From Business School Professor to Venture Capital CFO: Steve Glover’s Leadership Journey | Venture Capital Series

Anthony Codispoti (00:00)
Welcome to another edition of the Inspired Stories podcast, where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Cotispodi and today’s guest is Steve Glover, Chief Financial Officer and Administrative Partner at Pellion Venture Partners.

Now Pellion has been in business for over 30 years and is deploying their eighth venture fund. They invest in early stage technology companies, sometimes before the company has revenue. But more commonly Pellion invests when the company has two to five million in revenue. Pellion typically has a seat on the board of directors and its mission is to work with talented entrepreneurs to help them scale their business by providing customer connections, talent recruitment,

business and market insights, and being a sounding board for the entrepreneur. Because let’s face it, being a CEO of a startup company is very hard and can often be lonely. And Steve brings a wealth of knowledge from his decades as a business school professor and associate dean at the BYU Marriott School of Business. And he’s earned recognition as an outstanding auditing educator. He has served on the US Auditing Standards Board.

Steve Glover (01:01)
Steve brings a wealth of knowledge from his decades as a business school professor and associate dean at the D.Y.U. Marriott School of Business. And he’s earned recognition as an outstanding auditing educator. He has served on the U.S. Auditing Standards Board

and as president of the auditing section of the American Accounting Association. He’s a certified public accountant and received the Deloitte Wildman Medal Award for his impactful publication.

Anthony Codispoti (01:17)
and as president of the auditing section of the American Accounting Association. He’s a certified public accountant and received the Deloitte Wildman Medal Award for his impactful publications.

He also contributed to various widely respected auditing, teaching, research, and practice resources. Through his extensive experience and leadership, Steve enjoys mentoring talented, ambitious professionals striving for success.

Steve Glover (01:37)
Through his extensive experience and leadership, Steve enjoys mentoring talented, ambitious professionals striving for success.

Now before we get into all that good stuff, today’s episode is brought to you by my company, Add Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line.

Anthony Codispoti (01:46)
Now before we get into all that good stuff, today’s episode is brought to by my company, Ad Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line.

One recent client was able to add over $900 per employee per year in extra cash flow by implementing one of our innovative programs. Results vary for each company and some organizations may not be eligible.

Steve Glover (02:01)
One recent client was able to add over $900 per employee per year in extra cash flow.

by implementing one of our innovative programs. Results vary for each company and some organizations may not be eligible.

Anthony Codispoti (02:15)
To find out if your company qualifies, contact us today at addbackbenefits.com. All right, back to our guest today, administrative partner and CFO of Pellion, Steve Glover. I appreciate you making the time to share your story today.

Steve Glover (02:15)
To find out if your company qualifies, contact us today at adtactevidence.com. All right, back to our guest today, administrative partner and CFO of Hellion, Steve Lovell. I appreciate you making the time to share your story with us. Thanks, Anthony. It’s great to be with you, great to meet you. And I will tell you, this is my first podcast. I’ve done other.

Presentations I’ve done broadcasts, but thanks for having me. We’ll see how this goes.

Anthony Codispoti (02:40)
I’m confident in your abilities here. I’m looking forward to it. So we ran through a list of your background, your accolades, your experience. What first attracted you to the world of accounting and finance?

Steve Glover (02:56)
I didn’t have a lot of background. didn’t have family members. My dad was a high school teacher. And, ⁓ in, hindsight, it was pretty naive. I wanted the professional degree and I actually wanted this little university time as I could get. And that led me to accounting, ⁓ CPA, ironically, as you mentioned, I then got a PhD and spent years as a professor. So my master plan probably didn’t work out all that well in terms of minimizing university.

Anthony Codispoti (03:26)
I love that. So the plan was, let’s look at the course requirements. What’s the professional major I can get out of here with with the least amount of coursework?

Steve Glover (03:30)
Yes.

Yeah,

an attorney would have taken at least another year. I’m like, nope, I’m going to go with the accounting program.

Anthony Codispoti (03:41)
And boy did you get lucky, it just clicked, it fit, huh?

Steve Glover (03:43)
Yeah,

yeah, you’re right. It fit and it’s been a great career.

Anthony Codispoti (03:49)
So you were an auditor for KPMG and director of the US National Office of PWC. What was the most interesting project that you worked on at PWC and what did you learn there that you still utilize today?

Steve Glover (04:08)
Yeah. So I was an auditor three years way back when then I go into this doctoral program, which was four years. was at university for six years long enough to get what’s called tenure continuing status. And then it’s a great thing about a university career. said, I want to put that on hold and go back to practice. So I was on leave from university, moved to New York city area, the national office of price waterhouse, Cooper’s and

PwC at the time, they’re like, what are we gonna do this professor? So the natural place was to put me into some training. So I started to develop training, which that was fine. That was great. The training had to be reviewed by their practice partners, the methodology partners, the risk management partners. So I get a call, it’s like, is this the professor? I said, yeah, it’s like, where’d you come up with this material? And I have done research in this area.

And they said, actually your training is better than our methodology and our policy. So we’re going to bring you over and have you work on our policies. So it was fun. We started working on what I’d call fundamentals, building blocks of what auditors do, the judgments they have to make. And the question we had is, will the practice have an appetite for this, you know, new methodology, which is really back to the, back to basics. And I was there at a very historic time, a year before the

massive frauds of Enron and Worldcom to a year after. So what happened was these projects that were kind of on the back burner got pushed right up front. ⁓ The result of those frauds was ⁓ oversight, regulatory oversight, the public company accounting oversight board. So boom, we’re deploying new policies, new methodologies.

Anthony Codispoti (05:54)
all the

stuff that you had been working on behind the scenes.

Steve Glover (05:55)
Yeah, I’m flying all over

the world. You know, I’d go to Spain and somebody would say, how was Spain? Like, I don’t know. I got to the airport. I got in a cab. went to a hotel. I trained for two days. I got back in a cab and flew home. And ⁓ so that was fascinating. And I then consulted with PWC and some other firms for about the next 20 years as a subject matter expert.

