"Look outside The Valley" with Tim Sprinkle of Venture Capital Marketing

Today we welcome to the show Tim Sprinkle, Managing Director of Venture Capital Marketing, where Tim and his team have worked with almost 50 VC firms to help drive an average 20-30% increase in Assets Under Management (AUM) year-over-year.

While this is impressive on its own, Tim has an expansive career in the tech and startup space, including more than 25 years as a writer and journalist, which has given him a unique and valuable perspective on what it takes to succeed in the world of tech and finance.

He’s shared many of these learnings in his 2015 book Screw the Valley: A Coast to Coast Tour of America's New Tech Startup Landscape where he outlined just how decentralized the footprint for innovation has become in the United States (and frankly, across the globe!). 

I’m excited to pick his brain on how things are looking for startups and VCs in 2024, sage wisdom for navigating the current market challenges, and what’s in store for Tim and his team as the year rolls on!

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Intro and Outro music provided by Dennis Ma whose mixes you can find on Soundcloud at DJ DennyDex.

Transcript

Paul Davenport:

And hello and welcome to What the Tech from Boast AI, where we talk with some of the brilliant minds behind new and exciting tech initiatives to learn what it takes to tackle technological uncertainty and eventually change the world. Today I am thrilled to welcome to the show Tim Sprinkle, managing director of Venture Capital Marketing, where Tim and his team have worked with almost 50 VC firms to help drive an average 20 to 30% increase in assets under management year over year.

While this is impressive on its own, Tim has an expansive career in the tech and startup space, including more than 20 years as a writer and journalist, which has given him a unique and valuable perspective on what it takes to succeed in the world of tech and finance. He shared many of these learnings in his 2015 book, Screw The Valley, a coast to coast tour of America's new tech startup landscape, where he outlined just how decentralized the footprint for innovation has become in the United States and frankly across the globe. So I'm excited to pick his brain on how things are looking for startups and VCs in 2024, some sage wisdom for navigating the current market challenges and what's in store for Tim and his team as the year rolls on. So without further ado, welcome to the show, Tim.

Tim Sprinkle:

Thanks, Paul. Great to be here.

Paul Davenport:

Awesome. So I like to start off by asking folks where are you based and how did you get there? I ask because as you may or may not know, Boast are a Canadian company, I'm based here in Boston, never in the same time zone with my colleagues, so love to know where are you calling in from?

Tim Sprinkle:

So I'm in Denver, Colorado. Actually. It's a very similar problem when my clients are on the East Coast, but I got here the old-fashioned way. My wife went to grad school and got a job here a long time ago at this point.

Paul Davenport:

Oh, that is fantastic. So I had mentioned before we record my sister, she's from Boston like I am. I'm the only one who actually stayed in Boston of my family, but she's based out in Denver with her husband Sean. So shout out to them if they're listening here. But yeah, Sean is in the finance space. I will not name what company he works for, but similar deal. He's constantly calling it on the East Coast. Me and him are up at the same time every day. So it's just remote world challenges. But on that front too, I'd love to know what's the startup scene like in Denver? What's the VC scene been like in Denver? Just how has it been since you've moved out there? Which again, I know you've built a career out there, so you probably have a lot of perspective on that, but happy to hear more.

Tim Sprinkle:

Yeah, it's funny, I shiver a little bit when I hear the 2015 for that book because it was a long time ago. And I wrote it in 2013, so it's a really long time ago and things were very different then. So the book takes a look at different startup ecosystems and one of them I did was right here at home in Denver and Boulder. At the time it was kind of a small town with big dreams and the story was VCs were there, there was fairly small, I don't know, probably 10 funds total. Foundry Group was a big one and Brad Feld, [inaudible 00:02:47] the face of that at the time.

And that was fairly decent tech ecosystem, resulted in Google opening a big office out there. Twitter has a big office out there, a very vibrant startup scene, even today. The money situation has gotten a little complicated, so it has never gotten to let's say the Austin level, but things are good. I think our cost of living and frankly the fact that it's pretty darn nice here has made it really appealing to move from other places. So we're getting some of that leaving California traffic from some of the startups too.

Paul Davenport:

Absolutely. I don't want to put my sister and her husband on the spot again, but they're able to own property out in Colorado, whereas that is just not a reality here in Boston and I know California where I have family too, it's not happening. It's just the state of everything, you can look at inflation, you can look at interest rates, but just in general, some things have gotten weird over the past decade or so I think since the book was published.

