May 21, 2025 · 31m · innovators-investors
Matt Smith from Kickstart on Early-Stage Investing in the Mountain States
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In this episode of the Innovators and Investors Podcast, host Christian Marquez interviews Matt Smith, Principal at Kickstart, about venture capital dynamics in the Mountain West corridor. Smith shares insights on seed-stage valuations, founder evaluation criteria, AI-driven market disruption, and Kickstart's regional ecosystem initiatives.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Kristian as informed peer 2.3 Guest teaching 2.7 Guest disagreement 0.2 Kristian pushing back 0.0
speaking balance: gold is Kristian, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 8:39 Reframing early-stage pricing mechanics
Smith politely dismisses the host's focus on comparative valuation multiples, explaining that early-stage VC deals are driven purely by ownership percentage targets.
Hardest push from Kristian ▶ 11:33 Probing venture winter and market reboundMarquez challenges the current macro narrative by bringing up Fed interest rate increases and demanding to know if green shoots are genuinely materializing.
Biggest teaching moment ▶ 8:39 Ownership algebra over revenue multiplesSmith educates the host on early-stage seed mechanics, detailing why assigning revenue multiples to early pilot revenues is punitive and mathematically irrelevant compared to securing 10-15% equity.
Kristian holds their own ▶ 11:33 Macroeconomic framing of interest rates and venture riskMarquez demonstrates financial expertise by articulating the impact of monetary policy tightening on venture risk reassessment and market cycles.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Kristian as informed peer | Guest teaching | Guest disagreement | Kristian pushing back | Why |
|---|---|---|---|---|---|---|
| Kickstart's Origin and Mountain States Investment Thesis | 2 | 2 | 0 | 0 | Host Kristian Marquez asks an open-ended introductory question about Kickstart's investment thesis. Guest Matt Smith outlines the firm's history, geographical focus on the Mountain West corridor, check sizes, and target 'dragon' returns. | |
| Matt Smith's Career Journey and Founder Experience | 3 | 3 | 1 | 0 | Smith shares his career progression from Qualtrics to running a startup that failed, explaining how he learned to treat investors as customers. Marquez connects the insight to founder maturation and the sheer number of active venture funds. | |
| Valuation Multiples, Ownership Targets, and Regional Pricing | 2 | 4 | 1 | 0 | Marquez asks about regional valuation multiples compared to the coasts, but Smith clarifies that early-stage investing focuses on ownership algebra (10-15%) rather than revenue multiples. Smith explains where multiples actually come into play during later rounds and exits. | |
| Venture Capital Market Outlook and Emerging Green Shoots | 4 | 2 | 0 | 0 | Marquez frames the macroeconomic context of Fed rate hikes and the venture downturn, asking about emerging market green shoots. Smith agrees and shares anecdotal evidence of M&A inbound calls resuming after an 18-month hiatus. | |
| The Impact of AI on Startup Disruption Cycles | 2 | 3 | 0 | 0 | Marquez asks how AI acts as a tailwind and alters investment criteria. Smith explains that AI shortens competitive disruption cycles drastically, forcing investors to be more selective as competitor counts multiply rapidly. | |
| Pacing of Diligence Cycles and Active Capital Deployment | 3 | 3 | 0 | 0 | Marquez asks whether pre-seed deals are happening later or if funds are being cautious. Smith notes that diligence cycles are returning to a normalized 2-4 month cadence rather than 2021's frantic 14-day window, while Marquez notes this benefits founder capital discipline. | |
| Key Founder Evaluation Criteria: Mastery and Risk Awareness | 2 | 4 | 0 | 0 | Marquez inquires about qualitative criteria beyond product and revenue. Smith articulates looking for founders who can teach him their domain in 30 minutes and who proactively highlight the key downside risks keeping them up at night. | |
| Post-Investment Support: Matchmaking and Key Talent Sourcing | 1 | 2 | 0 | 0 | Marquez asks about Kickstart's portfolio support philosophy. Smith explains their two primary value-adds: connecting founders to experienced peers with scar tissue and helping source early hires numbers 5 through 10. | |
| In-Office Collaboration versus Remote Work Culture | 2 | 1 | 0 | 0 | Marquez asks about remote versus in-office work, and both agree on the necessity of in-person collaboration for early startups. Marquez then invites Smith to promote Kickstart's '14 Founders' initiative in Colorado. |
Statements from this episode (16)
Matt Smith: Mountain West corridor founders are more capital-efficient and scrappy
“Ever since 2008, it's kind of been this thesis that there's a more capital efficient, scrappy, kind of differently built entrepreneur between Phoenix and Bozeman, Salt Lake and Denver, kind of in that corridor.”
