Barry Sandweiss started Cultivation Capital around 2011 along with former entrepreneurs. So, he says, the fund is naturally entrepreneurial.
"We know what it's like to sit in the chair of a founder," Sandweiss says. "Every one of the general partners that we have around all of our verticals of Cultivation Capital — we operate in four: life sciences, ag, geospatial and what I call like FinTech, financial services. We all have had at least one exit, and in most cases, multiple exits. And so our perspective is really created by who we were and what we did."
Now on the other side of the investing table, Sandweiss says they try to be transparent and upfront with their targets about what the diligence process entails and the timeframe.
"Too often funds forget that companies that are raising capital, they need it fast. And the definition of fast is different to everyone," he says. "So, one of the hallmarks of our group is, if we're going to put you through diligence, we're going to tell you how long it takes, and then we're going to be communicating with you almost every day as we go through the process because if we're going to take you through the diligence process it's time consuming for us, and we want it to work."
Another significant aspect of Cultivation's approach is that they take a board seat in every company they invest in and become active investors.
"This idea of sitting on a board and coming to a meeting once a quarter, that's required," he says. "But we know the best form of an investment in the early stages of these companies that we invest in comes in a form of a contract — a sales relationship with a customer that can buy your product. So, most times, almost 100 percent of the time, a partner that leads the deal, inside of Cultivation Capital, leads the deal to bring it about to fruition and close the deal with the idea that we're going to be able to go with that company and help them open doors that they probably couldn't open on their own."
Sandweiss says the tact they take as investors isn't to tell their portfolio companies what they should do, but rather what not to do.
"With the kind of depth we have sitting around the table, we know more about the wrong moves to make, maybe not as much about the right moves to make," he says.
Sandweiss spoke on the Smart Business Dealmakers Podcast about the many businesses he's launched and exited, and how those lessons translate to his approach as an investor.