But I do still think that those hubs that are outside Silicon Valley, the ones that are outside the coastal arenas, they're still driving a lot of innovation. It's funny, we were talking to Dallas Price, I want to say wow, probably like five months ago, and he was in Omaha, Nebraska, I think, on behalf of Forum Ventures just looking at the startup community there and the opportunities for investment because you really don't need to be in one of those hubs today.

That was an emerging trend, I'm sure when you were writing the book in 2015, but it really, really is true now. And again, I'm kind of proof of that. I'm based here in Boston. I work for a Vancouver company originally at least. But I want to know a little bit more about Tim too. Now you're in the startup space, you have all this expertise about VCs, you learned a lot writing the book, but how did you get your interest in the whole tech ecosystem to begin with or the startup and finance ecosystem to be more specific?

Tim Sprinkle:

Also you mentioned in my journalism career, so I did that for about 20 years. I wrote for a whole bunch of different magazines and websites in the early digital days and it was whole ton of fun. I got into that a little bit. I worked for Wired for a number of years. I was at Yahoo Finance, which kind how I got on the venture beat for a while there. And for lack of a better description, I was the guy who didn't live in New York, so I kind of got some of the weird stories as a result. You're in Colorado, of course you probably guess what I covered for a few years when cannabis became legal. That was my beat for at least a year. But a lot of this kind of goes back to just being where stuff was happening as Boulder was coming up, as Denver is coming up before things got a little crazy out here with all the folks moving in, there's a lot to cover here and I was kind of the guy in the area.

Paul Davenport:

I love that. So my background is in journalism too. I did the thing that you're not supposed to do and I went into marketing. So I love to hear that you kind of capitalize on being the guy who's not in New York. That was my fear that didn't have me go down the pure play journalism path, I'd have to move and also just the expense of living there.

Tim Sprinkle:

A hundred percent. I feel you.

Paul Davenport:

I couldn't do the math on that one. But now talking about venture capital marketing, I'd love to hear how you brought this business to life or how you would even describe the work that you're doing there and the service that you're providing, if service is the correct characterization?

Tim Sprinkle:

Yeah, it is, and it's pretty straightforward. It's taking the journalism skill set, the writing and all that sort of thing and what we now call content, which is the word I kind of hate, and applying it to VCs. Because VCs had a lot of cool stuff going on. They are themselves seeing the cutting-edge technology long before the rest of us are. And you mentioned the Omaha story, a lot of that kind of farm tech and things like that, there's a lot happening there that is flying under the radar, but the VC community gets it and they see this stuff.

And at the same time, one rich guy with money is the same as the next rich guy with money. And so you differentiate yourself on your experience and what you're seeing and what you're doing. You need to tell those stories and that's kind of where we come in. We're really kind being the storyteller. And marketing is in the name and I, like you, think marketing is a bad word, but the general gist is like we're telling stories, we're making these brands come alive.

Paul Davenport:

Oh, that's music to my ears. And also a lot of simpatico with what our mission kind of here at Boast is. Like I said, I'm not doing the pure play journalism in the traditional sense, but what I love about what we're doing is I'm getting to tell these innovation stories. I'm getting to talk with founders from all over North America. I love that you even mentioned farm tech to just put a keyword on it, for lack of a better word. Again, between content and marketing, we're going through some buzzwords. We need to retire fairly quickly here, but [inaudible 00:07:22].

Tim Sprinkle:

Thought leader's the next one.

Paul Davenport:

Oh yeah, exactly. But even in Alberta, I don't think of Alberta as being a hub for innovation. Since I've started at Boast, oh my God, farm tech and beyond, even just the minerals and mining services. A lot of things that you think of as legacy and state industries, those are just opportunities to innovate and those are opportunities to do things that will help you capture tax credits, help you tap into non diluted funding in the one corner, but also make you attractive to be seized.

So again, I think we're at a phase where a lot of those legacy industries are not falling by the wayside, but they're evolving and those upstarts are going to be ripe for investment and they're going to be able to cash in on this very shortly. So that's really, really cool to hear. I'd love to know too, tell me a little bit about the team over at Venture Capital Marketing and just beyond even the stories that you're telling, maybe some of the successes that you've helped drive.