Anthony Codispoti (06:19)
Wow. ⁓ And so just sort of by happenstance, they’re like, professor, let’s put him into training. The training materials you were coming up with were so advanced, they’re like, we got a better spot for you. And then just the timing of what was going on in the world with the end runs and things blowing up, the auditing work that you had been sort of building the scaffolding for now became really important.

Steve Glover (06:26)
Yeah

Yeah.

That’s right.

Yeah. Yeah. Right place, right time. And, ⁓ it was super rewarding. You know, I, I came back, ⁓ to the university. was kind of working two full-time jobs. I’m still trying to roll out this methodology for PWC, trying to get back. And it was interesting. I was teaching a master’s class and I was so excited to teach them all the things that I’ve been doing. And a few weeks in, realized, I’m speaking at a pace and a level.

That a graduate student has no idea. had to just slow it back down, cut back materials because I’d been in the national office, you know, at the leading edge and I was so excited to deliver all of that and pack it into a class. And but the big advantage of being that involved in practice is, you know, our students have a pretty strong BS filter. And I remember the first time they started fact checking me with their phones, I’d say something and

Hey, the guy’s right. But by being that involved in the practice, they settled down and they started having faith in the process. I guess if you consult with these large firms, I guess he can teach us something. So that made the classroom just a lot of fun.

Anthony Codispoti (07:57)
That’s so interesting. I’m several years removed from having been in ⁓ a college classroom. The internet wasn’t really a thing. Certainly, mobile phones, smartphones weren’t a thing. It never occurred to me that people are fact checking their professors during the lecture.

Steve Glover (08:12)
Yeah, yeah. No, it’s it’s funny because, you know, I would say I think it’s either this or that. And then like a minute too later, it was the first one. So then you kind of get used to saying, could somebody look this up? And then that’s right. That was the company. Here’s the story or something like that.

Anthony Codispoti (08:30)
That’s fun. Okay, so how did the opportunity to join Pelléon come about?

Steve Glover (08:35)
Yeah, that was not part of a master plan, so I’m having this great career. What I liked was the variety. I love teaching, but just like the students, I would count down the days to the end of the semester. And I love the hard break. I realized if all I did was teach, I’d burn out. I love the writing and the research, particularly the creativity of a new idea and gathering data. But I also realized if I just did that, I’d burn out. I love consulting, but we had a young family and I couldn’t.

Convinced myself doing that at that level ⁓ would be the right fit. But that combination was just great. And then as one does, you get invited or voluntold to get into administration. So I first became a department chair, then an associate dean. And after that seven, eight year run, it’s common to take a sabbatical. Okay, you’ve just had a long run administration, take a little leave. So.

This is now 20 years from the last leave when I went to PwC. And the new dean had said, you know, you could go back and just be a regular faculty. You’d be great at that. But we’d love to use your talents to run our help run our Rollins Center for Entrepreneurship and Technology. So I said, OK, I’ll go out to incubators and competitions in the startup space. And I’d met ⁓ donors and the BYU network. And I was actually on a trip with

the managing partners of Pellion and they were curious. say, Hey, what are you going to do during your sabbatical? I don’t know. I’m to go out to incubators and this and that. And they’re like, you know what we do. Right. And I knew a little bit of what they did. They’re like, we’re seeing pitches all the time. Just come hang out with us. So I started to hang out and I realized it was a little odd. Like who’s this weird professor that comes up once in a while. So I said to him,

I’m already getting paid by the university. Let me just come and be part of the team. Just give me projects, put me to work, take me to board meetings. So the, the one of our, yeah, just, just for fun. And one of the partners, he’s a hoot. He would become to a board meeting and he’d introduce me and he’d say, this is Steve. He’s our fall intern. So I was just around and working on projects.

Anthony Codispoti (10:35)
Just for fun. ⁓ little pro bono work. Yeah.

Steve Glover (10:52)
And in hindsight, there were clues and hints. I didn’t see any of them. At one point, the managing partner Blake said, hey, could we hire you one day a week? And I said, nope. And he kind of looked at me and he said, if I’m at the university, I cannot have another employer. Now, if there are consulting projects, that’s paid professional development. That’s a win-win. I can do that. So he goes, OK. By the way, he announces, we’re going to hire Steve one day a week. It’s like, no, anyway, right? then, yes, exactly.

Anthony Codispoti (11:16)
Gotta use the right terminology here.

Steve Glover (11:21)
very much in the terminology as a professor. So a few months later, he comes in and COVID had hit, I’m still hanging out cause they’re open. Everything else is shut. And I’m thinking, wow, how am I going to go get exposure to the rest of this ecosystem? And he says, ⁓ just, just leave BYU, come be our CFO, COO, whatever title you want. And honestly, it was a shock. I literally said, why would you do that?

And he said, what do mean? said, I have never done that. And I haven’t, this is not my industry of expertise. And he said, you’re going to figure out, figure our industry out. We just want the whole package, which I interpreted to be, had more gray hair than anybody else. And this one old guy. Yeah. And, so the university was awesome. I went to them and said, I kind of want to explore this. So I went from a paid leave to a personal leave. And I told.

Anthony Codispoti (12:03)
They just wanted a gray haired at the tables.

Steve Glover (12:18)
Pelleon, you really ought to try me before you buy me because you don’t go to universities to find operators. And I kind of want to try you before I buy you because I got a great gig at BYU. So I did that for about 10 months. yeah, for sure.

Anthony Codispoti (12:30)
Were you questioning your ability to do this at this point?

Even with the background at Pricewaterhouse, Coopers, and all the other things that you had done before? Because this is different.

Steve Glover (12:38)
Yeah, there were times at PwC

where I got exposed to something so technical that I realized I could do it, but it would be like eating food I don’t like to eat. So I ran into places where, yeah, that’s probably not a natural fit for me. ⁓ No, at PwC it was this area called derivatives. And I’d understand a piece. Then I get in a room with 12 partners and I realized all 12 of them had a different expertise.

