within, within Omni Valley. I mean, if you want to showcase Milwaukee, if you want to showcase Columbus or Cincinnati, there’ll be forums there for you to do so. Anyone from around the world should be able to see and hear about what’s going on in Ohio without having to physically be located there. And I mean, I liken it to numbers, Jay, to answer your question, but if we could get a good portion of that target market, it does spread. I mean, this industry is very relationship focused. And so if I’m using this, and they’re using it, the third person, there’s a good likelihood that they should be using it too. So, you know, to wrap it all up, it really is if we can get a decent number of venture capital firms, accelerators, and then more, more selfishly, it is those smaller incubators, the accelerators that are hitting home local to their ecosystems, I want all of them on the platform. I want them to be able to showcase what they have and to gain exposure from others.
Eric Hornung 31:32
When you think about your go to market, how do you think about the trade off of–and I’m looking at your ecosystem map as I asked this question–of saturating a market to the point of critical mass versus painting with a broad brushstroke and hitting new ecosystems?
Grady Bunchanon 31:49
Right, so for when we market, we market, so, it’s a great question because it’s something that we thought about. We market very agnostically throughout regions. So when I say that, we throw out marketing material to anyone that’s in our pipeline. At that point, I don’t care where they’re located, I want them to pop up on the map and to showcase themselves wherever they, wherever they sit, because honestly, we have funds that are in the heart of the Midwest, but they only invest on the coasts, or we have funds that are in the coast that are really looking hard at Colorado or they’re really looking hard at those mountain or, or even Texas. And so where they invest geography wise isn’t necessarily specific to where they’re physically located. And so I don’t think saturation is, is, it’s a good question; it’s just, it’s not very applicable when it comes to our members and what we’re doing in our network because at the end of the day, if everyone’s located in Bozeman, Montana, great, there must be something going on in Bozeman, Montana, you should join that forum, figure out from those groups there what’s going on. And for us, I, we never intended to beachhead ourselves. We had talked about it in figuring out how individual markets work. We knew the Midwest really well. But at the end of the day, we look at every ecosystem as ecosystem one or ecosystem X, Y, Z. It doesn’t, it doesn’t really matter. Tthey should all be treated equally, and they should be the same. However, many groups are located there, like if you’re looking at it, Eric, you can see obviously New York, Boston, San Francisco, big, big dots on the map, obviously, they have a lot of members there. But in the smaller communities, they don’t. And in the smaller communities, we might have every dot that’s actually in that community. But nobody would know that unless you go to those individual spots. And so, we don’t worry about the saturation. We really focus on attracting new members so the new members can drive those conversations and figure out where they want to go and invest.
Eric Hornung 33:34
How do you think about who those members are? So if Jay and I ran a fund, and we were unaware of Omni Valley, and we went on and we saw you didn’t have Drive Capital in your database, that could be a negative indicator for us. Or if we saw you had a defunct fund that, you know, they are registered, that could be a negative indicator for us. So how do you think about negative and positive indicators in terms of who your current membership is, or is that, am I overthinking it?
Grady Bunchanon 34:00
No, I, I absolutely think you’re spot on. I think every company should think about that when it comes to their customer base, obviously. For us, we, we more or less get around it because all of our data and our profiles are controlled by our members. We don’t input data for them. Anything that we, it’s all editable by them. It’s time stamped by us. And so for everyone else on the, on the, on–So, if Jay and Eric’s VC fund opened up, you guys could see who inputted what data and when knowing that a group there did it. If you saw a defunct fund on there, you see a timestamp on there, and there, and there would be a certain timeline for us where we would reach out to that fund and ask them what’s going on. But it’s controlled by you guys. It’s very much an open, it’s like a conference, right? And so if you guys were to go to a conference and you saw somebody sitting over in a grey shadow and their fund was no longer open, you probably wouldn’t go to them. And there’ll be things on the website that we’ll have to, to address to solve those issues as more and more people are on there. But it’s funny, you bring it up because honestly, we don’t have the very largest venture funds that everyone would think about. I don’t think you’re gonna see Sequoia or Andresen on there for a, for the foreseeable future, given their networks are so robust and them not needing any additional limited partners or any other co-investors at this point. Why would they need something like this? They might need it to address other markets if they’re interested in entering them. But as far as the connection network, you’re right, you might not see those big, big names. And I think we’re absolutely fine with that.
