Investing into your Future with Christopher Mizer

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You want tech and tacos? Tacos and tech you know we got tacos and tech is on smash border green guacamole keeper countins counting beans Contador Quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping fire tortillas round jalapenos in these modern times a crappy beer and coffee My coding yoga posse fold the body origami we be surfing coronado eating tacos El gordo, the taco stand in pesto lucha libre and sombrero Got a shout out to cost angels by the ocean Watch the sunset la Hoya shores Entrepreneurs trying to get funded When San Diego Startup Week is popping in the summer Oceanside, the Tijuana esti be full of hustlers from couch surfing to penthouses right on the beach. Tech leaders who who believe stars are within reach we interview and founders who be shooting for the moon. SDTechOS with your host, Neil Bloom.

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Welcome to the Tacos and Tech podcast where we discover cutting edge San Diego technologies and the builders making it happen. I'm your host, Neil Blum, San Diego's tech ambassador, and together you're going to put a face to the name of today's tech leaders with our own blend of local lifestyle.

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And welcome back to the Tacos in Tech podcast. I'm your host, Neal Bloom, and I am joined virtually with Christopher Mizer, president and CEO of Viveris Capital. Christopher, thanks for being on.

Neil, thanks for having me. It's a pleasure.

Yeah, no, I'm really excited. We had a great intro phone call and now we get to elongate this conversation. So let's jump into it. Do you want to tell us quickly about what Viveris Capital is?

Sure. So Viveris Capital is a. It's kind of a merchant bank that I started about 20 years ago. I was an investment banker for about 10 years and then was able to kind of retire from having to make money in my mid-30s. Traveled around a whole bunch and went to different countries. And after about a year of playing a lot of golf and hanging out. I decided I like working more than I like goofing off. So then I started Viveris Capital. It was originally focused on kind of middle market buyouts. We've such expanded our focus and you know, we invest in early stage technology companies. We do fairmount in healthcare and life sciences. We do some real estate development primarily with our companies. And we also do some advisory work. We help companies that are looking to, to start capital or create shareholder value kind of navigate that whole process.

Wow, okay, so you're helping companies from end to end, potentially, or at least early on to kind of a whole horizon here that I'd love for us to dive into. We've got companies that we work with or people who are still kind of in ideation mode, who are working or who are later stage fully committed people who are just on the verge of an exit and then kind of recycling back in. So, you know, it'll be interesting to have this conversation. How did you get started in this space? Like, where did you grow up and what got you into the capital game?

So I actually grew up in a small town in Ohio halfway between Cleveland and Columbus and kind of a rural area. I say it's where the normal people live. It's the part of the world where people are hardworking, well educated, but there's not a lot of technology or opportunity there. And I went to college at Case Western in Cleveland and picked up four degrees there, two undergraduates and two master's degrees. And my father had Ms. Growing up, so he was pretty sick when I was away at college. When I graduated, I decided to stay closer to home. So I settled in Cleveland and spent about 10 years there as an investment banker, also going back and forth in New York. I had a place in New York and spent about a week a month there. You know, kind of got to do a lot of deals with companies of all different sizes. You know, big Fortune 500 companies were my clients as well as entrepreneurs and help them raise capital and buy and sell businesses and things like that. And I just realized that I had a real passion for, for supporting entrepreneurs. Entrepreneurs are my heroes and kind of helping take ideas and technologies and create things that really matter in the world. Things that can help people and create jobs and unlock people's kind of innate talents to do well and do good. After my father passed away about 15 years ago, I was driving through a Cleveland blizzard. You know, it was February and we had two and a half feet of snow on the ground and took me four hours to get Home and I said, you know, this is the last winter I'm spending in Ohio. So I started to look around where to move and thought about going internationally, looking at Singapore and Hong Kong and London, places like that, decided I didn't want to be an expat. I wanted to stay in the States and had already kind of did my stint in New York. So I decided to come to California and looked up and down the coast. And when I came to San Diego, it's obviously one of the hubs of healthcare life sciences in the country. It's also just an incredibly rewarding place to live. The quality of life, I think is the best in the world. And I've been to 45 countries and every state in the country and San Diego is a very special place, but both in terms of how we support each other and also kind of the access to technology that we have here to really take to market and create the next generation of businesses.

Did you, I mean, did you know that that piece of San Diego before coming here, or did you, once you got here, realize the lay of the land was way more biotech healthcare related and that's where you started to focus.

