From audit to venture capital with David Barnthouse and George Lester

David & George, thanks for talking with us! Tell us about your background.

DB: I went to the University of Kansas where I got my undergraduate and master’s in accounting. From there I started out at KPMG in the audit practice in Kansas City. I did a little over 4 years there and then I left for a corporate accounting role for about a year and a half at a private equity backed digital legal solutions firm, Unitedlex. About a year ago I joined Nueterra Capital where I am now a senior financial analyst.

GL: I grew up in Kansas City and then attended the University of Missouri to major in accounting. Several of my other family members had gone that route growing up and had gone on to have successful careers, so I figured give it a whirl. From there I interned at PWC and took a full-time offer in the assurance practice. I stayed with PWC for three and a half years. Starting in late October of 2020, I started looking and decided to take a role at Nueterra Capital where I'm also a senior financial analyst.

David, can you talk a little more about your career transitions over the last several years?

DB:  I was about a year out from being a manager at KPMG, but when I started evaluating the job market, I had to consider whether making manager would impact the jobs I could get now versus jobs I could get with the manager title. My decision was that it wasn’t going to make a big difference on the jobs I could get whether I left then or waited until the promotion. Overall, I figured a year of working and learning how a company operates was just as valuable as becoming a manager in the audit practice. 

When I took the corporate accounting position at the legal solutions firm there were a lot of learning experiences at first since it was a large company; however, over time I was doing more routine daily or monthly tasks. I took the position at Nueterra because of the industry and job opportunities. I always wanted to do M&A type work and at Nueterra I get to get involved in all different types of valuation and due diligence. 

What advice do you wish you had when you were evaluating that first role after KPMG?

DB: I would have taken a step back and looked at the direction the company was going in the next two to three years and not focused as much on the present. It’s not focusing as much on what your current role is, but what is the state of the company you’re going to and what they are moving towards that I would have evaluated more.

To build on that, how would you advise someone on the right time to transition out of public accounting?

DB: First thing is you’ll start to know when it’s the right time. Obviously, you’ll have some rough days, but when those days turn into weeks or months, and you start to lose the joy of going into work then you might want to evaluate what else is out there. For my first couple years I didn’t even look to go anywhere because I enjoyed going to work every day. Over time I realized I enjoyed working in audit and the people I was working with, but I did not see myself doing auditing work for the next 20 years of my career.

GL: One way I evaluated it is whenever you feel the learning curve flatten a little bit, then you should at least look at the next level and see if it still appeals to you. As a first-year associate, you dive in and you learn a ton but once I was settled into that role, the idea of leading a team as a senior still really appealed to me. But as I started to get settled in as a senior associate, the manager level – where you start to deal more on the budgeting and business development side of things - didn’t appeal to me as much, so I started to consider moving on.

Can you guys tell me a little bit about Nueterra Capital and what your roles are?

DB: Nueterra Capital is a venture capital firm. We mostly focus on early round seed and some later round investments primarily in healthcare companies. We’ve invested in all aspects of healthcare - from the real estate of the medical buildings, health care providers, healthcare technology and services.

GL: David and I are Senior Financial Analysts here. I mostly assist with month-end accounting on the real estate entities we have invested in. Outside of month-end, we help with due diligence on any investments we’re looking at. That’s what interested me about making the switch to this role. As much as I’ve loved learning about accounting and understanding the language of business, I’ve always wanted to have more of a forward-facing role where I have input on potential investment decisions.

DB: We’ve also had the opportunity to sit in on potential investment pitches where we get to listen to executives for these companies and then help our team break down the investment decision. Our voice matters and our opinions help if we’re going to invest or not. It’s exciting.

What are some ways public accounting has helped you in your current roles?

DB: When you’re in public accounting, you don’t realize all the skills you’re building. You’re able to look at large groups of data and manipulate it in a way that makes sense, which you don’t realize you’re doing as an auditor. 

GL: Due diligence work is like auditing just without the audit standards. You’re still trying to realize what numbers are real and what makes sense. There will always be estimates that affect the valuation of certain deals, so the audit background really helps understanding the reasonableness of those factors. 

DB: Communication is another key skill you develop in public accounting. You learn how to talk to controllers and executives as a 20-something by breaking down complex issues and showing how it’s valuable to them. 

GL: And those communication skills stretch to emails as well. You learn how to lay out your communication to get the answers back you want from the client. If you ask for too much, or aren’t clear and concise, then the client will just disregard your question.

Could you provide some insight on the venture capital work and what you’ve enjoyed about it? 

GL: You see something different nearly every single day. You get to have an idea of potentially something that might intrigue you and take it from there. It’s a little like auditing where you see a bunch of different clients and see what you like. 

DB: And with early-stage companies you get to see the growing pains. You learn what some companies do well and where others struggle. If I gain that knowledge by seeing multiple different companies at various stages of growth over the next several years, then I consider that significant experience I can’t gain anywhere else.

In venture capital, you also evaluate a company differently than you would a more established, publicly traded company. In VC, you dive more into the leadership of the companies and who you want to work with. Some of these young CEOs and CFOs of companies we invest in are hungry and you see how excited they are to grow fast.

George, if you could go back 8 years would you do anything differently?

GL: I’m not sure there’s too much. The route I took was perfect for where I am now. I loved my time at PWC, honestly, and it was a great experience. I keep in touch with a ton of people from my time there. So, no regrets from public accounting or anything like that. 

Any personal mottos or phrases you live by?

DB: I live by the belief to try everything twice. Doing something once and failing doesn’t mean you should give up hope, but instead go back and try it again. A lot of people get discouraged when they attempt something new, but you can’t be frustrated. You’ve got to try it again and I think there’s a lot of learning that comes from the second attempt.

GL: Not really a motto, but we have Theodore Roosevelt’s “The Man in the Arena” speech hung in the conference room here at Nueterra which is a great reminder to follow your passion.

Last question - what are your long-term goals and how has your time at Nueterra helped shape that insight?

DB: Eventually I want to work my way into a leadership role - whether that’d be as a CFO or CEO. Right now, we get to see what early stage companies are doing really well and what some do not so well. If I can gain all that knowledge and see a hundred companies over the next 5 or 6 years then that’s significant experience I can’t gain anywhere else. Hopefully I can take one or two good things from each company I see and then bring it into Nueterra or some other organization.

GL: I totally agree. Just trying to get your feet wet with as many different things as possible. The goal is to end up in a leadership position, but at Nueterra you get to see something different nearly every single day. I’m hoping to get an idea of something that really intrigues me and take it from there.