Kimmy Paluch is managing partner of Beta Boom, a seed-stage venture firm based in Salt Lake City. Beta Boom backs founders who bring greater diversity to the venture-backed economy. For Beta Boom, diversity means gender, racial, and geographic diversity—but it also includes diversity of perspective, life experience, and access to networks. Part of what makes Beta Boom different, Kimmy explains, is that her team thinks of the firm as a “startup academy”: an organization that provides sustained coaching from expert operators in addition to venture funding and introductions.
We spoke with Kimmy to learn more about what makes Beta Boom tick.
Nigeria: You started Beta Boom in Salt Lake City. It’s not a city people often associate with venture capital. Could you tell us more about what the Salt Lake City venture and startup scene looks like?
Kimmy: Salt Lake City has been a rising tech hub for a long time. And if you look at the performance of this market relative to many of the other rising tech hubs in the U.S., it’s really outperforming. The state is seeing a huge amount of productivity, and it continues to rank as one of the top states for business.
Now, I think people are paying more attention to Salt Lake because we’re beginning to see some major exits. The big one that really put us on the map was that $8 billion acquisition of Qualtrics. It propelled what was already happening here.
Nigeria: What advantages and challenges come with being an emerging manager in Salt Lake City?
Kimmy: If you look at the venture space, it’s a saturated market. There are 3000-plus funds and accelerators out there. Even emerging managers—there’s been a ton in recent years. So the biggest thing is being differentiated and doing something different. I think that’s required regardless of whether you’re in a major tech hub, or a rising one like Salt Lake City.
Nigeria: What’s behind the name of your firm, Beta Boom?
Kimmy: My first firm was actually renamed Boom Factor. What I was doing through that firm was embedding teams into startups and corporations for new product development and innovation. I really loved the concept of a “boom” because it was how we thought about taking something from inception and really making it big—blowing it up. Beta Boom came to be because when I thought of starting a fund, I decided to focus on the really early stages. In the tech world you have alpha, beta, and then a full release. Then you make that seed flourish.
Nigeria: We’ve seen Beta Boom described as a “startup academy,” and your firm’s website says that you “work alongside founders every day to help jumpstart their startup’s growth, and help them build a team that will ensure long-term success.” Could you describe how Beta Boom does this?
Kimmy: This goes back to differentiation. When I was starting up and specifically focusing on founders outside of major tech hubs, there were two things that I always heard them say that they needed. They needed access to capital—that’s always the first thing. There’s not enough funding flowing into many markets. The second thing they needed was access to operational experts—expertise that can help them grow their business and overcome challenges they face at the early stages. For us, that was a big insight. We wanted to be a bridge to capital, but also a bridge to expertise. That’s what we’ve been doing for our entire careers: embedding ourselves into companies and helping them.
There’s a reason that we use the word academy: When you think about sports academies, they find exceptional talent. But just being talented isn’t enough. What you need is a team around you, people who can help you achieve your potential and maximize how you perform on the court or the field. At Beta Boom, we wanted to find exceptional founders who are really, really good in a certain domain—founders with great executional abilities who can do so much with so little—and then surround them with a team of coaches that can help them execute. The way that we do that is by giving them coaches in every single realm. We have a product coach, a fundraising coach, a marketing coach, a sales coach—we’re looking at surrounding them holistically and helping them to grow their businesses.
The second level of support is a bench of experts that we can pull in, because not every founder needs everything, or needs everything at the same time. Someone might need a designer or an engineer or an SEO expert, and we can pull from our bench to help our founders learn alongside them and execute at a better level.
Nigeria: How do you source those experts?
Kimmy: Great question. We’re taking a page out of the agency model. At an agency, you bring people in as you need them—so most of our experts are consultants. Some are embedded in our team. A lot of the coaches are actually partners who are overseeing the holistic trajectory of our portfolio companies. We pull on resources as we need them, and they’re fully vetted because I’ve either worked with them before or they’re coming to us through a strong referral. In the future, this will be the platform that we build. There are certain things that founders need all the time, so some of this will continue to become more embedded within our team.
Nigeria: Recently one of our podcast guests, Anna Raptis of Amplifica Capital, told us that when it comes to supporting women entrepreneurs, “We need fewer workshops, and more checks.” You seem to have a different view: You’ve said “writing the check is not enough” when it comes to making progress toward eliminating the demographic disparities that persist in venture capital.
Kimmy: We don’t write a check and hope. We write a check and surround founders with resources that can help increase the chances of their success. That’s what I mean when I say “Don’t just write the check—it’s not enough.” But I think the point about funding is true, as well: Founders of color and female founders are often over-mentored, and don’t even get the check at all.
We looked at research when we were formulating our model; the research showed there was a bigger correlation between social and human capital and the success of founders than just capital. The best combination has to include both a check and the specific work that founders need. Female founders, founders of color, and founders in marginalized geographies don’t have as much access. You can’t say that they’re going to be equally able to have success without additional social and human capital, because they continue to face a lot of hurdles and gaps as their trajectory continues. So for me, it’s about writing the check and closing the gaps.
