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Uncharted Entrepreneurship - hosted by Brent Peterson out of the Minnesota chapter of Entrepreneurs’ Organization – brings you daring stories straight from the trailblazing entrepreneurs who are unmapping business frontiers across every industry. Settle in around our virtual campfire as Brent sits down to pick the brains of startup pioneers, visionary founders, and intrepid CEOs whose origin stories - marked by unexpected twists, lessons, and stumbles along unpaved paths - will inspire your own trek in launching a boundary-pushing venture. Trading war stories, strategies, and even warnings, these audacious guests invite fellow founders and future leaders into their confidential circles in a uniquely transparent, wise, and motivational way. So join us off the beaten business trails to light your entrepreneurial fire!
Brent Peterson (00:01.351)
Welcome to this episode of Uncharted Entrepreneurship. Today I have Patrick Donahue. Patrick is the CEO, co -founder of Hill Capital. I hope I got all this right, Patrick. Go ahead, do an introduction for yourself. Tell us your day -to -day role and one of your passions in life.
Patrick Donohue (00:16.462)
Excellent. Well, great to see you, Brent. I appreciate all the work that you do for entrepreneurs. So it's wonderful to be with you today. My background is really all around finance. And so early on, I actually, as a little kid, sold lemonade with my cousin Chad. So started with that, but
everything evolved in and around finance. So I always have been fascinated with money, how it moves, why things are valued the way they are. And so there's a lot about me on LinkedIn and so on and so forth. But the thread is I've always enjoyed understanding what builds value for businesses and why products are priced the way they are. So that's the common theme. And so that speaks to my passion and my interests in what I do day to day as a
for Hill Capital and with Hill Capital we invest in businesses. So we're investing half a million to a million dollars directly in growing founder led small businesses.
Brent Peterson (01:15.911)
And you do have personal passions as well outside of business, right?
Patrick Donohue (01:20.622)
Very much so, yeah. So I do love to downhill ski. I actually teach skiing. So the last several years I've skied over 50 days, mostly at Buck Hill, Minnesota, but also a number of days in the mountains. And then in the summer, I'm an avid water skier and just spend a lot of time in the water, whether paddle boarding or fishing or whatever.
Brent Peterson (01:41.191)
That's awesome and for people that aren't familiar, for all of our listeners, Minnesota is actually a great place to learn downhill skiing. Hard to believe, but tell us why.
Patrick Donohue (01:48.544)
It is. I tell. Yeah, well, I tell people Buck Hill in Minnesota is one of the best places in the world to learn. So actually some of the best world class skiers like Lindsey Vaughn learned right here in Minnesota and specifically at Buck Hill. And there's a number of reasons for it, but it's just very approachable. It's easy. The runs are shorter and we have what they call magic carpet so people can shuffle up and stand on it and pulls people right up.
When you're in the mountains, you just have much less of that if any of that at all. And so it's a wonderful environment for people to be able to learn the wonderful sport of downhill skiing.
Brent Peterson (02:28.903)
Great, perfect. So, okay, so before we get into content, and we're gonna talk about breaking out maybe some valuation about breaking out or break out some evaluation, coming up with some different aspects of what we're gonna talk about today. And Jack Daly, I think there's another good topic, but you have volunteered to be part of the Free Joke Project. I'm gonna tell you a joke, and all you have to do is say, give a rating for the joke, one through five.
Patrick Donohue (02:38.222)
Yeah.
Patrick Donohue (02:46.734)
Yes.
Patrick Donohue (02:52.238)
All right.
Patrick Donohue (02:56.942)
Okay.
Brent Peterson (02:57.479)
Some people have given a rating of 1 through 10 and they've given a 4 out of 10 anyways Yes, yeah, I'm gonna round up no matter what
Patrick Donohue (03:03.438)
so you just cut it down to a five. So that is the great thing to do. Now, over my shoulder, it might be a little reflective there, but you see my sign that says, Dad jokes told here. So let's do this.
Brent Peterson (03:17.415)
Alright, we're in the right room. Alright, here we go. I asked my venture capitalist when we would get funded. They said March 1st. So I walked around the office a bit.
Patrick Donohue (03:35.278)
Poof, it's definitely not a dad joke. So, you know, on a dad joke scale, it'd be pretty low, because most kids wouldn't, you know, that'd be a little tough for them. But I'll give it a four. That was good. Especially for me, I might have to tell that joke as a venture capitalist. So that was good, Brent. So.