Smith: Founders must treat venture investors as customers buying a vision
“One lesson, I guess I would say I took away from raising capital as an entrepreneur. Is that investors were also my customer. I was selling them a vision.”
Kickstart Targets 10% to 15% Ownership With $500K to $3.5M Checks
“We're looking to get, for our fund, we're looking to get, you know, somewhere from 10 to 15% ownership into a company. We're looking to invest somewhere from 500 K to three and a half million.”
Smith: Strong SaaS Acquisition Multiples Currently Range From 7x to 12x
“And so I would say like in general SAS, At an exit level, where we're seeing, you know, companies be acquired right now, I would say a good outcome is in the high single digits to, you know, call it like seven to 12, would be like, that's a good strong outcome…”
Smith: Kickstart Invested in $2M Revenue Startup at 11x-12x Multiple
“Recently we just did a student investment in a company that's Well, let's see, I'm just trying to think that math through. They are doing they're approaching two million in revenue and we invested on a like a low twenties post-money valuation. So call it like,…”
Smith: Venture capital market will return to equilibrium over next two years
“So I think it's coming back, but I do think that over the next Call it two years. I don't know if I have a crystal ball good enough to look at four years, but call it over the next two years. I see a return to kind of normal. I wouldn't say like back to like s…”
Kickstart portfolio company went from three to 15 competitors in seven months
“Like there's a company that I invested in last summer, and we knew it that it would be more of a land grab, kind of a, like a race type of opportunity for the company. I think they had two or three formidable competitors when we made the investment. We picked …”
Smith: AI Is Dramatically Accelerating Startup Innovation and Disruption Cycles
“Because AI is helping startups build so much quicker it's turning into like these cycles of innovation and disruption are so much faster.”
Smith: Rapid AI Disruption Is Forcing Kickstart to Be Very Selective
“It feels like AI is raising the bar on an early stage startup on what they can do, what they can accomplish. And so it's making us be very selective in the investments we make because in three months we might be disrupted by something new.”
Smith: Two to four months to raise a funding round is normal
“In 21, you know, you meet a company, you need to make a decision in the next 14 days, or you're not going to get a chance to invest in this company. And so, like, that's, I think that could be seen as discouraging to founders, but at the same time, like, takin…”
Kickstart made 13 new and nine follow-on investments in the past year
“In the last 12 months, we have done 13 investments, 13 new investments, and call it like Eight follow on investments, nine follow on investments, I guess, in portfolio companies.”
Smith: Domain parity with founders in 15 minutes is a red flag
“Always gives me a little bit of pause when I'm. 15 minutes into a conversation and I kind of out of questions and like, I feel like I've reached. Somewhat understanding of what the, you know, call it like 80% parity with the founder. I have, I'm a little bit l…”
Smith: Founders claiming everything is perfect make investors immediately nervous
“I'm way more interested in working a founder that has that kind of ethos versus one that's, hey, it's all up and to the right. Everything's perfect. You know, no need to ask too many questions because we've got this figured out. Like I'm always immediately ner…”
Smith: Helping with hires 5 through 10 is high-leverage for seed investors
“Hiring right at the precedency level. Most of the expertise that you need is not in the company yet. Once you read series A, series B, you probably have a fair amount of experience inside the company, and you have more networks inside the company to find, you …”
Matt Smith: Sub-20 Person Startups Need In-Person Office Work Most Days
“I think you got to be in the office at least three or four days a week. I think there's definitely a spot for hybrid. I think you're not going to get, like, top talent if you can't have the flexibility when, you know, kids have soccer practice or someone's sic…”