Jay Clouse 35:28
Why does Omni Valley need to exist when there’s something like AngelList?
Grady Bunchanon 35:32
Sure. So Omni Valley at its, at its core, it’s promoting exclusivity strictly to investors. And so while AngelList is really good at promoting deals and telling you who’s leading syndicates and trying to get you connected to individuals, AngelList does a good job, they’re a better platform, but they also have a brokerage arm attached to them. So they’re facilitating moving money. It’s a little bit more involved, obviously. But it’s got real results when it comes to investments. Our platform is really meant to be Vertical LinkedIn, we don’t need to move money on the site, we don’t expect you guys to. Our thought processes in seeing how long it takes for some deals to be created or matched with other investors will serve as the connection case. And we’ll give you data that’s inputted by our members that tells you if they’re a direct investor or a lead investor or co-investor, when they’re in market or when they’re raising a fund. Very informational data. It’s just rarely changing, right? And so AngelList does a good job of facilitating conversation and telling you, Oh, there’s a startup deal, it’s in this market, here’s what I’m looking for term wise. We let them take those conversations offline. We’re really meant to be, like I said, originally, we’re really meant to be removing a few handshakes. AngelList of seeking to remove them all. Great. We think that process could look a little bit cumbersome at times, and how do you exactly know who you’re investing in? It can almost delay deal flow. For us, we’re strictly there to say, hey, there’s an investor, they look pretty interesting, they happen to be in Green Bay, Wisconsin, but they’re doing exactly what you’re doing. Maybe you should speak with them. It’s more of a suggestion that a, hey, I have this, let’s go run with it.
Eric Hornung 37:03
How does Omni Valley make money or plan to make money?
Grady Bunchanon 37:07
So from a member perspective, we intend to keep the membership free. I’m sure I’ll eat these words, and somebody will play this back to me and we’ll get sued over it. But in any event, we plan to keep the membership free, because at the end of the day, connections should be free. I mean, having to hop on a plane costs money, having to even pay your own phone bills and try to call people costs money. But inputting your information on a network so you can be seen and get exposure by people that are on the coast or people all over the world, that should absolutely be free in my mind. And maybe we’re a little bit too pure in our thinking. But as far as revenue comes, we really intend to provide additional more ad hoc services to that, to that holistic subscription. And so when I say subscription, subscription’s free, but the, quote unquote, premium services that will be on there. We intend to have a service provider page where we’ll have service providers that are more portfolio managers specific t hat’llalso have the discounts that you guys have seen from for their startup companies. And then we’ll also have company promotions where it’ll be less solicitation, and it’ll be more what is, what is the company in this portfolio need? Can we match investors based on those needs? I mean, there’ll be a lot of angel investors on there that are really good at finance or they’re really good at helping in fundraising, or they’re very good at sales and marketing. Every, you know, quote unquote, mentor has a specific role that they can serve. And as an angel investor, they provide a lot more than funding. Obviously, all of our investor groups do as well. So if you can list the companies and say, You know what, I’m a venture firm, the Jay and Eric venture firm has three, three portfolio companies their own market today, yes, they’re raising but they’re raising for these specific needs. Are there investors out there that can help them with this? And that’s even further showcasing what it is that you guys have to offer. It’s giving you the exposure that’s required for venture funds. So more ad hoc services that we’re, that we’re thinking about almost like more advertising, I guess, but within the platform, still hitting onto our mission of trying to connect these, these markets to other markets.