Anthony Codispoti (12:55)
Like what? Like more on the operations side of the actual.

Steve Glover (13:08)
And they were all deep. And the first one made my brain hurt, let alone try to figure out all these others. So, no, I didn’t know the industry. I didn’t know that the company, the team. I figured what a low risk way to try this risky endeavor. And, know, it’s interesting, Anthony, had I tried something like this, maybe 15 years earlier, I think I would have been a nervous break because I would have wanted to know everything on day one.

When I rolled in, I’m like, I don’t know everything and I’m okay saying, I don’t know, but I’ll figure it out. And fortunately, yes, yes. Yeah. You know, the, experience has allowed me to say either I’ll be able to figure it out. I’ll be good at it or I won’t. I’ll go back and do the university thing. had a fallback. So, but you’re right. The collection of experience allowed me to add value right away while I was trying to figure out.

Anthony Codispoti (13:40)
and that’s something you got more comfortable with saying with age.

You had a fallback. You had a great fallback.

Steve Glover (14:02)
the technicalities and my finance team was really great. So yeah, in hindsight, I sort of see how the pieces of puzzle came together, but it wasn’t in my case, a deliberate strategy. I didn’t know much about the asset class or the…

Anthony Codispoti (14:20)
At what

point did it kind of click for you and you’re like, yeah, I get this.

Steve Glover (14:23)
Yeah, OK, so

this happens when you sit in a meeting and you’re trying to figure out what in the world they’re talking about. So I’m looking up the terminology lie, which means I’m behind the conversation. Then there comes a time when you actually start tracking the conversations and then you know when something happens, when all of a sudden you’re ready to contribute and you say, why are you thinking about it that way? Because I think about it this way. Then they turn over and they were that come from.

Then you start having fun because you can bring a different perspective to these otherwise super smart people and a challenge in an appropriate way, ⁓ sort of the status quo or the way they’re thinking about it.

Anthony Codispoti (15:07)
Okay, all right, now let’s get into what Pellion actually does. Let’s hear it from your words.

Steve Glover (15:08)
get into what Pelleon

Yeah, Pellion is for those who don’t know the asset class venture capital will go out and find investors. It could be pension funds, institutional investors, family offices, high net worth individuals will raise money. We don’t take the money in. They make a commitment. So our current fund is $500 million. It’s a large early stage venture fund. It’s our eighth fund. So if you’re an investor, Anthony, you’d say, I’m in for a hundred thousand.

We won’t call 100,000. We’ll go find a great company and then we’ll call a piece of that, 10 % of that. So over the first five years of a fund, we’ll make initial investments. Then we’ll sit on the board and our goal is to help that ⁓ entrepreneur to be successful for them and for us. Yeah. Yeah.

Anthony Codispoti (16:01)
Quick question, Steve, sorry to interrupt. How

often is it that people commit the money and then when you go to say, we’re ready to invest that commitment, they’re like, sorry, no can do.

Steve Glover (16:13)
Yeah, for us, it’s very rare that what will happen is sometimes someone will commit. They’ll have a life change, usually it’s individuals ⁓ or maybe they have another business that they want to run. And so what they’ll come to us and say, I could do it, but it’d be a stretch. And then they’ll say, you think someone else would like to buy the, my commitment. And by that point we’ve already invested, so it’s not a blind pool. So then you go to somebody and say,

Here these great companies we’ve already invested in, would you like to buy the rest of that commitment? Or if it’s small enough, the partners will just buy the commitment out and we’ll take a bigger personal stake. Yeah. So we, ⁓ we’re looking for great companies, really great entrepreneurs, great founders, particularly when we’re investing pre revenue. It’s gotta be.

This is a person we’d take a phone call from at eight o’clock at night when things aren’t going well on a Saturday, right? We’ll take a board seat and then with the expertise of seeing the startup happen over and over and over, we try to just help them ⁓ avoid the traps, their hurdles, help them get customers, ⁓ help them think about talent acquisition and when to scale, when to sort of pour on the fuel to really grow fast.

And then our business is there’s an exit. It’s acquired by another company. go public. Those proceeds come back and we distribute to our investors. And if you’re an investor in a Pellion fund, our goal is after all expenses, I think paid out, you put in a dollar, you get three back.

Anthony Codispoti (17:56)
So are you guys taking over any centralized ⁓ admin function, legal, payroll, HR, sort of centralizing that for all of your portcodes, or are they kind of on their own?

Steve Glover (17:56)
taking over any centralized admin functions, legal, payroll, HR, centralizing that for all your core codes? Yeah, we don’t.

There are some models where they bring in early and they say, we’re going to add all that. We take an equity position, 8 to 15%. So we don’t take a majority position. We’re not running the company. We don’t want to operate. But we’ll be as involved as that founder wants us to be.

And we can bring in, for example, I was just meeting with our HR professionals and I said, I think our firm Pellion doesn’t need a lot of the services right now you’re offering, but our startups do. So we can send them say a ⁓ beginner ⁓ employee handbook, just things that they wanna have for hygiene of a business. And then we’ll say, and you can get some sort of free time from.

our HR consultants. We’ll give them some initial guidance on cash management. But we’re not operating and we’re not providing those services, although we’ll facilitate and network into them.

Anthony Codispoti (19:05)
And so when you’re talking about helping with marketing, kind of helping find customers, it’s more like introductions to people within your network kind of a thing.

Steve Glover (19:11)
Yes. Yes,

exactly. And with some of our younger partners, you know, we’ll do something like we’ll try to win the internet for the day. So we’ll blow up Twitter and LinkedIn when one of our companies has a product launch. And so we use our network to try to get that awareness out.

Anthony Codispoti (19:33)
What was a recent, ⁓ launch that you guys are excited about?

Steve Glover (19:35)
⁓

Yeah, we’ve done one for a company called redo as they had a product launch when we announced fund date. Weird, even though it’s not a we’re not a public company. NASDAQ wanted to recognize it. Why? Because they want access to our portfolio companies. So we went out with some of our CEOs, rang the bell, got on the, you know, sort of the.

the big screens and so forth and then we try to win the internet for the day. So for ourselves or for our portfolio companies.