Nigeria: What strategies have you implemented to create a portfolio that focuses both on impact and returns?
Kimmy: The best impact businesses are those that align their business model, or how they make money, with how they create impact. I think there’s sometimes a misconception that you can’t have both. What I’m looking at is how we can direct dollars towards businesses that both do good and make profit—and that happens when you have the perfect alignment between those two things.
The example I’ll give is one of our top-performing companies, Fiveable. It’s an ed-tech platform based out of Milwaukee and led by a former Teach For America teacher and an incredible community builder. The platform was first meant to enable access to Advanced Placement (AP) education. The founders believe that when you open up access that goes beyond zip code, you’re creating pathways to wealth generation and greater education, which lead to greater economic outcomes. They create that impact while also making money. That’s the perfect kind of approach.
If you look across the U.S. and the world, there are massive opportunities that are being missed. There’s a huge amount of economic and impact opportunities. One of the two biggest ones is digital health, or health in general. If you look at our morbidity rates for maternity in America, it affects people of color differently. It’s really abysmal and shocking. If there’s a business solving that, and it’s making money by solving that problem, why shouldn’t it get venture capital? So digital health is one of the big opportunities. Fintech is another—because we know that financial inclusion and wealth generation have locked out entire communities across the U.S. and the world.
Nigeria: How do you measure impact at Beta Boom?
Kimmy: If there’s a business that has a double bottom line—let’s say that it’s a health-related business and it’s trying to affect patient outcomes for marginalized groups—I don’t want to create a burden for our founders to have to track that to a scientific level. But I do want to know that they’re tracking on some level. How many businesses or hospitals have they encountered? How many of those patients have been affected by what they’ve created as their solution? How many students got access to education that didn’t have it before? We track those kinds of things.
On a diversity level, we track the geographies that we’re investing in, and founders who are coming from marginalized groups. We can always measure something. I don’t think it needs to be overly sophisticated.
Nigeria: What would you say is the most important part of raising a fund?
Kimmy: The networks are really important. They just are. They’re important for a startup, but even harder for fund managers.
Access to groups of investors is usually limited to your networks. So for a fund to build itself, especially an early fund, a lot of times we’re targeting high net-worth individuals or angels—people who have accreditation status according to the SEC—or family offices and some institutions. Usually with institutions, their check sizes are too big. To build a $20 million fund like we’re building, it requires access to huge networks that can create this big pool of capital. It’s a big hurdle because, just like us, an investor may want to know a founder for a while. Our limited partners who are investing in funds also want to know their managers for a while. So the earlier that you can start those relationships, the better off that you are.
Nigeria: What are you most focused on now that the fund has been launched?
Kimmy: I’m focused on making my founders successful and doing everything that we can to surround them with the support that they need.
I will say there’s one specific area where we started looking, and that’s wellness. Other funds have started looking at this, too—and I hope the trend continues beyond the pandemic. Being a founder is one of the hardest things you can do. It’s taxing, and not just from a professional standpoint. From a personal standpoint, it can be lonely. And there’s a lot of wellness issues that I think that we’ve ignored for a long time and haven’t been talking about. That’s something I think about a lot as a coach: Yes, we want to push and we want to continue to grow, but we also have to make sure it’s not despite the founders’ health or their well-being, regardless of the outcome of the startup.
Nigeria: Being an emerging fund manager, you’re a founder and an investor. How are you taking care of yourself?
Kimmy: I take walks every day. It was something that I started doing before I started in venture. I used to work all the time and wouldn’t even get up to take walks. I’ve also done a lot more on time management—really thinking about when I’m most productive for different tasks, and then blocking time for that. That’s something I talk to founders about—because your to-do list is always going to grow. At the end of the day, there are going to be things you didn’t get to, and it’s important to create that balance and be forgiving to yourself and not expect too much—or at least not more than should be expected—because I think we’re all hard on ourselves. And then the last thing is something I only started this year: I meditate every morning. It’s usually just 15 minutes I give myself, and it really allows me to lower my stress levels as I start the day.
Nigeria: Do you have any advice for emerging fund managers for how to establish a strong foundation for success?
Kimmy: I have conversations a lot with other emerging managers. And I think that many of the things that founders need, emerging managers need, too: We need community. We need to be learning from each other, from people that have gone before us and people that are going through it now. And we need extreme hustle, persistence, and a “never say die” attitude. I think those are really, really critical. Don’t do this alone.
Tactically, I think there are a lot of things to be done. The thing I mentioned about relationships is absolutely true: “No” now doesn’t mean “no” forever. So don’t forget to reach out to people you’ve had contact with all along the way.
One thing we didn’t really talk about, but that I think is important, is really having a unique position, both in where it is that you’re investing—whether it’s vertical focus or an impact focus or whatever it is—and the value that you bring uniquely to your founders. It needs to be ingrained in your culture and ingrained from the beginning—not just to be distinct in the market, but to actually be able to achieve something great.