Brent Peterson (03:50.919)
Alright, it's an EOJED dad joke. There you go. Alright, I understand you have one for me. Go ahead.
Patrick Donohue (04:01.678)
So I've got one for you. So do you know what Beethoven is doing in his grave? Who is decomposing?
Brent Peterson (04:09.287)
No.
I should have seen that one coming. Your delivery was much better than mine too. I kind of screwed up my delivery at the end. Anyways, let's get started. I'm sorry, geez, I'm gonna give that a five. I love that one, that's a great one. I'm gonna reuse it. Thank you, thank you, Brooke. All right, so.
Patrick Donohue (04:15.598)
Yeah, there you go.
What?
Well, you need to rate the joke, Brent.
Okay, awesome. So my daughter told me that one the other week, so I'll give credit to Brooke.
Brent Peterson (04:37.671)
Tell us, give us a little bit of background how you got interested in what you're doing and kind of that journey through your funding.
Patrick Donohue (04:45.71)
Yeah, I have always been interested in why things are valued the way they are. And my career started early on in a typical, what they call a Wall Street job. I wrote research on publicly held companies, then I flipped into investment banking, helped them raise money. And the reason I share some of that background and context is because it really started to bug me how disconnected Wall Street was from Main Street.
and how small companies really had a hard time raising capital and being able to build and grow. And so that was really the impetus to help me start and found Hill Capital Corporation as a way to help companies think through and to get better at being able to raise money, access money as an investor. And so a lot of those things are the issues that I think through on a daily basis is why
Finance is so hard for entrepreneurs and how to really help level set. And it's a big reason why I wrote the book, Breakout Valuation, is to help entrepreneurs think about how to access capital and utilize finance to their advantage to build value.
Brent Peterson (05:57.223)
Yeah, talking about just accessing capital, is there sort of a minimum threshold that a business would look at before they look at getting a venture capital funding or angel investor or something like that?
Patrick Donohue (06:10.83)
Yeah, and it ebbs and flows and everybody has various opinions. But the big picture these days, if somebody is looking for venture capital, traditional venture capital, they're probably having to raise a minimum of $5 million. And might one be able to say three, but the real institutional venture capital is running very, very large funds. And so they need to really write big checks. And so.
Traditional VC, that's where the model is broken down because it's gotten so big. Now, angel investors have gotten a lot more, have been able to pull together a lot more money. So like AngelList and some of the angel groups and so forth, you know, they're able to pull together a few hundred thousand dollars. And so that can work as well. The one thing I would recommend for entrepreneurs is to really think through what they're looking to accomplish long term, what they're...
what I call magnetic vision is where they want to go into think through how much money that that might actually take. Now, if it does take, you know, 10, 50, 100 plus million dollars, then it's definitely a traditional venture capital route. And they should start those conversations as soon as they can, even if it's in the early stages and they only need a few hundred thousand dollars. So a lot of it really depends on the long term vision of that founder and what they're looking to achieve.
is where I would help point them to the conversations that they should start immediately for capital.
Brent Peterson (07:42.151)
And I think the entrepreneur founder would expect to give up a little bit of control in their company as well then when they're bringing on some funding.
Patrick Donohue (07:52.526)
Correct. And I love that you brought that up Brent, because that is a really critical question early on when a founder does have control, when it might be just a handful of people. Now, if a group of founders wants to be able to build this business and own and control it for 10 or 20 years, then venture capital is not the right route for them. Venture capital, and even to a larger degree, angel capital, they're going to start to lose control. And...
That's just the reality of selling stock because stock with it comes voting rights and they'll request board seats and being able to have oversight in the business. So I always encourage entrepreneurs, the founders to really think through what they want to accomplish because if they want to build a family held or a closely held business that they might hand over to the next generation, they need to really think strategically about what kind of outside capital that they bring in to be able to build that business.
And in that particular case, that's where they're going to want to bring in if they need outside capital. One, the best thing is to bootstrap to utilize internally generated profits to be able to build the business. But if they do need outside capital, it is in their best interest to have something that they can pay back. I try to avoid the word debt because there's a lot of preconceived notions of what debt is and is not and so forth. But the reality is, is that
in security and something like debt or debt itself that can be paid back is really important for founders that may want to own and control their business long term. Now, if they're opening and want if they're open and want to have partners that are owners in the business, by all means, great path to go down with angel investors, individual investors, and then to bring in venture capital partners. And I just I'm happy you brought that up, Brent, about control because.