Tim Sprinkle:

Yeah, we're super lean. All the writers are former journalists just like me because frankly I feel like that's the best training for this sort of thing. I'm correct I think on that. So we've got a very lean team of folks who specialize in, we work across the venture ecosystem, different verticals. We've got some folks who are dedicated to [inaudible 00:08:37] tech, which is one of them and more pure play B2B tech and we've got some folks who do healthcare, things like that.

But the whole idea is that our approach to this is not, I kind of hate the agency model because I think it just kind of shucks off low quality work on clients and I hate that. And so we spend a lot of time getting embedded with our clients, these are small teams. Most VC funds are not 500 employees, we're talking 10 or less. And so these are small teams that don't have a lot of time. So we embed ourselves, we get to know them, we learn how they think and that helps us on the content, on the marketing side of things, scale up what they're doing and tell the stories that are real and effective and not just cranking stuff out.

Paul Davenport:

I love that. And again, I'm going to shout out the bonafides of being a journalist or just even having that training in your back pocket. I think that's kind of been the silver bullet for me and my career, but all of the folks I went to J school with too, I mean we're the ones who I think can kind of bone up quickly on the story. When you join a team, it's usually in marketing, but when you need to learn quickly a complicated product, for instance, if you have that research skill set in your back pocket, you can dive into it. If it's about vetting candidates for investment even too, having that ability to suss out and get to the heart of what's really being said is a unique skill. And it's not something that comes out of the box and it's something that you do need the training and the real life experience to acquire. So I love hearing that you're a team of journalists. I just really want to cheerlead that and ring that bell one more time.

Tim Sprinkle:

I mean, I think that for me personally, just to go back on that real quickly is the experience of every day going to a staff meeting and pitching stories to people that I know, 10 or 12 of us around a table, and being able to do that every day it's just a muscle memory type of thing at this point because it has to be the best story I could come up with that day, otherwise I'm not working. So it's over and over and over again. It really is fantastic training for anything in communications.

Paul Davenport:

Oh, absolutely. I know we don't want to say agency again, but back in my agency life, that was my favorite part. I had my content team and we were all J school guys and it was awesome. Just getting up in the morning, I didn't mind having coffee and going to the office to sit with these guys. The afternoons were tough, but the mornings were really fun for what you just said.

Tim Sprinkle:

That's great.

Paul Davenport:

Yeah. So I'd love to know too about working with others just kind of in the community, VCs, startups or even just accelerators or incubators who are not even directly involved with what you would be doing. What is your experience working with kind of other stakeholders just in the market, whether that's locally in Denver or just for VC across North America?

Tim Sprinkle:

Yeah, honestly, my favorite part of this entire business and kind of why I focus on the VC side of it's the community. Yes, it's an industry, yes, there's a lot of money flowing around and things like that, but when it comes down to it [inaudible 00:11:20] relationships. And the tech world specifically here in Denver and other places like that, it's not huge. I can probably call up pretty much anybody in town and have lunch or have coffee.

We're not talking about a massive faceless industry. And that's my favorite part. It is like I've got relationships with people who are former clients, potentially future clients, who knows, but it's more relationship-based than pure cranking out content. And I really like that. I think that there gives us a lot of, we're all in this together kind of attitude and we're all kind of raising the whole ship that is Colorado to some extent. And so it's a fun way to do business where it's not super competitive because we're all kind of doing different things just along the same way.

Paul Davenport:

I love it. No, that's fantastic. And again, too, when you can really lean on your community, I've learned that talking to a lot of the VCs, I didn't understand what it looked like on the other side. Like you said it, they're not huge businesses. It's usually a handful of individuals. And it's their money and they have their opinions and you need to learn how to be a people reader and a people person. So I just really want to draw a fine line under those few points that you made there because that was really interesting to me and it reflects a lot of what I've learned too.

So I'd love to know too, let's get to the heart of what the learnings were in your book, but also what you've learned since writing the book about the kind of state of VC and the state of even getting funding and being a startup today. I mean, from the highest level, what's your current take on things today? I know that we see headlines saying, unless you're AI, you're not going to get some investment right now. I think there's a little truth to that at the moment, which is why we've been really pushing that non-dilutive funding angle. That's at the core of what we do here at Boast. But speak to kind of the current state and what startups are up against today, at least from your direct perspective.