Anthony Codispoti (20:08)
And so that’s just blasting all the socials, getting, you know, pulling as many levers and strings as you can with connections that you have in press. Sure.

Steve Glover (20:10)
Yeah.

Yeah, and by the way, this is not my expertise. They’ll often

give me the copy. I’ll customize it. And frankly, if you’re to go look me up, the only thing I post is when it’s time for one of these. And I’m shocked. I’ll get this report back. This for me is amazing because I don’t know anybody follows or sees anything that I do. So I’ll get like 6700, you know, views or posts, which to me, if I had to, I’d be pretty happy. So.

It’s not me, it’s them creating this buzz on a day and then they’ll get hundreds of thousands.

Anthony Codispoti (20:50)
You know, you mentioned, you know, one of the things you’re kind of looking for is, is this the kind of person would want to take a phone call from at eight o’clock on a Saturday night? And so maybe you can walk us through a specific example and you can omit names if that’s important of a time where, yeah, one of your startups, one of your founders, they hit a wall, like they hit a crisis on something and you or your team were able to kind of step in and kind of help right that ship.

Steve Glover (21:10)
and you or your team were to of step in and kind of help fight that chip.

Yeah. As you might imagine, creating something from nothing, it happens all the time. So what’s common is maybe two founders stop getting along. That’s tricky because you have to figure out what that exit is in an early stage company and what the value is.

Sometimes a friend of theirs is really great as the chief technology officer until you get enough scale and enough growth that they can be a part of the team, but they’re really not the leader. ⁓ During COVID, we had companies that we thought that was going to be the death blow. And we saw other investors run. We jumped in and said, all right, what do we got? How do we do this? How can we help you through?

When those companies figure out how to get through, they’re stronger, they’re better. And what we develop is this Uber loyalty on both sides, right? And they’re the kind that they’ll recommend us to other founders. And if they exit that company, they’ll come back around the next time and we’ll be partners again, in terms of a company.

Anthony Codispoti (22:23)
And he said there was one example where other investors

were running away and you guys were like, no, we’re in. What was it that you saw that when everybody else was zigging, you were zagging?

Steve Glover (22:36)
Yeah, I’d say that’s a philosophy of Pellion. think ⁓ over time, it’s something they’ve developed. It’s just the right thing to do. If we believed in the business and the founder enough to invest money, we know they’re not all going to be home runs. We know it. So if we know that we can still honor and respect the founder. So sometimes that looks like

a pretty disappointing exit, you know, from a investment standpoint, maybe that’s 30 or 50 cents on the dollar. It’s still an exit for the founder. They’ve learned a tongue. There are some shops that say once we’re not going to put more money in and it’s not working, we’re not going to invest time. We need to move on. Right. I think we found that it’s the right thing to do. It’s the right way to treat people. And again, those founders, they’ve got

some street smarts that they didn’t have before they started that company and they have a drive and a hunger to be successful. They’ll come back around. So it’s the right thing to do. And it actually ends up being good for business.

Anthony Codispoti (23:48)
So.

Tell us how you’re different. mean, what you’re describing sounds really great. There are other funds that do similar things. What sets you guys apart at Pellion?

Steve Glover (23:52)
Yeah, I’ve

what’s interesting is I I can be an outside view. I’ve been only at Palaeo now for for five years and like with other businesses, what these guys had been doing was just grinding, just working, being smart, making smart investments.

And at the point that I joined, I’d say their flywheel was turning better than they thought. They were still an absolute heads down grind mode. And what we’ve realized is we have a pretty great brand. It’s one of the best brands nobody’s heard of. And so part of what we’ve been doing is saying, what does distinguish us? Right. So founder first, I think we describe ourselves as hardworking, smart.

people that really enjoy working with each other. And we take a collective view. Some firms, if you source a deal, that’s your deal. And we still have some attribution about who was the one that founded and sourced it. But we win collectively, we lose collectively. And the founders sort of see this is a great vibe. This is a good group of people, high character, high integrity, hard work. Yes. Not fighting against each other. And that comes from the top.

Anthony Codispoti (25:11)
Teamwork, partnership, you’re not fighting against each other, you’re working together.

Steve Glover (25:17)
very generous managing partners. So something that’s unique is ⁓ the upside for the venture side of the business is ⁓ if things go really well, we in turn all of the investor money, then we share on the upside. That’s called carried interest. At a lot of firms, the carried interest goes to the top partners. At our firm, everybody

in the firm has access to carried interest, either by name or at an employee pool. And that creates this, we’re all in this, when there’s an exit, everybody participates. ⁓ And that’s an abundance, a generosity mindset from our founding and our managing partners.

Anthony Codispoti (26:04)
So the next question I want to ask, Steve, I’m going to challenge you to break this down in a way that a layperson can understand. Because in your role as CFO, you handle fund valuations, ⁓ investment allocations. Can you describe in a way that we can understand some unique methods or frameworks that you’ve introduced to ensure fair and forward-looking valuations, especially for early-stage companies?

Steve Glover (26:21)
Yeah, it’s

a great question and you can imagine there’s some art, there’s a little bit of science, there’s some judgment, there’s some industry benchmarks.

When we’re investing in early stage, there’s not a lot of track record. There’s not financials. We can’t do projections. So the early valuations are really what investors are willing to pay. So you’ll price around, right? So if we invest in 10 % of a company, we, and we, whatever dollars we put in, you can multiply that essentially by 10 to know what the value you’re placing on the enterprise. What we look for

is to help that company be successful. This was a surprise to me. Often the next round will be, we’ll participate, but we’ll be led by an outside sophisticated investor. Why do we like that? Because they’re coming in, taking an independent look. They’re going to price the round and then we’ll mark up our valuation to what that priced round is. So the, the sort of the

The easy model is if there’s a price round, we’re going to mark essentially to that round. Now in between priced rounds, you look to see, yeah, what you look to see is are there meeting, beating expectations? Are they growing revenue? So if they were worth this and they’re producing 3 million in revenue, if they’re jumping to 30 million in revenue, their valuation is growing. So then there are multiples and models we’ll look at.