Unfortunately, I've seen so many entrepreneurs where they go down the path of bringing in angel and venture dollars and all of a sudden they realize that they're not in control anymore. And that's a really sad day because you can't really undo that. So it is important for founders to think through that early on.
Brent Peterson (10:04.135)
I did. So in your book, one of the things that you really point out is the fact that you should be thinking about your exit when you start and you mentioned earlier about if you're in it for 20 years, a lot of times you're not thinking about your exit. and most, you know, my most recent experience was with a, with a PE, a private equity company. And a lot of times their exit is two to three years. Their turnaround is to talk a little bit about the importance of no matter when you.
Patrick Donohue (10:16.558)
Yeah.
Patrick Donohue (10:25.166)
Yes.
Brent Peterson (10:34.087)
Expect but that exit just pre just starting out with an exit, right? I think that's one of the things you talked about
Patrick Donohue (10:42.99)
Very much so, is very much to, as Stephen Covey would say, start with the end in mind, but understanding what you're looking to achieve. And for entrepreneurs in particular, and I know Brent, like you've gone through this and we know a number of people in entrepreneurs organization, but for a lot of entrepreneurs, it's a big question of like, what next? Because after they sell the business, then, you know,
all the entrepreneurs I know, myself included, like they just can't sit still very long. So then they're on to the next thing. So it's really important to kind of think through what they want to achieve. So that exit planning is really important. And for some business owners, it doesn't need to be an exit plan being a sale of the business for cash. It may be that they truly become an owner.
and they're hiring all the people that can run the business day to day and they can step away and just truly be an owner of the business. And so there's a lot of opportunities for entrepreneurs to fully unpack that. There's a number of good books that are written about exit planning and there's a whole profession around exit planning. So there are consultants out there and I just always highly encourage entrepreneurs to lean into that and think through that sooner rather than later.
Brent Peterson (11:59.431)
Yeah, I think, I'll talk a little bit about EO Minnesota, Entrepreneurs and Organization in general, that it does wake you up to many concepts that you, that I'll just use my own personal experience, that when I was younger, I didn't even think about those things. I didn't think about exit strategy when we started our newest business or our.
the business we recently sold, I wasn't thinking about it when we started it, but at some point we were like, this, maybe we should start doing it. And it took a lot of work to get it in, get all those things in place, you know, finance and making sure your books are ready for a, you know, for a, an investor to look at, or even, you know, for a sale, all those things that you don't think about. And I think entrepreneurs organization gives you not, not necessarily the tools, but the access to the resources that you need to.
Patrick Donohue (12:35.342)
Exactly.
Brent Peterson (12:52.295)
take that and go to the next level.
Patrick Donohue (12:55.15)
Very much so. I mean, we bring in a lot of wonderful speakers. We bring in a lot of content. And so, but it's really up to the entrepreneur to lean in and unpack and dig into the things that are going to move the needle for them at that point in time. And so we're not a university. It's not some program that you have, you know, have to go through. It's up to the entrepreneur to really identify and select and lean into the things that can help them at that point in time.
Brent Peterson (13:25.607)
Yeah, and so you were the outgoing president of EO Minnesota. Tell us some of those experiences that you went through that were rewarding but also difficult.
Patrick Donohue (13:37.262)
Great question. So when I, we are all members of EO Minnesota. Today we serve about 175 members of EO Minnesota. And we're part of a global organization that has over 20 ,000 members throughout the world. And so I joined as a member and as I got involved at one point somebody asked me to help out with some stuff and I did. And.
I really enjoyed it. I really enjoyed, you know, joining the board and in, in meeting new people, as a, as a healthy way to be able to get to know others and so forth. And then, I ended up becoming president, which was completely unforeseen, not something I ever had on my, to -do list or goals at all, but it just unfolded where I was leaning into things, asking questions. And, one of the outgoing presidents a years ago just said,
you know, would you be willing to, to serve the organization as president? And I thought about it and I just reflected back. I said, if you feel like I can add value to the organization and it needs, you know, what I can bring to the table. And so that's how it, that's how that happened. And so I give that as background and context because for me, it has been one of the most rewarding experiences I have ever had is serving on the board. And then especially as president because.