More back in Ohio, I think I mentioned I've got a master's degree in biology as well as a master's in an MBA in finance and accounting. And so I've always kind of straddled these worlds of business and biology. So, you know, I really liked that there was kind of a really rich ecosystem here with universities and biotech companies, big pharma and entrepreneurs. It seemed like the city's kind of missing some of that sophisticated access to capital, which I think we're still missing. So I thought maybe I could kind of help contribute that to the local economy. I spent a fair amount of time in the Bay Area, fair amount of time in la. Hadn't spent much time here in San Diego besides working on a few deals. I decided to come here and just, you know, get a place for a month and see how it went. The whole community was so welcoming and accessible. I just kind of fell in love with the place.

Yeah, it definitely seems unique to our DNA in San Diego, at least to be so give first, you know, you see it in some other communities too, and maybe Midwest is, you know, other areas where you see that. So it kind of has this Midwest on the coast kind of vibe, some aspects of it. So I'm glad you saw that. And it sounds like it obviously got you connected enough to do more deals locally. So tell us about some of the deals you've done in that regard and you have a wide breadth. I mean, you're doing real estate to private companies. Tell us about the structure of how that all works.

Well, you know, it's very opportunistic. So what I really focus on is how can we help create value? So that really depends on the situation. You know, some companies kind of need to have more systematic management, need to have kind of access to capital. You know, we have a whole toolbox of things that we kind of bring to a situation to try and help them grow. But if someone only wants capital and doesn't really need the other value adds, we're probably not a great fit. You know, there are probably other sources of capital that are maybe more passive. You know, we're pretty aggressive at really trying to arm entrepreneurs with the resources they need, which is money. But also it's a whole lot more than that to kind of bring everything together to create a unique, compelling business.

So are companies coming to you in times of trouble, like when they need help, you know, or usually coming to you, like when things are going really well and they need to offset, you know, their growth with some of your expertise?

There are a handful of major investing theses and we don't do turnarounds. You know, some guys are really good at turnarounds and, you know, restructuring businesses and things like that. We prefer to get involved with more growth oriented situations. So either companies that maxed out their current capitalization or their current kind of bandwidth as a team, or companies that are in transition. So we also get involved with companies where the owners, they're at a stage in life where they want to kind of ramp down their time commitment and take some chips off the table. And we kind of help facilitate that process by coming in with the next generation of management and capital and putting a plan in place where we can keep growing the business, let them participate in some of that growth, but also have a lot more certainty about their own liquidity.

Got it. Oh, interesting. Can you tell us maybe a story or two of that? Like an interesting story of, I don't know, a little more. Share more details of a recent company that you've done some work with?

Well, you know, we have a fair number of companies that we're involved with now that are still kind of in process. I'd rather tell you a story about a company that actually went all the way through the exit process because then I can talk about it a little more openly.

Sure.

We were involved in a medical products company that had kind of A core niche set of products. They had kind of had six major products, you know, maybe 100 SKUs total. And the owner had kind of invested his whole personal net worth into the business. He was to a point where he was a good sales guy, but didn't really have all the experience to grow a business at that next level. So we came in and we invested in the team. We put business systems in place, we invested in new product development. We got about 24 patents issued. We increased the product line to 6,000 SKUs. They were just selling in the US initially when we got involved, we took them to four other continents as well. You know, selling to about 40 countries and really kind of created a, you know, from a little leader to creating like a market share dominant company in their category. And then we were able to sell the business to our, our arch rival competitor who I think it was, if you can't beat them, join them kind of a thing for them at a very attractive price for us. And we were to do some things to contribute to their kind of footprint and their market position as well. So our investors, myself included, about seven times our investment in about four and a half years. And that's one of our hero stories. But that's kind of the game plan we like to use in general when we get involved.

That's really cool. Do you have some parameters maybe you can lay out, like what is a company? Do you like to see a company, A specific amount of sales or revenue and anything like that? What do you like to see from maybe a floor for a company?