Anthony Codispoti (27:45)
I was gonna say, do you do if you don’t have that?

Steve Glover (28:06)
The hardest are when things are just kind of flat and they’re struggling. At what point do you start saying it’s not even worth what the priced round was? And there are models when we get a really complex valuation because we’re audited by auditors, right? So we have to stand behind ours and have rigor. So we’ll hire a third party ⁓ valuation. So we’ll do it. We’ll provide them the information. They’ll come in and they’ll look at

other comps, ⁓ flows, projections, and then we’ll come up with, by the way, this is an area that I researched before. And what I would tell you as a professor, we can come up with a point estimate, but the plus or minus, the uncertainty bound around that’s significant. So we kind of all nod and wing and say, here’s a point estimate. Then if we ask, could it be higher or lower? We say, yep.

So. ⁓

Anthony Codispoti (29:05)
So

when you talk about these different models, is there ⁓ like a standard list of like 10 different models where you’re like, ⁓ this one sort of fits, let’s pull this one out, and we’re gonna tweak it a little bit.

Steve Glover (29:07)
Yeah. Yeah, yeah, yeah. ⁓

Yeah, yeah, that’s right. So there’s a handful of models and actually the accounting standards lay those out. So a price round, there’s an option pricing models. You enter in things ⁓ into a mathematical formula. There’s discounted cash flows, which is better for later stage. There are market comps as they start getting to the size and shape that you could compare them to public companies. And so

You’d say you could look at a list of 20 public companies and a simple example would be if they’re trading at five times revenue next 12 months or past 12 months revenue. That’s a ballpark for an early stage and then you might back off depending on what you know. you basically.

Anthony Codispoti (30:07)
Would you price an early stage at a similar multiple as what you see trading publicly?

Steve Glover (30:13)
Yeah, it’s a good question. What’s interesting is in different market conditions, sometimes the private dollars are getting even higher multiples or lower multiples. So then you go through that thought process to say, what is the realistic comparison? We don’t take the top of the public company. We don’t take the bottom. You’ll see us say, should they be at the median? Should they be at the first quartile? So the answer is we don’t just do that.

but it’s informative as we go. And sometimes we’ll do that, take a discount.

Anthony Codispoti (30:45)
How much does the motion factor into these valuations?

Steve Glover (30:47)
Okay,

super good question. So imagine you’re the partner sitting on the board. You’re the one that made the investment. You’re very emotionally tied in. You want them to be successful. You’re sure the projections are going to come. So as a finance team, we’ll come to you. We’re going to get all of that. And then we try to be as objective as we can. We want to hear all the emotion. want to know why you’re passionate about it. And then we say, are there signs?

data, does a model support that? And then we’ll have, you know, a crucial conversation where you say, I think it’s worth this. And we say, we think it’s worth that. And then what we’ve learned is what it’s worth on paper is interesting. What it’s worth when it exits, that’s what matters. So we’d say to you, what’s your hurry? Go build a great company with that founder, right? Help them.

When you get an exit, we’re all going to agree what the value is. And we hope it’s higher than what we’re anticipating, but we’d like to be sort of slow to write up so that we’re not ⁓ telling our current investors it’s worth this when the exit’s going to be here.

Anthony Codispoti (32:02)
Is there ever FOMO that kicks in? You’re getting competitive with other funds for an opportunity and you’re like, ⁓ we were going to do this. Now we’re going to do this to kind of meet where they’re at.

Steve Glover (32:12)
⁓ The answer is yes. Some of that happens because the investing partners ⁓ won’t understand what we’re trying to do from ⁓ finance and accounting and reporting. And we know, by the way, that we have an auditors come in. They’re going to look at all these. They’re going to kick the tires and they see lots of funds. But you’re right. There is pressure to have what a higher sort of market value on your balance sheet.

And I think our finance team sort of built up the reputation that we’ll be fair. We’re not trying to be naysayers, but it’s painful to do a write-up and then all of a sudden realize it’s just not happening and then have to take a write-down.

Anthony Codispoti (33:03)
So Steve, in your position, you’ve been in the academic space, you’ve been on the corporate side of finance, you understand kind of these two different worlds. You mentioned that, you know, often people aren’t shopping from ⁓ higher education for operators. But I’m curious, from your perspective, what do you believe startups often misunderstand about financial management and how can you help them course correct?

Steve Glover (33:19)
I’m curious from your perspective.

Yeah. they’ll often under invest in, ⁓ sort of financial processes, talent back office. makes perfect sense. If you’re two people starting a business and you don’t have product market fit, you don’t have revenue. The least, the last thing you want to worry about is paying somebody to track nothing. So it makes sense. You don’t invest early on. What happens is when, a great company is really great, takes off.

And they tend to think about the policies, processes, reporting, finance as an afterthought. The downside is you can run out of cash. You’re doing so well, but the scaling process is really capital intensive. So you need somebody to model out. What do we need to raise funds? Right. If you run out of cash and you haven’t started the fundraise process, you risk disappointing customers and

having to lay people off right in the middle of scaling up. The other thing I don’t know about you, have lots of friends who have started businesses and most of them have had embezzlement or theft because they just trust and they don’t think about it. And it’s too easy for someone, a sole person. So we really worked through that early on. We’ll give them some guidance and then our board member will watch and say,

You’re the size and shape at a pace where you need help, either a fractional controller, CFO, and then we’ll use our network. Often these people have had great experience. They might have an exit. They’ll take six months or 12 months off and then we’ll phone them and say, we have your next adventure ready. Come back and, you know, lead your, lean in on this next startup.

Anthony Codispoti (35:21)
That’s fun. So you won something called the Deloitte Wildman Medal. What is this and why was it awarded to you,

Steve Glover (35:31)
Yeah, thanks for ⁓ pronouncing it that way. That’s the right way. It’s a guy’s name and he was a leader with Deloitte. People at my firm like to say I won the Wildman Award.