Jay Clouse 39:01
So if I’m listening to this, and I’m thinking, Omni Valley sounds awesome, I want to get on there, I want to meet investors, how do I do that?
Grady Bunchanon 39:07
So currently, Omni Valley is a free platform. I’m happy to say our landing page, the new platform design released a little a few months ago. So we’re pleased with how that looks. It should be a little bit more user friendly. But it’s as simple as clicking on one of the ‘Join today’ or ‘Join the Ecosystem’ buttons that you see throughout the website. That takes you straight to the register page. It’s a three step registration process, again, to promote exclusivity and to have, have our investors be sure to input exactly the information that they want to be matched by. Once they’re in there we do, you’ll get sent to your Edit Profile page. We take some time on our side to make sure that we’re vetting the profiles. Investor groups are slightly easier than individual angels are. But again, we want to keep the platform away from bad actors. We want to keep it very exclusive to investor groups. And so that’s why we do that. But it’s as simple as a three step registration process right on our website.
Jay Clouse 39:58
And then once I am in Omni Valley, what would you recommend the first step that I take is as an investor?
Grady Bunchanon 40:05
Yeah, if you are, I guess new or old investor and you’re looking for new connections, I’d go to the ecosystem map. I love the way our map looks. It shows you exactly geography wise where these funds and firms are located. So if anything, like I’ve talked about earlier, it doesn’t necessarily tell you to where you invest. But it does show you where the heart of our memberships are coming from. It kind of shows you in a different way the trends throughout this market. It’s like, okay, who needs more connections, who’s actually clobed on to Omni Valley here. It looks a lot like it’s in the Midwest, it looks a lot like it’s in these very peripheral or smaller markets. And if you want connections in, in a space there great, use the map. If you’re looking for investment for a company that you guys have in your portfolio, or if you’re looking just to get connected to investors that operates similarly to you, we also have a member list search, which is which is table oriented. And so what that will tell you is you can sort by if they’re a direct investor, co-investor, if they’re a fund investors. So if you guys are raising money for a venture fund, it’s great to have limited partners on there, because a lot of them will strictly invest at the fund level. But they do like to see what everybody is doing. They love the transparency of it. But then it will also show you the geo focus on where funds are investing. So we have a very simple button up there after you guys input your own stage of investments, your own industries, your own check ranges, and every other, and all the other fields that we asked you guys to input, you can just click Match My Profile. And if you match your profile or edit your profile to what you want, it will pull up the investors that are in the space, that are in the market that say, Okay, yeah, we we will do exactly this, or at least well, we’re saying that we’ll do exactly this. You guys click on their profile, call them up, grab a time on their Calendly link or simply email them and say, Hey, it looks like you guys are a great connection for us, oh, cool. You’re in Kalamazoo, Michigan. That’s neat, that’s close to us, or maybe it’s not. But can you guys look at a company that’s down here in Georgia? And a lot of that has happened, and it’s been pretty interesting to see because investors don’t need to be in your own backyard. We think very, very exclusively to our own markets. And our goal here was to open it up. And our goal for you guys as investors is to hop in there and open it up as well. So I’d say use the filters, check out the profiles. But ironically, what’s best case scenario for us is if you hop off the platform, and you take this, and you run with your connections on your own, and you take the emails of phone numbers, and you start to create strategic relationships with your next investors.
Jay Clouse 42:28
Awesome. Sounds like if people want to learn more after the show, they go to OmniValley.co. Anything else? You want folks to know if they want to follow you or your work?
Grady Bunchanon 42:37
Uh, no, I think we’re just coming off the heels of Investment West Conference that happened just here in early May. And we wrapped up a cohort program that we’re in, so we did have our first investment which was great, and going through that cohort was amazing, and it was a Midwest based accelerator. So we got, definitely got to learn a lot. But I would say LinkedIn and Twitter is where Omni Valley lives, it’s where our target market lives. If you guys have suggestions, by all means tell us. But that is where we’re actively out there marketing, and you’ll, you’ll start to see our name out there a little bit more once we, once we really ramp up that, those efforts. Yeah by all means, please visit our website or call us at any time. I’m, we’re happy to talk. We are connectors, and we’re happy to learn more about anybody that’s interested or share what we’re doing.