All of us as entrepreneurs are really, we're all visionaries. And so a lot of people will talk about like leading leaders, but I don't even think that's a fair analogy. It's more like leading other visionaries and it's a whole different ball of wax. And so for me, it was a very interesting journey. And so then your question was like, what was, what was good and maybe not so good, but you know, with that is inherent.
you know, challenges, everybody's paying dues as a member. Nobody's being paid to be on the board. We're all volunteers and so forth. And so kind of thinking through and learning about, you know, how to inspire others to take action and how to deal with things that are administrative or like a governance issue or things that people don't want to work on. Like how do you get through those things? And so there's definitely a grind to it. But at the end of the day, it was extremely rewarding because.
Patrick Donohue (15:57.486)
of the personal development that I had through the whole process. So whether it's EO or a rotary club or whatever nonprofit people serve, I would encourage people to get involved because it's more about your personal development than it is anything else. It's a unique challenge that's worth going through at some point in your career.
Brent Peterson (16:17.575)
Yeah, yesterday you brought in Jack Daly, which is a world renowned sales speaker. It's a speaker in general. And I think in our green room, we'd said if he was going to talk about physics, we'd be enthralled by his physics talk. One of the points he had right away was relentless. He had mindset, which I think is great. We don't have a lot of time to get into the mindset, but I think the mindset is the most important pivotal point for all of us. But that relentless energy that you demonstrated as president, tell us.
Patrick Donohue (16:21.934)
Yes.
Patrick Donohue (16:30.03)
Exactly.
Patrick Donohue (16:36.142)
Yes.
Brent Peterson (16:47.431)
Talk a little bit about how entrepreneurs, like there's something secret inside that we don't know we have, but comes out as relentless energy.
Patrick Donohue (16:57.454)
Yeah, that's a really, that's a really interesting question. I, you know, Jack Daly talked about grit quite a bit yesterday, and that's absolutely true. But I love that phrase that you just used, relentless energy. And I think about that a lot because, you know, as Jack talked about, I think about the mindset quite a bit. And at the end of the day, that relentless energy may may feel like it's it's natural. But for a lot of entrepreneurs, myself included,
It's not so natural. Like a lot of times you got to like pump yourself up and be in the, get your head in the game. As I say to my kids, as they're playing a sport, but it's really that mindset of, you know, taking action and doing the things that an entrepreneur needs to do to make sure their business is, you know, surviving, but then ultimately thriving. And,
It's all in the mind. As Jack Daly said many times yesterday, it's the six inches between your ears. And that's what for me for the last 25 years, it keeps coming back to that. We can talk about processes and all this stuff all day long, but none of it matters compared to what's going through that entrepreneur's head. And I even think about that, Brent, with the book, the title Breakout Valuation. But for me, breakout was a way to really signal like this mindset of abundance.
And to have an entrepreneur to really think about, you know, abundance and how to be able to create and create value and why that is important. It's not about it's not it's actually the book is nothing about like getting a bigger check at an exit. It is about creating a valuable business because that can help with a lot of things, whether it's attracting employees, better customers, so on and so forth. And maybe someday at AltaMai is.
a bigger check at an exit. But there's a lot to that whole mindset of abundance that is really important, I think does tie it to that whole relentless energy because relentless energy doesn't come without the right mindset.
Brent Peterson (19:00.071)
Yeah, I think part of that mindset comes in self -reflection and always questioning yourself. Like I, again, I'll just speak from my own experience. I have to always question myself and always keep learning and moving forward. Or you get stuck in some past and talk a little bit about how your interpretation of that is and how that affects or how that applies to your business and your life.
Patrick Donohue (19:06.318)
Yeah.
Patrick Donohue (19:19.406)
Yes sir.
Patrick Donohue (19:31.15)
Well, for me, it has been absolutely transformational. When I joined EO, everybody talked about you have to find ways to work on your business and not in your business. And that's what was going through my mind as you were sharing your thoughts and your question. And I think it's really important for entrepreneurs and I think everybody, but everybody has got to take a step back and really reflect. And I think...