Anthony Codispoti (35:45)
it sounds like there’s another story to be had here.

Steve Glover (35:47)
Yeah, so

⁓ what it is, it’s an award for the biggest impact on the profession of accountancy. So I’m to give you a little bit of ⁓ background in my doctoral program. The area of expertise, one of my minors was cognitive psychology. So that’s judgment decision making. It’s we’re really sophisticated thinkers. We can drive cars, fly planes, but we use shortcuts that usually help us.

And when we understand the shortcut, we can find out where we’re going to be biased or fall into a trap or bias. So that was part of research. And I and another colleague at BYU ⁓ had done some work. We did a little bit of teaching in this and we were invited by and we published by one of the large firms, KPMG, to see if we could help them with a professional judgment framework. And we were probably a little too confident. And we said,

They had other professors in the mix and we said, you can look wherever you want, but we’ve been teaching this to executive MBAs. We’ve got the research, the skillset. If you want us, you know, going to pay for us or whatever. Anyway, we ended up going in and helping them develop as a massive project. professional framework on judgment decision and then trainings. And then we trained all their managers, ⁓ senior managers and partners on this framework.

And then interestingly, we said, that’s awesome content. That’s really great. It’s better than anything we’ve had in our classrooms. We felt a little bad that we just did this project and it puts to shame what we’re teaching our very own students. So we went back to KPMG and said, how can we solve this? Cause this is important, useful information for the classroom. And you’ll get better hires if we’re training this at the university. So to their credit, they said, let’s do it.

The next project is to create classroom materials to be available for free and to publish a monograph that walks people through it and points them to these training. it’s a beautiful thing about paid prof, we call it professional development, but yeah, we were paid for that work, but they’re, they’re recognized as the key contributor and the author. So they got the benefit of saying, here we are, we’re going to add this to the profession.

Anthony Codispoti (37:56)
And did they pay you for that work as well?

It’s good

PR for them.

Steve Glover (38:15)
It’s good PR in the classroom. Everybody sees it’s KPMG that’s delivering this material. Other firms subsequently have jumped into the space, but that monograph, that training material, the research sort of that body of work is what was awarded this most significant impact. And it’s funny over the years, you know, I’ll be somewhere and someone will look across the table and they’ll look at me and I’m like, you know, like.

You’re the guy that I had training from like 10 years ago and you did this or that. Yeah, that was me. Yes. Yes. Yeah. Yeah. ⁓

Anthony Codispoti (38:48)
So what was cool there is KPMG, hired you to do this work and then you guys recognized, hey, we need to get this into the classrooms. And not only were they open to using that foundation that they had paid you to create for them, they said, we’re gonna pay you extra to now put this in the format that can be used in

a classroom environment.

Steve Glover (39:11)
in a classroom.

Yeah, no, it’s honestly it was amazing. The whole thing was a highlight, right? A couple of a couple of faculty out of Utah fly into New York on a regular basis entering the studio. I’ll tell you, the first time we were going to go live with partners, there was a lot of anxiety on their side. Like, what? This is not Harvard. This is not Stanford. Where’s BYU?

And so we had these lead partners, a lot of skepticism sitting there. We deliver the first training. Yeah, that’s right. We deliver the first training and we taught so much together in executive MBA programs. had a lot of fun and they came up after and said, you guys will be all right. And then from there off, we went and we trained everybody.

Anthony Codispoti (39:44)
There can’t be smart guys in Utah too, right?

That’s fun. So in addition to CFO at Pelleon, you were recently named an administrative partner. What does that mean and how has it changed your work there?

Steve Glover (40:12)
Yeah, yeah, that’s an honor. Obviously, again, you don’t go to universities to pick off operators. So, ⁓ you know, if you’re going to hire an accounting professor, somebody who’s been on a standard setting board, you think let’s put them into technical accounting, which is where I started with Pallion and that made sense. I started to see opportunities where I’m just interested in business. I’m interested in helping develop people. I want Pallion to be

successful. I want it to be a better place after I leave. So I just started helping operate and run the business and pretty soon they’re like, why don’t we have Steve over that? And why don’t we have that person report to Steve? And what it did is it freed up our expert investing partners to go do what they do best, right? They need to invest. They sit on boards or helping really difficult challenges. They’re fundraising. So it freed them up.

to do more of what they do. So I’d say it’s a COO role. I probably spend more time now on sort of the operations of Pellion than the finances. And that’s a credit to my great finance team. They’re awesome.

Anthony Codispoti (41:26)
Steve, what’s a serious challenge that you’ve had to face and overcome, whether it’s personal or professional? How’d you get through it and what did you learn?

Steve Glover (41:37)
Yeah, it’s funny. We’re all have this where we’ll hit what I call a school of hard knocks situation. Sometimes we can watch other people go through hard things or like I’m going to learn from that. And that’s a great way to learn. Other times we find ourselves in a school of hard knocks. Like, how do they get here? What I’ve learned to say is, all right, instead of, you know, why me? It’s like, how do I learn from this? Why is this happening for me instead of to me?

⁓ so I’ll just share an example that comes to mind. ⁓ some years ago, I was in an organization where I was in a leadership position. I wasn’t the leader, ⁓ but I was on a small leadership team. And honestly, I thought he’s doing really well. I was probably a, a handful, right? Kind of an idealist. Let’s do this. We got to do that. Anyway, one day I was just sort of dismissed like, yeah, we don’t need your help anymore. And.

It seemed disrespectful, ungrateful. It came out of the blue. And you know, the natural thing is to heck with this. And so I had choices, right? Leave. I chose to stay. Stay. Do I undermine the leader and bad mouth him or do I just suck it up and say, I’ll never do that to someone. But it happened to me and I think I can add value. So I don’t know why exactly, but I chose to just stay, be all in, add value.