Tim Sprinkle:

Good news is that since Covid we're all, you're remote, I'm remote, the remote thing is no longer a stigma. So being in Silicon Valley is also not a stigma. Great. That's fantastic. At the same time, your competition just went from the folks who were next to you in Omaha to everybody around the world. And it is exceedingly challenging too. I feel for a lot of those folks who are just coming up now because I feel like you need to be a real grownup business on day one and you need to be able to prove that on day two. And you can't just hope and pray to get yourself to a [inaudible 00:13:39] market fit.

The competition is so steep that it's not easy out there. And we're kind of in a situation where seed stage funding is one thing, getting to series A, series B is a whole different ball game. And again, more competition, more demands and things like that. It's not easy. It's nasty out there. I mean it was not easy back in 2013, 2015 probably, but it seemed like there was things moving.

Paul Davenport:

Absolutely. And I'm even thinking about, we had a chat with Lauren Thibodeau from SasSCan recently. So even though it's a lot of research being done in Vancouver, she pulled CFOs from across North America before. Just the kind of gold standard for your runway even has just gone up in the past three years, while 12 months might've been okay and even in those scenarios a lot of startup founders might've been fudging it and it was only really four to six months now it's like an 18-month minimum, 24-month even better, best, I mean 24 plus. But I mean no one gets that. You're not really even in the startup phase if you can bootstrap for that far. But I'm hearing what you are saying in a lot of these conversations too.

And again, getting crafty, I think doing your due diligence when you're getting sources of non-dilutive funding before you get to the VC stage or before you even start exploring equity, is something that I really want to emphasize. Not to be just pushing Boast, but if the government's going to help you cover your costs for research and development, you're doing something that's truly innovative and that's a bonafide and that's another kind of checkbox in your corner if you want to try to go out and get some funding. So just want to kind of hammer home on that given everything that you just said. And I'd love to know for venture capital marketing in general, what's on the roadmap for you guys? What's your plans for the future? Any exciting stuff on the roadmap that we can talk about here today?

Tim Sprinkle:

Yeah, no, we're kind of ramping up. The market for the VCs themselves has of course changed in the last year, year and a half. I'm sure you've see the headlines for that too, which is the whole other side of this conversation is it's tricky for them, which is why it's becoming trickier for startups to be totally honest because the capital isn't flowing. So for us, we're differentiating our clients, we're helping them tell their stories. Now we're going more practically out in the market and getting them in investor conversations and getting them in front of the right people.

The mix of potential [inaudible 00:15:59] partners has changed over the years. You've gone from, let's say former founders who totally know the tech and are deep involved and know what they're getting into just to totally a more generic investor who is invested in restaurants or dry cleaners and doesn't have a lot of experience in tech but is curious about it. The VCs need to be able to meet them halfway and get them excited, get them interested and share the opportunity with them and that sort of thing. And that takes a different kind of conversation, different kind of skill set. And that's where we're leaning is to help them raise more money so that more money flows to startups for sure, but also just establish themselves amongst a broader market.

Paul Davenport:

That's a great point. And again, I don't think something that a lot of the founders who we speak to and in who I believe are part of our audience today are considering necessarily just what VCs themselves are up against. I love that point you made about meeting in the middle a little bit or just kind of meeting investors where they're at in terms of VCs and getting them to join in. Because I hadn't thought about that, but you do see, I mean we've all been shark tanked. I'm like, why is Mark Cuban invested in all these very, very disparate general businesses? And I won't comment on how that's worked out for his strategy long-term, but I mean when you look at that and then you see the people who are getting into tech for instance, and they don't understand it, but they see that shiny object.

It was maybe Web3 a couple of years ago, now it's AI today. I think it's probably going to stay AI for a little bit of the foreseeable future, but those generalized investors want to get in on that because that is a shiny thing today. And VCs now really have to put that forward and really have to demonstrate that, hey, if you want to be more than just a generalist and you want to be on the hot new thing, which the camera has finally turned to us, we've got that. How do you demonstrate that without getting too in the weeds too? I want to go back up to that 20 to 30% AUM stat that I mentioned at the beginning. What's some of the magic behind getting that for you and your VC customers? I think we touched on it a little bit with all of our journalism speak, but I'd love to hear it from you.