20 years ago for me that just sounded very foo foo -y and it's like something that sounded like a luxury and like yeah maybe on a Saturday afternoon I'll you know stare at the lake and think about my business for an hour and it's like no like you need to get away for a week if not two weeks and like go on a retreat and really think about meditate and strategize on what you're working on and Jack talked a lot about that and I've heard I was listening to a podcast the other day about
how important it was Robin Sharma did the power series for EO and Robin Sharma was talking about how sleep is critical, but it's really important to like, you know, take the time to reflect and to meditate on everything you're doing because when you're in action, you got to go into action hard and you got to have that energy reserved as an entrepreneur, but you can't do that, you know, for 40 hours a week or let alone a hundred hours a week. Like that's all just.
You know, that's pure myth and made up. Like somebody doesn't can't go hard 100 hours a week. They just can't. They can definitely like meditate and, you know, be reserving energy and go hard at certain period. But you can't go hard all the time because you're literally your health is going to, you know, you're going to you're going to implode doing that. And so, yeah, I love how you're where you're going with all this. But it's so important for entrepreneurs to.
reflect and to think about what they're doing, where they're going. Because for me, that's where it's really unlocked value for all my work with Hill Capital and EO and the things that I'm touching is when I've been able to take a deep breath and to take time away to, and that's why I love skiing and stuff like that. Cause it's the time to refill the batteries. So.
Brent Peterson (21:44.711)
I'll share a moment of transparency and be vulnerable, but as just gone through my moderator training, we're not supposed to use the word vulnerable anymore, we use transparency. Oftentimes, I bring a notebook to church, a little Field Notes notebook, and during the sermon, not that I'm zoning out, but my mind always is connecting.
Patrick Donohue (21:57.998)
I like it.
Brent Peterson (22:14.535)
let's say spiritual things with your business. And I believe that there's a connection in our lives. Our lives are not, we're not buckets that are not connected. We are whole people that everything moves from one part to the other, your personal, your business, it's all interconnected. And whoever says that you can turn off something is not completely true. Anyways, I'll take notes during sermons and I'll actually think about business top. This horribly
Patrick Donohue (22:18.318)
Yes.
Patrick Donohue (22:37.806)
Yes, I agree.
Brent Peterson (22:43.911)
embarrassing, but I will do that. And it is a time when you're disconnected from all your electronics, that it's unique in the time where somebody speaking to you about a topic and you're not going to do that. But it's, it's the only reason I bring it up. It's an illustration of reflection and any time that you're away that you can think about the way your life is.
And for me anyways, I think about how can I apply that in my business life, my personal life, and it's a good reflection point.
Patrick Donohue (23:20.654)
I completely agree very much so. And I think those for me, it's what what came to mind for me is that my best insights and inspirations and things that have been helpful for my business are was never really been in the office. It's when I've been out for a walk a lot of times or I'm downhill skiing or other things. And all of a sudden, like it will open up a whole new
series of thoughts on how to connect the dots on things. And that's really, really powerful. And I just reread the book Mastery by Robert Green. And he actually talks a lot about that. That why multidisciplinary approach and using other, you know, other things to be able to think through the what you're working on today is very, very important. So I love it, Brent. I'm
I'm there with you. I can't sit too still in a sermon anyways these days. So it's a...
Brent Peterson (24:23.719)
Ha ha ha ha.
I want to shift gears a little bit because you alluded to a new book you're looking at and you talked about Jack Daly a little bit. Tell us a little bit about what you're working on next.
Patrick Donohue (24:32.686)
Yes.
Patrick Donohue (24:40.494)
So in the book Breakout Valuation, I talk about the nine components to being able to understand and track progress around creating value. And one of them's around vision. And then I talk about in the book 19 real drivers of value. And the first one is magnetic vision. And that is the one that entrepreneurs have leaned into the most. And so I'm going to, I've started the process of writing the next book to,
discuss that and to go into that more detail because the nice thing is, is magnetic vision can apply to every business. All 19 of the real drivers of value in the book that I talk about, it applies to most, but not all. But magnetic vision definitely is something that is important for all entrepreneurs. And the idea is that, is to have a vision of where you're going.
But the key is that you have to be able to articulate as an entrepreneur and to bring people to your vision. And so that's what makes it attractive, thus magnetic. And being able to build that community around you as an entrepreneur and as your business to support you in where you're going and growing. And I've been doing that with my own business, Hill Capital Corporation.
we're doing it to a degree in EO. But as I've learned and thought about this over the last several years, I'm wanting to really lean into this because there are some other books around vision. People talk about why it's important, but I'm going to really lean in and give a number of case studies around why a magnetic vision can help truly build value for a business, no matter who you are or where you're at in your entrepreneurial journey.