Here’s the funny thing. I started having people come to me asking for advice and saying where the organization needed to go. They’d laugh and I’d say, you’re talking to the wrong guy. I’m not in a leadership role. And they’d say, yeah, you know, we know we know you don’t have a formal role, but people look up to you and they follow you. And so I didn’t try to overstep my bounds, but interestingly, it wasn’t long before I was my boss’s boss. And I.

I just realized people are people and sometimes, and again, I’m sure here’s the narrative was who is this guy? thinks, know, I’m sure I had things that, uh, yes, something. So for me, the lesson was, you know what? Just do good work, be a high quality person, add value and opportunities come.

Anthony Codispoti (43:41)
This person felt threatened by you.

That’s interesting. As you started out that story, ⁓ I forget the exact phrasing you used, but it was more, why did this happen for me rather than to me? And just changing that one word changes the complete focus on the situation. When you’re saying, why did this happen to me, it’s like it’s a punishment. It’s like this is being imposed. You’re the victim, right? When it happened for you,

Steve Glover (44:08)
Yeah.

Yeah. Yeah, I’m the victim. ⁓

Anthony Codispoti (44:27)
You’re finding a gift in a difficult situation. Yeah.

Steve Glover (44:29)
Yeah, yeah, yeah,

like I said, I wish I was smart enough to avoid what I call the school of hard knocks. But I find myself in the school of hard knocks. And then I over time, I’ve gotten better at saying, all right, if I can learn why this is happening for me, maybe I can work through this a little bit faster and I’ll be a better person on the other side.

Anthony Codispoti (44:54)
The other thing you said that I really liked was, because this is something I try to teach my kids, is that in life we’re going to have a lot of great teachers. And many of those teachers are going to instruct us on what to do, how to do things correctly. And then some of those teachers end up being unintentional teachers, and they’re examples of behaviors that we don’t want to repeat. And that’s the message that I heard you convey. OK?

I could say the heck with this. could bad mouth him. could undermine him. I’m going to stay here. I’m going to continue to do good work. And I’m going to let that be a living example of something that I don’t want to do to somebody else.

Steve Glover (45:33)
Yeah,

yeah, that that was a painful experience. We’ve all had others and you can go down the path of say this person’s a jerk and they should do this or do that. But I do think a lesson is if you didn’t experience it well, when you get a chance to lead, figure out how to do it better and differently.

Anthony Codispoti (45:53)
Where did that mindset come from? You born this way, you learn it earlier in your career, just something that felt like the golden rule to do in the moment.

Steve Glover (46:03)
Yeah, I don’t know. I would say a little bit of all of those things. I’ve had great mentors who have, you know, from my parents, like, you know what? Tough things happen. Life’s not fair. You know, step up and figure it out and you’ll be better off and and treat others the way you want to be treated. So I’d say, yeah, a mix of.

that collective, good mentors, some core beliefs. And the other thing I think, Anthony, is once you see that work and you realize, I could have gone the other path, it would have felt good in the short term, but it would have been a disaster, right? Had I gone down the other path, what a disaster. Would have hampered opportunity and I’d become bitter and who knows what, right? So I think good fortune to…

pound through some of those and say, okay, that’s who I want to be. I want to be the person who lifts where I stand, looks to others with respect. And if they treat me ⁓ differently, how do I just not, how do I not pay the bad behavior forward?

Anthony Codispoti (47:17)
Yeah, what just occurred to me is there’s a line, ⁓ I took the road less traveled and that has made all the difference. And with you, I took the high road and that made all of the difference. Yeah.

Steve Glover (47:27)
Yeah. Yeah, yeah,

I would. By the way, it’s not to say I don’t make mistakes or I don’t. Have you know regret, ⁓ but yeah, that’s what’s nice about it is I can tell some my own ⁓ stupid human moments to my team now and say here’s what I did here that that didn’t work and here’s how I would do it now. And if I see them in a tough spot, I’ll sort of smile and say.

Here you are, you’re in the school of hard knocks. If you do this right, you’ll be in a better position on the other side. But their inclination is to fight or to point. And like, do not point, do not fight. You contributed to this drama, own your piece of it, and then be authentic and genuine, and then knock it off and do better.

Anthony Codispoti (48:21)
Can you think of a moment where you made a mistake, right? Looking back in your past, you made a mistake, felt terrible about it, it felt, I don’t know, crushing, like, can’t recover from this. And then with a little bit of distance, you look back and you’re like, man, I’ve got a lot of gratitude for that. What felt like a mistake at the time set me in a different direction, opened a different door, gave me a different perspective.

Steve Glover (48:48)
Yeah, I was, I’d say sort of hard charging idealistic. this junior professor, and there was some issue in the business school. ⁓ I think it was around IT and the way they were managing our systems and computers and all this kind of stuff. And I had a complaint and somehow I got audience with sort of a senior council as a junior faculty. And I came in pretty strong, very strong.

And one of the senior faculty basically said, I don’t know who you are, who you think you are, but nobody should talk to our administrators that way. Now I had a very good relationship with the lead administrator in the room. He hired me. So after the meeting, I said to him, ⁓ I apologize. I went too hard. And he kind of smiled and he said, yes, you did. And he said, your goal was right.

Or at least what you were trying to get us to do. You just did it in the wrong way. And it wasn’t a long sermon. It wasn’t a long lecture. He knew I’d already recognized that I got sort of hammered by that other faculty. What I learned is ⁓ I thought that the goal in business and life was the best idea wins and you just fight like heck to get your idea there. What I’ve learned through ⁓

some school of hard knocks mistakes is I want to contribute to get to the best idea. I don’t always know the best idea. A big insight for me is if you and I disagree and you’ve got an idea and you’re super excited about your idea, and maybe I think mine’s slightly better, I’m better off joining you because you’re all in, you want to lead it. Maybe we have consensus.

So instead of saying, think mine’s increment, mine’s 2 % better. That’s, we should do that. That’s the silly course, right? Let’s figure out as a team what we all want to get behind. So I was told once you’re an idealist and I’m, my response was you’re, you’re darn right. am. The more I understand looking back, it’s like, just because you think that’s the right way, the collateral damage on relationships and others is not worth it. So I’ve had to learn to

Anthony Codispoti (50:56)
Ha ha ha ha.