Eric Hornung 43:27
All right, Jay, we just spoke with Grady from Omni Valley. What do you think? Do you want to start some hot takes? You got a hot takes?
Jay Clouse 43:33
Part of that interview reminded me of why I switched out of finance and into marketing.
Eric Hornung 43:38
Jay Clouse 43:39
It’s just, man, it’s over my head, some of this, some of this language that is related to finance and…I don’t even remember the language. But I’m glad that you asked at one point, you know, is this something that’s second nature to you, and I could clarify a little bit, because anytime we bring in somebody that has a little bit more of a sophisticated and private market background, or sorry, public market background, it’s just something I have almost no experience with.
Eric Hornung 44:05
I feel like financial language is like the opposite of marketing language. Like marketing language is meant to be simple and intuitive, and you understand it. And finance language is meant to like make you, make very simple things sound difficult.
Jay Clouse 44:18
Right, right. But it’s also very interesting to me anytime that we bring someone in that has this type of background, pedigree, an interest in finance that then turns that focus towards private investing, which I think is also interesting to you, because you bring that up a lot when we talk to people like that.
Eric Hornung 44:36
Yeah, it reminds me of talking with Alex Rubalcaba, or, I mean, that was Bill Gurley’s background. And for fans of the show, you know I’m a fan of Bill Gurley, who actually just announced he’s going to retire. A little side note. But so much of traditional finance and what you study for in the CFA and the public markets and FinTwit is centered around this traditional financial infrastructure, the things that, the way things have been done since the 1500s in London when the modern Stock Exchange was was invented, and the way they’ve evolved. And it’s just really interesting when people take the advances there because all the brightest minds in the world are building the future of finance in ways that we don’t see. And I think the private markets tend to be a little bit more variable with the sophistication of how you invest. So when you see people who come from a public market background to a private market background, I think they just bring a, they generally bring a level of thought that people who maybe start as an angel investor and focus first on relationships don’t bring. And I don’t know if that’s a good thing or bad thing for returns. It’s just different and interesting to me.
Jay Clouse 45:49
Omni Valley being started in Madison, Grady being located in Madison. I wonder what that would have, I wonder how it would have been different if somebody from say like Tulsa started something like Omni Valley. Madison feels like a good place to start something like Omni Valley compared to a lot of other cities across the country just because it’s geographically kind of focused centrally in the country. They are, as far as tier two tier, three cities, one of the cities that a lot of people talk to us about being interested in as an emerging city. So it all makes sense.
Let’s play a quick, let’s play a quick round robin here. Because I’m interested in that idea, I don’t know that I’ve thought about it too much. And before we get in our round robin, one thought that’s at the top my head is in terms of venture and in terms of startup investing, Madison doesn’t feel like a threatening city.
Eric Hornung 46:42
What do you mean by threatening?
Jay Clouse 46:44
Like to other ecosystems, it doesn’t feel like Madison’s going to encroach on their territory. Maybe that’s just a weird feeling I have. But I think when you think about like Chicago, Chicago kind of spills over. So if Grady had started this in Chicago, it’d feel like a little bit of Manifest Destiny, almost, with Chicago expanding to Milwaukee or expanding to Columbus or expanding to Cleveland, whereas Madison doesn’t have that same vibe. So let’s play a little game of round robin here, Jay. I’m gonna name some cities and you say, yeah, Omni Valley fits there, or, hmm, I don’t know. You ready? This is a segment of the show called Eric makes up a game. Austin.
Eric Hornung 47:24
Jay Clouse 47:25
Eric Hornung 47:26
Jay Clouse 47:27
Eric Hornung 47:29
Jay Clouse 47:30
Eric Hornung 47:31
Jay Clouse 47:33
No. I mean, yes, but also people would look at it and be like, but you’re in New York.
