Early stage investing with Ed Frindt

Private Equity
Venture Capital

Ed Frindt is an EY alum and partner at KCRise, an early stage venture fund. Enjoy the read!

Excited to have you, thanks for joining us! Tell us about your background.

I grew up in Cleveland and wanted to go to a bigger metro for college to study business. I was on my own paying for school, so I scoured every scholarship under the sun…and landed an accounting scholarship to Loyola Chicago, despite not knowing a thing about accounting.
I knew I wanted to use being in Chicago to my advantage to work while I was in school. So I started looking for internships during my freshman year, and ended up at a wealth management firm two days a week. I wasn't actually doing an accounting internship, it was a pure finance role. So I picked up a finance double major. Those two things tied together well, although I’d recommend to any current students to add computer science with either finance or accounting.
I took a semester off of school for a busy season internship with Ernst & Young, which is obviously a lot more intense than a summer internship. It was there I realized that enjoyed private equity, hedge fund and VC clients (and plenty of things I didn’t like). I networked within those groups and pushed to make sure that I got onto those clients when I started full-time. So networking should really be a priority, even for college students. Especially with alumni, who really enjoy helping students from their alma mater (speaking from experience!).  

Did you start at EY after graduation?

Yep, the internship paid dividends in a tough job market, post-tech bubble. You start in a class with a bunch of other up and coming, smart people that you can get to know in a very “cohort” type way. So if you're in public, really get to know the people who you've started with. Obviously public is a high churn industry, so people will be leaving the firm and going to work for interesting companies all the time. That network will continue to blossom as your cohort starts going all over the country. Also make sure to know the different departments within the firm. One of my disappointments with being at EY is I never thought to learn about the other service lines, like M&A and consulting, which I think would have better fit my interests.
Three years in at EY and felt like I was being a little bit stagnant. Each year was the same, I wasn’t really learning new things. But I kept in touch with the Controller at one of my clients, and he became the CFO of a new PE firm that was forming. He called me up a month after he started, because he needed a second person. The quickness with which I made the decision was a sign that I was ready to leave public.
So I took the Controller position at that company, a middle-market private equity firm in Chicago. I was working on internal financial reporting processes, investor relations, financial planning items for the firm, but not necessarily working on deals. Spending too much time in a back-office position means you have to work extra hard to build relationships to set yourself up for success in a broader sense. So that’s what triggered me to think about what’s next. In 2012 I applied to the MBA program at Chicago Booth, and that was the best choice I ever made.

Why did you move from PE to VC?

In business school I was quickly drawn to coursework in product development, innovation, design thinking and new venture creation. I felt like being around entrepreneurs were much more “my people”. CEOs of PE-backed businesses are at a much different stage than an entrepreneur building something from the ground up, trying to get the company’s first customers or seed capital. Being a part of the “building” conversations and seeing the fire that someone gets under them when they realize that this is on them. You get to see some kind of superhuman traits from people and I realized those are the types of people that I want to be around. In any part of life, you’ve got to find the people who energize you.  
I also realized that I actually had some decent advice to share with early-stage companies. I could be a mentor or sounding board, even if that just meant making connections and spreading the word about their product around the city.
A pivotal moment for me was a class at Booth taught by Brad Keywell and Eric Lefkofsky, who built Groupon, their own VC firm, and are now founders at new unicorns, Uptake and Tempus. It was clear that they surrounded themselves with smart people in their careers, they hustled, and they took big risks. They had some successes and some failures early on, and they weren’t afraid to share those. I hadn’t met people so successful, who were so humble and transparent. I was really inspired and knew I wanted to be in their world. Brad and Eric also inspired me to teach as an adjunct, which I’m lucky to be doing at Rockhurst’s MBA program.
I also began networking with tech founders and VCs during school. Every night in Chicago, there would be some free happy hour event with a panel or a pitch competition. I just found myself showing up to all of those and actually looking forward to them. And so after I graduated, I wanted to combine my background in PE with being around startups, which led me to venture capital.  

So how did you break into the industry?