Steve Glover (51:09)
to trust, honor others. And by the way, you know this, you sit in the room, I’ll think I’ve got a really good idea of pay. And then someone will say, what about this? And then I’ll think, wow, that’s much better. I’m glad we had this conversation.

Anthony Codispoti (51:26)
They’re building on each other’s ideas. Steve, what’s your superpower?

Steve Glover (51:28)
Yeah.

Yeah, that’s a good question. I’d like to think I have a maybe good at a lot of things. I know if I’m great, but I think one of the things that I’ve found over and over again, and it kind of combines teaching, critical thinking and consulting what I do now is I can hear expertise and I don’t have to have that level of expertise to be able to capture it and translate it and interpret it and create an actionable model of framework.

The beauty of that is if you can create a framework, then the experts can use that language and framework as they’re mentoring their junior people. And the junior people can use that framework to ask questions in that language. So we did that with the KPMG example we talked about. then at Pelley and I have found opportunities where I saw people talking, but not connecting.

And then I’d sort of probe to say, are you saying this or saying that? And then I’d say, I think we can model some of this. So how would we construct a fund so that we can have choices about, should we put more dollars into seed? Should we put more dollars into a more dollars into late stage? And then the junior people say, okay, here’s our model. We’re going to put X percentage here, X. So then when something comes, we say, where does this fit? We can overrule the model. can.

make exceptions, we will, but we have a process to communicate together. And if we turn down a deal because we don’t have more space in the late stage, then we understand that’s where we are. We’ve deployed all of our late stage dollars, great company. Maybe we put some in just to say it’s what we call a logo buy. ⁓ So I’d say translator interpreting really technical things where I can talk to the

really technical experts into the junior people and help them. Yes, translator.

Anthony Codispoti (53:33)
You’re like a translator.

Yeah. For accounting and finance nerds. Yeah. That’s cool. ⁓ How about a recommendation in terms of like a ⁓ book, a podcast, a course, something that maybe folks who are aspiring to get into similar more junior roles and kind of work their way up that have been helpful to you.

Steve Glover (53:38)
Yeah.

Yeah. Okay. Well, I want to put in ⁓ a plug for a couple of our partners have a great podcast. It’s called investor operator or IO Tyler Hoag, Sterling Snow, and they bring in people who have operated and invested. They’re great. I’m going to put in a couple of other plugs. So this area of judgment decision-making, there are some now Nobel prize winning authors of ⁓ material. So

Anthony Codispoti (54:06)
Great, what is that called?

Steve Glover (54:27)
a famous ⁓ pair of scholars, ⁓ Tversky, Kahneman and Tversky. Danny Kahneman’s written a book called Thinking Fast and Slow. And it’s sort of helping us see how we sometimes need to step back. Sometimes if it’s a low risk, low important decision, go ahead and use your shortcuts. ⁓ There’s lots of good stuff on judgment decision making, they’re sort of really some of the

the foundational thinking in that area. Then we’ll give you one more. You kind of tell I’m I like to think about being deliberate in a career, even though my path has been deliberate. But who do I want to be and what do I want my career to be about? like so there’s a former Harvard professor, Clayton Christensen. He’s famous for things called the innovators dilemma and others, but he’s written a book, How to Measure Your Life.

with some co-authors. So it’s a way for people to sort of step back and think about what it is they’re trying to accomplish. Sorry about that.

There you go.

Anthony Codispoti (55:39)
Oh good. That’s a good answer. Lots of options there. And I’ve seen some of the stuff by Danny Kahneman. I know he’s very well respected. I believe he’s passed recently, but he’s, yeah, that’s a name I’m familiar with and he’s got a lot of great content that he’s put out there. Just one more question for you today, Steve, but before I ask it, I want to do two things. For everyone listening today, I’m going to invite you to hit the follow button on your favorite podcast app.

Steve Glover (55:42)
Yeah.

Yeah.

Yeah.

Yeah.

Anthony Codispoti (56:07)
We have had a great conversation here today with Steve Glover from Pelleon. And I want you to get more wonderful content like this in your feed. Steve, I also want to let people know the best way either to get in touch with you directly or to continue to follow your story. What would that be?

Steve Glover (56:23)
Yeah, probably LinkedIn. can find me on LinkedIn and the Pellion website you can find me. So Pellion Venture Partners or LinkedIn.

Anthony Codispoti (56:34)
We’ll include links to those in the show notes for everybody as well as we’ll try to find links to the the podcast that you mentioned so we can give ⁓ your colleagues a plug so ⁓ Last question for you. I’ve had a nice conversation here Would love to reconnect with you in a year as you’re celebrating something if you’re celebrating something a year from now What would you like that to be Steve?

Steve Glover (56:41)
Okay, that’d be great.

⁓ okay. On a personal side, ⁓ we’re going to celebrate our 40th Tina and I, ⁓ anniversary and, ⁓ kids, grandkids. So I’d say why easily the best decision ever made is to convince Tina, to take a chance on me. ⁓ professionally, Anthony, I want to leave Pellion. I’m not leaving in a year, but I want it to be better than where I found it. I think.

My most important legacy is to create the leaders that will follow me. So I want my team to have opportunities. want them to be able to be challenged, to develop, to grow. And it’s been rewarding. The things that I started doing technically when I first came in, I’m not doing a lot of that. Why? Because my team’s doing it. And I don’t withhold information. I don’t hold tap back tasks. I don’t restrict them from taking a leadership or opportunities.

because I know that’s what I want for them. And my view is if they’re doing that, it gives me time to go help in other areas. And if I replace myself with great young people, that’s awesome.

Anthony Codispoti (58:10)
But Steve Glover from Pellion, I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Steve Glover (58:17)
Yeah, it’s

been a pleasure. Thank you.

Anthony Codispoti (58:20)
Folks, that’s a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.