Eric Hornung 47:41
All right, one last one. Denver.
Jay Clouse 47:43
Eric Hornung 47:44
Oh, hold up. One last last one. Boulder.
Jay Clouse 47:48
Also, yes. What’s interesting to be about Madison is, you know, Grady getting into this for the first time and talking to investors in the Madison area, it’s also just a short jaunt over to Milwaukee, which I think is key in starting something that is so interconnected to different ecosystems is having another one really close by. It feels like an easier bridge. And now it’s not what’s the Wisconsin, or that’s not the Madison guy; that’s the Wisconsin guy. Then you shoot over to Minneapolis maybe and now it’s like, oh, that’s kind of middle the country guy. Anyway. I think placement, I think geographic placement was important in starting Omni Valley there. I think it’s a super interesting and valuable tool for making these connections between investors. I think Grady’s probably a little bit under estimating the financial viability of something like this. But I respect the, the ethos of making it free and available for these people.
Eric Hornung 48:50
Yeah, I agree. I think that this is a, like upside where we’re connecting communities outside of Silicon Valley, Omni Valley is connecting investors across the country. I just think there’s such power in doing that. When we first started upside, Jay, we talked a lot about this term–and when I say we, I mean, I talked about it, and you said stop using that term–archipelago. And it’s kind of how I feel about the communities outside of Silicon Valley, where they’re all doing things, but they’re all kind of focused on themselves. And from an investor standpoint, geography doesn’t matter as much. So you can be in Cincinnati and invest in Cleveland or Columbus or Chicago. They’re all kind of these one day trips, or you can have new co-investors or you can get outside of your city. But right now, I think that people are kind of, just because of human nature, focused on their own thing and haven’t expanded. Maybe because it hasn’t been easy to expand.
Jay Clouse 49:52
I just looked up the pronunciation of archipelago, amd I always thought it was archipelago. And you are correct, which is half the reason why I told you to stop using the word. So I apologize.
Eric Hornung 50:02
Should I bring it back?
Jay Clouse 50:04
If you want to. Alright guys, we’d love to hear your thoughts on Omni Valley and this conversation with Grady Buchanan. We’d love for you to check out Omni Valley if you are an institutional investor, angel investor, venture capital firm, accelerator or ecosystem supporter. You can just go to Omni valley.co. If you have any other thoughts you want to share with us, you can email us email@example.com. Otherwise, we’ll talk to you next week.
Interview begins: 6:11
Debrief begins: 43:23
Grady Buchanan is the founder and CEO of OmniValley.
OmniValley is an exclusive online investor network focused on helping you create connections anywhere in the world.
They work to showcase and foster under-ventured and emerging entrepreneurial ecosystems by connecting, matching, and introducing all relevant and participatory investor organizations. That includes institutional investors, venture capital firms, accelerators, and ecosystem supporters.
- Ad: Finding experienced employees for your new business with Integrity Power Search (5:08)
- Grady’s background in finance (6:32)
- Role of LPs in allocating capital (14:22)
- Considerations for allocating capital (17:04)
- Jump from finance analytics to investment (19:44)
- Why start Omni Valley (24:28)
- Grady’s other projet, Nothing Ventured, Nothing Gained (26:34)
- Omni Valley’s future (28:54)
- Current Omni Valley members (33:34)
- Differences from AngelList (35:28)
- Free membership (37:03)
- Becoming a member (39:01)
OmniValley was founded in 2018 and based in Madison, Wisconsin.
Learn more and join OmniValley: https://www.omnivalley.co/
Follow upside on Twitter: https://twitter.com/upsidefm
This episode is sponsored by Integrity Power Search, the #1 full stack high growth startup recruiting firm between the coasts. They partner with venture capitalists, private equity groups and CEOs to build amazing teams for the world’s most disrupting companies.
Learn more about or get in touch with Integrity Power Search: https://upside.fm/integrity
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