Brent Peterson (26:26.887)
Yeah, I think yesterday Jack talked a lot about how there has to be a common vision with all your team and especially this playbook idea, which apparently most people don't have. I think he said 4 % of the companies actually have a playbook. Is that the right stat that I got?
Patrick Donohue (26:37.102)
Jesus.
Patrick Donohue (26:41.806)
Yeah, so I don't feel bad.
Patrick Donohue (26:48.398)
Yeah, he had said that on the sales playbook. So.
Brent Peterson (26:50.247)
Yeah, and I would say that most companies don't have a playbook at all, regardless of that. Or one thing you mentioned, and I'm certainly guilty of this, is that you have your HR department write your employee manual.
Patrick Donohue (26:55.406)
Yeah.
Patrick Donohue (27:05.998)
And it sits on a shelf and nobody looks on it unless there's a crisis. So yeah.
Brent Peterson (27:11.047)
Yeah, so talk a little bit about how that affects you and what you're doing.
Patrick Donohue (27:17.666)
The playbook or what effects?
Brent Peterson (27:19.143)
Yeah, I mean, just having that the vision is great and then getting in it. But how do you communicate that your team playbooks one way, you know, constant meetings or what is it? How do you get that vision to you? You talked about getting it to the people you're selling to. But I think more importantly, getting it to your team, right?
Patrick Donohue (27:25.422)
Yeah.
Patrick Donohue (27:29.55)
Patrick Donohue (27:39.95)
Well, what I think about is the word you just talked about with transparency. And what I've been doing personally, and what I'm going to talk about more about in the book is to just be very open and transparent wherever possible, is to be sharing that vision within the natural course of conversation and communications wherever they may be. I think.
what the challenges that a lot of entrepreneurs face is that they feel this need to like hold on to things really tightly. And I think it gets really dangerous when they say, well, I'm going to only share this vision with my shareholders or key employees or whatever the case may be. And that's where it's not magnetic in the true sense of the word, because to truly be magnetic is to really share it out there. A magnet, you can't.
really cut off a part of a magnet. It's attracting from all angles. And I think that's really important for an entrepreneur to kind of think through that concept is to share that magnetic vision wherever possible, because you never know what is going to come to you or to the business that can help propel it forward. And for me, what has always been fascinating is that throughout my 30 year career so far,
The people I always thought could be super helpful were not the people that actually move the needle. It's the people that came out of left field because I was sharing something. All of a sudden they said, let me introduce you to so -and -so. And all of a sudden it was a new client or a new deal or whatever the case may be. And it just opened up a whole new world. And so I have really leaned into the idea of transparency.
and to get a lot more comfortable sharing things that I would never have dreamed of sharing 20 years ago and being able to share where I want to go with Hill Capital and what I want to do and how I'm going to get there because you never know where somebody is going to hear that and see that and be able to be helpful to making that a reality. And so that's how I think about articulating it is.
Patrick Donohue (29:59.918)
is I think people need to think about the default being share it far and wide as much as possible and don't hold it close because that's where I think people go wrong. They think that they've been communicating it and they really haven't.
Brent Peterson (30:14.023)
Yeah, that's my, you know, funny that my wife says that all the time. Right. Yeah, exactly.
Patrick Donohue (30:20.366)
Yeah, exactly right. A lot of personal lessons here too. It is the same thing, but that I do, transparency helps with a lot of things. So.
Brent Peterson (30:28.551)
One of the things that he brought up yesterday that resonated with me was pity party and how oftentimes we as entrepreneurs get caught up in our own pity when something happens. And the next part to that was figure it out. And he used a lot of F words and a lot of other expletives that that added to or enhanced on that, get just figure it out.
Patrick Donohue (30:46.35)
Yeah.
Patrick Donohue (30:57.806)
Yes.
Brent Peterson (30:58.727)
I don't want to dwell on pity party, but that figure it out part, I think is one of the most important lessons that anybody can take away from any entrepreneurial journey and learning and moving forward always. Talk about how the importance of not only just always figuring it out, but being, I'll use the word relentless again, in finding that new path and.
Patrick Donohue (31:08.142)
Yeah.