Tim Sprinkle:

No, the truth of the matter is that's on the low side because VC is in general a B2B market. So we're talking to other essentially businesses and their former investors and what it comes down to is 4,500 VC funds in the US last week, let's say 10 of them are doing a really good job at their marketing and better messaging and putting things out there. You raise your hand, you get active, you start doing things, that bumps you up so quickly because the competition is not doing it or not doing it very well, to put it nicely.

So there is a very wide open space. And this is the kind of thing you see across other industries. I've worked with some clients in construction and kind of home real estate and things like that. Same deal. No construction company is doing a ton of digital marketing. So the 10 that do it are the first results you see and the first one you think of. And that's to your point about outside investors may not know the tech thing, as a VC, you need to be in the middle of that network. You're the middle of that world understanding what's happening there and that's where you want to broadcast that. And if you do that, if you get there, you're in good shape.

Paul Davenport:

Absolutely. You want to as that VC, I'm just repeating you, be at the middle of that world. I think that is fantastic and a really good point to make. Tim, this is awesome stuff. Before we wrap up, I'd love to know, any additional suggestions for any founders out there on how to navigate the headwinds today. We did talk on the VC side most recently about what they're [inaudible 00:19:22] facing uniquely. But for founders too, we touched on it's tough out there. Make sure that you're actually driving unique innovation. That's a point that I'm always trying to hammer home. But what can you say in terms of funding and in terms of making yourself more attracted to VCs, the headline should be for folks listening today.

Tim Sprinkle:

Yeah, I mean any VC is looking for an opportunity to scale your company and take a lot of money out of it. So you need to make that roadmap very clear. It can't just be we're building something amazing and it's going to be great. They need to see what the next five years look like for that technology and how big that market can be so they understand where the opportunity really is and what the big picture number is.

And that goes back to this is something I saw in some of the off the beaten path markets back in the day, Vegas, Kansas City, was you need to have a real business. You need to have numbers, even if you're not driving revenue on day one, you need to be building like you are. And you need to be really proven and not just flying by the seat of your pants. I think that's a big differentiator right now. VCs are leaving it more and more kind of later stage to get the bigger deals. And so it needs to be the kind of deal where it looks like you can be a billion-dollar company down the road if everything goes right. So you've just got to prove it to them.

Paul Davenport:

Absolutely. That's a great point. And I think calling back to there was a flood of investments at the height of the pandemic, and I think that VCs have gotten very wise to what that risk was. A lot of those businesses don't exist today, and that's why VCs are tightening their budgets now probably. At least one dimension of it all. So I want to say it again, really, really show that this is a real business. You need to have the real numbers. You need to actually have the proof in the pudding. I think another thing that keeps coming up on these shows is test with your customers early or your potential customers early. Do that market research while you're actually building the product. You don't want to get so far down the line that you've built something that no one wants to buy and then good luck when you get to the VC stage.

So again, really prove your business, really demonstrate the value and your business plan, work with partners who can help you build that business plan as well. And again, if you're having any help with go-to-market or if you need that help with go-to-market, there's tons of solutions out there. If you're a VC, obviously talk to my friend Tim here. But beyond that, again, connect with the folks here at Boast.

We have a wonderful network of all kinds of ecosystem partners that can help teams shore up. I highly recommend that teams keep their technical work in house because that's when we can help you get those tax credits. And also it helps you retain more equity in the solution that you're driving, but beyond that, partner with the ecosystem, reach out to your networks and I think you'll be in a good position relative to all the challenges that are out there. So that's fantastic.

Tim Sprinkle:

No, I think that overall for the startup market and for VCs in general right now, things are looking better. I think we've got a, let's say, optimistic outlook for the year. And I think that we are getting into a situation, you mentioned AI, I think it's going to drive a lot of this, but there's a lot of cool, exciting innovation happening. There's a lot of cool, exciting opportunity out there, and I think people are surprisingly certain to say, okay, no things aren't going to collapse. Let's go ahead and really build this back up again. And I think that we're going to see a few more years of good times again, hopefully, to get this going.

Paul Davenport:

I love it. I love the optimistic ending. That's perfect, Tim. Well, Tim, I cannot thank you enough for joining us.

Tim Sprinkle:

[inaudible 00:22:42] Paul, thanks for having me.