If I wanted to be in venture, the most logical path was going to be in a finance role given my background. But not many firms have a dedicated finance position, most of them outsource it until they’re big enough to justify having someone internal. OCA, the firm I ended up joining, was on its third fund and had a fractional CFO. She knew the auditors of the PE firm I worked for. The CFO was looking to step away, and the auditors passed my name along (the value of networks in action!).  
This was more of a jack of all trades role, a lot of work with portfolio companies that don’t have a finance team. This is very different from PE, those portfolio companies would certainly have a CFO and somebody with really strong financial reporting acumen. That’s not always the case at a 10 person, venture-backed startup. So there are different KPIs and reporting standards that, as a CFO at a VC firm, you can really add a lot of value to the portfolio companies and to the firm. I really enjoyed the challenge of taking on that role and learned a ton about traits of successful VCs in a short amount of time. Also enjoyed how collaborative and supportive the industry is, which is pretty unique.

How did you come to join KCRise? It seems like a difficult move, you went from a non-deal role to a deal role and went to a new city.

My wife is a Des Moines native, KU grad, and she loved living in Kansas City after school. We met in Chicago, but she was always raving about KC and taking me there for weekends to see her good friends. First time I visited was the night the Royals beat Toronto to reach the World Series in 2015. The Plaza was covered in blue, people were pumped, I felt like there was something special about the city. It has a very cool urban core, diverse neighborhoods like Chicago, and was up and coming in terms of and the tech community.
We had also made two investments in Kansas City while I was at OCA. Something about the nature of people in Kansas City lends itself to the venture world…all about building genuine relationships and opening doors for each other.
On a trip to KC in 2017, I was introduced to Darcy Howe, who had just raised capital for KCRise Fund I. I was quickly amazed by Darcy’s optimism and hustle – she was the ultimate connector and had created a sizable fund completely from scratch. She was looking to add a second person to grow faster, and I thought “why not me?”. It wasn’t the timeline that I had originally set out, because I really enjoyed what I was doing at OCA. I learned a lot from some very experienced people there, and it solidified my interest to build a career in VC. But opportunities to help build a new firm are super rare, and I kept having this quote in my head...something along the lines of: “once or twice in life, someone is going offer you an opportunity you’re not ready for. Say yes – then learn how to do it later”.
And sometimes in your career, changing cities is the way to break into a new field. For me, it ended up being really beneficial to have a network in two cities at once. Darcy was creative in seeing the benefits where I could continue to live in Chicago and spread the word about KCRise with all the Chicago VCs. And that was really good for our business, as we are co-invested with more VCs in Chicago than any other city.
So for about a year I took a 5 am Monday morning flight down to KC and took the Thursday afternoon flight back to Chicago. I did a bunch of networking with VCs in Chicago on Fridays and weekends. It was a grind, but I look back very fondly on that year of my life (but not the Monday morning flights).

If you were coming out of school, knowing what you know now, would you join a high growth startup?

If you enjoy working with builders and a startup feels right, you should go work for a startup. The work will likely be more meaningful, you can have success and rise up the ranks much faster compared to joining a Fortune 500. The case for joining a startup is that you learn more about actual business building. And it’s probably just a lot more fun. There's definitely a lot more risk involved. But I want to be around people who are trying to build things that could quickly disrupt large industries. There's no shame in joining something that you personally believe in.
There are startups out there in every sector and you should go find something you love reading about in your free time. You could probably join a company building something related to what you may think could only be a hobby for you. Also, startups open up doors in terms of building a super broad network faster than almost any other job.  

What are some of the most important things that you’ve learned about careers and business from being in VC?

Keep a running list of any good ideas that jump into your mind. A business idea, an article you want to refer back to, a reason to ping an old colleague,. My go-to tool for organizing thoughts is Notion. Highly recommend.
Keep a personal CRM, and surround yourself with connectors (and people who energize you).
Create a personal “Board of Directors”, and make sure it has three types of people - sponsors, fans and critics.
Ask for help if you’re stuck! You might think it feels embarrassing, but it often creates a closer bond with the person helping. People enjoy when they can give advice or a personal story.
Remember to thank people, even when they help you with something small. Or even if it was someone who inspired you years ago – you can always shoot them a quick note of appreciation. And always pay it forward.

What are your career goals? Life goals?

My career goal is to help build companies from the earliest stages that will become the next Garmin, Cerner, H&R Block, Lockton, Burns & McDonnell for Kansas City. Companies that will attract tech talent from across the country and build generational wealth for their founders and employees.
My personal goal is to empower others. And never take life too seriously.

Can readers connect with you? How should they do so?

I am constantly on LinkedIn. If you shoot me a connection request and a note about yourself, I’ll definitely respond!

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