Brent Peterson (31:28.143)
not for the sake of growing, but growing to be relevant in this time.
Patrick Donohue (31:36.27)
Yeah, very much so. And, you know, we all have bad things happen to us. And that's why I've come to love Jack because, you know, you think the guy is superhuman, then all of a sudden he peppers in that, you know, just got over cancer and he's 75 years old and his wife passed away. And it's like, you know, like every human being goes through a lot of challenges. And so, and that's very true with business. You know, when we talk with our portfolio companies, we say, you know, when there's an issue,
boom, boom, boom, not if there's an issue. Like I guarantee you every business, no matter how sparkly they look on the front end, they have major issues. And we have one happening with us at Hill Capital right now. We have a portfolio company that is in a very distressed situation and being transparent and going to all of our stakeholders and our ambassadors and pulling the community around like, Hey, how can we think about this? And so on and so forth. And I share that.
I share that with you because for me, you know, it's that whole like turn lemons into lemonade, you know, like, how do you find a silver lining? You could throw a lot of different words and analogies at this, but at the end of the day, you know, you get that gut punch and you got a little pity party and it's like, my gosh, and I just want to like give up and why do I do this? And I should just go get a real job or whatever the case may be, or the things that cycle through entrepreneurs heads when times get tough. But
What I have come to find and what I'm leaning into Brent is that growth only happens through discomfort. You cannot by definition, you cannot have growth without massive discomfort. That's the only time you grow. And so now when I have uncomfortable situations like this company that's distressed, it's like, what can I build and to learn from? Where can there be things that we can do? So for us, for Hill Capital, it's like,
Well, we learned that this process would be better. We could update things over here and da da da. And we could let our other portfolio companies know about how to think about these things. So this doesn't happen to them. And as I start to pull out all these things that we've learned, I'm like, that's where the value is. Right. That's the value, because, you know, in 30 years from now, Hill Capital, this is going to be the story, the bit of the mythology of like,
Patrick Donohue (33:59.886)
When we had these issues and stuff happened to companies, we made these decisions to learn from it and to build and grow. And now we've got our, you know, our IP or our, our, our internal processes and how to think about things as the, really the foundational to what allows us to be very successful long -term. So that's what I've, I've been using as mindset to like,
keep myself in the game and pump myself up is like when I face tough times like, okay, somewhere here, this is actually going to be good news. It doesn't feel that way. It feels impossible today, but I got to take this as like, this is going to be someday. I'm gonna look back and say, this is awesome because this is what led us to do this to this to this. And it was the cause of our growth long -term. So, it's, it's a, it's a big topic and I'm
grateful that you bring that up, Brent, because it's important for entrepreneurs to think about that they get out of that pity party, as Jack talked about.
Brent Peterson (35:01.095)
So before, let's just say the first step is that people should read your book, break out valuation. What is the first thing they should take as an action? And one thing I like about EOA is we leave with a lot of action items. What would be the first thing if, and we're not supposed to give advice, but in your experience, what would be a new business owner who's at the point of even a
Patrick Donohue (35:26.254)
Yeah.
Brent Peterson (35:30.983)
trying to get capital or what is it that first step they should take?
Patrick Donohue (35:39.47)
For me, the first step is really around, I think really plays into everything we just talked about, but that first step is really around mindset. And I talk about this in the book is to really think through and unpack like, how do they perceive things and is it real or is it an illusion? And what are the things that they need to know and to understand? And so it's really,
taking that step back and to come at things with the curiosity of a child. And that's what I talk about in the book is to bring out that inner four year old and ask a whole lot of questions because that's where entrepreneurs really get screwed. And I'm tired of seeing entrepreneurs get screwed out of their businesses or taken advantage of because they were afraid to ask the simple questions because they felt like they should know something like they feel like they should know something about like.
raising capital or what their business should be worth and all that type of stuff, because all these players that provide capital, buy businesses, they love to throw around acronyms and big words, and they love to scare business owners into just like handing over their very valuable business for peanuts. And so it's really important for entrepreneurs to take a step back and to unleash that inner four year old, ask simple questions.
learn and to really reflect pack, like do they really know something or is an illusion? You know, do they have an opinion around equity or debt because of what they had read somewhere or heard from someone? They really know that it's really factual. And so that's where I would, I would encourage people to kind of start with that reflection as, as step one is to go into it with that open mindset.