Yeah, so we typically have two different modes of investing. When we invest in existing companies, we're always control investors. We typically own 60 or 80% of the equity. We create a lot of incentives for the management team and for the selling shareholder who we want to keep involved through some transition period. And those businesses typically have EBITDA of at least 2 million. We, you know, we kind of play in the 2 million to 20 million space. So it's companies that we think we can scale. Companies have kind of proven their, their product and some level of market kind of receptivity. But they still have a long Runway to grow and need that access to capital and management help and systems and relationships. All those things that I think we do pretty well. On the tech side, it's a totally different way of looking at things. So you know, in terms of technology, again, a lot of the things that we're doing are healthcare and life sciences. We're really looking at how we can partner with some of the bigger companies in the industry, either through kind of a corporate venture program or through a strategic relationship. And then how we can kind of leverage their market, access their resources, their regulatory expertise and our capital and our kind of business blocking and tackling expertise to kind of de risk the investment and to ultimately probably partner with them on an exit down the road.

Okay, what's a time frame that, like, let's say you see you meet a company within your range. What does it typically take over a period to do some due diligence and decide, yes, something we're going to do together and then complete the transaction?

You know, pre Covid, I would say we were pretty fast. I'm a firm believer that a slow maybe is death for most of these small businesses, and a fast no is much better. So we try to really kind of respect that kind of what the entrepreneur needs and, you know, get to a decision pretty quickly. We can do that usually in a couple of weeks in terms of kind of a path to go forward, and then we kind of negotiate the deal points and kind of put a structure together that aligns our incentives. Takes probably another month or two to do due diligence and legal documents, and then, you know, we're, you know, off to the races. Typically, you know, 90 to 220 days after that decision. That green light.

Okay.

I would say post Covid, everything's taking longer when you can't go out and visit companies and due diligence is remote. It's just a lot harder, and that drags things out.

Yeah. What are some other trends you're seeing during COVID Are people ready to do these kinds of transactions more readily now, or a certain class of business who are affected by Covid saying, maybe I should take a step back a little bit or what are you seeing?

I think we're seeing a barbell. We're seeing tremendous uncertainty. Companies that are fighting for their life and they're running lean and mean. You know, their development plans have been delayed, and their access to getting things done quickly with their teams are challenging. And I don't think we're out of the woods there yet. I think, you know, after the election, we'll have some more certainty about what the future looks like. And hopefully, as we emerge from this kind of COVID quarantine, we'll have some more access to actually go in there and support those companies. I think the jury's talked about what's going to happen with kind of companies that are really struggling on the other end. You know, we're seeing A lot of opportunities just kind of happen overnight. So you know, in the healthcare space kind of the, the whole Covid development therapeutics, PPE is dominating a lot of the other themes that were going on maybe a year ago. So you know, we have a couple clinical programs for, for Covid Therapeutics. We have a big initiative to commercialize test kits for Covid on a global basis. And those, those could be, you know, short term businesses or I think it could be the new normal. I think we're going to be experiencing kind of preparation for these kinds of pandemics. That's the kind of new normal. I mean things are transmissible around the globe much faster now. You know, Covid fortunately hasn't been as bad as they thought initially, but the next one could be a lot worse. And I think people want to have that infrastructure in place.

Yeah. On the biotech side, what's interesting is to see the amount of grants and contracts coming out. Right. To help support and fight on the front lines, potentially even pre product. Right. People are getting grants and government funding to go and go start working on something like ppe. And in the early days we saw a lot of like medical device equipment. Right. Being spun up and contracts driven like that. You know one, it's great because it's non dilutive funding in a sense that's getting coming out, but it's kind of pre sales. Is that still something you'd still come in and join in on even though there isn't kind of a product maybe on some of the biotech pieces?

Well, you know, we like to come in and get involved with. There's business risk but not kind of scientific risk. So if there's like a proof of concept or prototype or there's something that has some kind of compelling data attached to it, then I think we can kind of commit and help scale that. If we're doing kind of basic research that's really more of a function for grants and for universities still.

Yeah, that makes sense. Take me through a little bit about. I mean obviously the stuff we're seeing, the barbell is not sanded, it's across the world. Right. But San Diego happens to be on the good side in terms of benefiting from biotech and, and the tech acceleration. Right. What are you seeing locally that you're, you're getting excited and jumping in on?

Well, you know, I think and in most dimensions San Diego is defying gravity. I mean if you go north in California or you go east to the rest of the country, people are struggling a lot more than we are here, fortunately. And I think, you know, there are probably a lot of reasons for that. But, you know, I think that San Diego is going to continue to be a really good place to live and do business. We're seeing that in these really challenging times. You know, you're right about the government's kind of unlocking the checkbook for anything that's related to Covid. And they have a handful of initiatives. You know, they also are doing some things with non opioid pain and things like that where they're just increasing the level of funding by orders of magnitude. And fortunately, we have a lot of resources here that can kind of help with that initiative and benefit from it. We're kind of going through kind of a renaissance in the biotech community where there's been all these technologies that have been in development in the lab for maybe a generation. You know, things like CAR T. And we're seeing, you know, oncology applications. We're seeing applications of crispr. CRISPR is a newer technology, obviously, but you know, we're seeing things that are kind of moving out of the kind of the concept research phase and into the. Into patients finally.

Yeah, CRISPR just won the Nobel prize this year. Right. And so it's actually been in development for quite a while. I don't know if you saw that video of the two guys who won it. I'll put it in the show notes. But there's a fantastic video. The two guys who won the Nobel prize for crispr, they're actually neighbors. And the Nobel prize committee couldn't get a hold of one guy. So they said, hey, can you go next door and knock on his door and get him to answer his phone? And so he's talking through his ring video camera saying, you won the Nobel prize, answer your phone. It's amazing.

Oh, that's great. I can't wait to see it.

Yeah, it's fantastic. So it's pretty cool to see their technology now obviously having application processes moving forward. And so it sounds like you guys are capitalizing on, on that too. Take us forward from here. Like, I know there's uncertainty, but what are you kind of excited about to dive in and invest in over the next year?

Well, you know, we're big believers in cell based therapies. That's one of the things where we've seen kind of that generation of research really starting to play out with all kinds of applications. So, you know, I mentioned my father passed away from Ms. We have an Ms. Program we're involved with that's really exciting. We have some other things that are looking at neurodegenerative conditions. You know, Ms. Is one, obviously, but also looking at psychiatric conditions. That's very exciting. And I think it's just going to be. It's going to be a sea change in terms of how we fundamentally change treatment of diseases by kind of the underlying biology versus treating the symptoms.

Something I want to make sure our audience understands is that for a transaction with you, and really more than a transaction, it sounds like when you come in, this is a relationship, obviously you're taking majority control ownership. What should the entrepreneur's mindset be for something like this? And what do they need to be prepared and have everything to have a really smooth and streamlined process for this kind of control change?

You know, we. And I think your audience is probably more on the tech side than the buyout side. So I think on the tech side, it wouldn't necessarily be a controlled change, but it would definitely be a change in kind of operating day to day. I think the biggest thing that we focus on is obviously that the leader in the team and I kind of use the Brad Smart top grading process to really get in and understand how the entrepreneur thinks. So it's more than just technology and resume. It's really understanding because we have some opinion about what's likely to happen in the future. You know, it's developing some kind of downfield vision about what's likely to happen and how the team's likely to respond and navigate those kind of foreseeable challenges. You know, I would prepare as an entrepreneur, I would prepare to really not give me a sales pitch, but really kind of help me understand how we're going to partner and leverage the collective brain power and Rolodex and technology to accomplish the mission.

Got it. Okay. So, you know, you've been in San Diego a bit now. You obviously have compared and contrasted food and lifestyle to the Midwest. Being the tacos and tech podcast we got to know at this point, have you found a favorite taco spot or maybe multiple spots?

So when I moved to San Diego, I moved to La Jolla because I wanted to be near the beach. And my favorite taco place in San Diego was Galaxy Taco in La Jolla. You know, it's pretty much anything you're in the mood for. They have. Whether you want something that's like, upscale and fancier, you just want like a good, solid shrimp taco. And it's a fun atmosphere, too.

Yeah, great one, for sure. Well, Christopher, really, really appreciate getting the time to, to chat with you, getting to know you, getting to know that the resources are available to entrepreneurs. What's the best way that people can get in contact and get to know more?

Yeah, I'm happy to help. So the best way is to reach out through email. You know, I travel a ton, maybe not so much now, but in general travel a ton. And email is easy to respond to it late at night. And you know, if, if your listeners are looking for kind of a second opinion or some advice or even, you know, access to capital, you know, happy to come in and do what I can to support them.

Yeah, we really appreciate that. We'll make sure we put your contact info in the show notes. Christopher thanks so much for being on the podcast.

Neil, thank you. This has been great. Really appreciate it.

Thanks for joining us on the Tacos and Tech podcast with Neil Bloom. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem. Big shout out to School of Rap.

For our rad intro music.

And thanks as well to Nest Podcast Network where we are recording live inside their studio at Nest coworking in Bankers Hill. You can find Neil Bloom on Twitter eelbloom as well as fresh brewed tech and tacos in tech Pod on Twitter too.

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