Brent Peterson (37:28.007)
Yeah, that's such a great lesson and it's so hard. I mean, I'll say from again, from my own experience that you, if you think you're an expert in some field, the hardest thing is to start asking questions about that field as though you're not an expert because you are, you're perceived to the other person as not being smart enough. And I'll close this out with my final little experience share in the subject.
Patrick Donohue (37:53.518)
Yeah.
Brent Peterson (37:53.703)
About 15 years ago, I wanted to be a trainer for this software company called Magento. And I thought that I knew everything. And I got on this call with this guy from Ukraine who was like the smartest guy in the world. And he says, how much the first question, how much do you know about Magento? And I said, I think I know about 99%. And he started laughing. And then he went in to ask me five questions of which I knew nothing about. And I said, I, yeah. And I said,
Patrick Donohue (38:20.174)
Wow. There's a dose of humble pudding.
Brent Peterson (38:23.655)
Geez, I am so embarrassed that you have humbled me to the lowest level that I could possibly be. And it really invigorated me to step up my game. Because there is that imposter syndrome, but there's also the imposter syndrome where you think you know something more, right?
Patrick Donohue (38:46.382)
Well, and that's where I mean, Robert Green touched upon this in that book, Mastery, but it's like, you know, the real masters get to a point where they just acknowledge they never know. And they're constantly curious and always building and learning because that's why I've kind of gotten away from the whole phrase expert because I think it's super dangerous because no one can be an expert, especially in today's world where there's so much information. But I'm the same way, Brent, like for like for finance and so forth. Like I am definitely beyond the deal in the.
top 1%. Like I this been my whole life, I get it. I have the Chartered Financial Analyst designation, so on and so forth. But there's always something new, different, better information, you can never feel like quite an expert. And for me, the humble pudding was in EO when I went to money day for for accelerator 12 years ago. And I went in there with an air of attitude of like, well, I know all this stuff, I'll just sit in the back and get some real work done. And well,
Greg Crabtree talks and Greg Greg's up there talking about, you know, his work and what he's doing and so forth. And I'm like, boy. Like and it just hit me that that's the day when I realized I hate accounting and I love finance. And I thought I knew accounting and all that type of stuff. And I'm like, my gosh, I'm the Cobbler's kid. Like and so that for me, that's why I have deep respect for you and just.
It's been a great personal journey as well. So yeah, never stop learning.
Brent Peterson (40:18.279)
Yeah, so never stop learning. We're going to have to leave it there. We've gone through our 15 minutes of time here. Patrick, as we close out, I give everybody a chance to do a shameless plug. What would you like to plug today?
Patrick Donohue (40:23.886)
Yeah.
Patrick Donohue (40:32.686)
Well, I don't have any big shameless plug. I will just say that I am open to connecting with everyone. If anybody wants to have a conversation around capital or entrepreneurship, easily accessible, you can find me on LinkedIn. Just shoot me a note that you heard or learn to reach out to me from this podcast. cause I get a lot of requests, but otherwise it's, Patrick, my full first name, Patrick at hill capital corp .com.
Patrick at HillCapitolCorp .com and I'm happy to connect and collaborate or help you find capital or whatever you need as an entrepreneur in their journey. So I'm very grateful for the time here, Brent, and happy to help wherever I can.
Brent Peterson (41:14.855)
Can I do a one for you? Because I know you do the 1 million cups and that was, you invited me to one of those events and it was very inspirational.
Patrick Donohue (41:18.542)
Sure. Hello. Yes. Yes, well, 1 million cups is every Wednesday. Actually, I'm drinking on my 1 million cups cup. And so every Wednesday, 9 a we meet and eat in Prairie, Minnesota, but there's 200 chapters throughout the United States and it's free, open to the public. We serve coffee and it's just a volunteer led thing where we have one or two entrepreneurs come and.
share their story. So I just help, you know, found the local group here, but I love 1Million Cups. It's just a very safe place and there's no RSVPs, there's no membership list, there's no dues. It's just, you know, get together and hear from Manant Purnure and have a cup of coffee. So, yep. Yes.
Brent Peterson (42:04.999)
Perfect, a great ending note. Patrick Donahue, it's been such a pleasure. Thank you so much for being here.
Patrick Donohue (42:13.294)
Thank you, Brad. Thank you for all you do for entrepreneurs.