“Change is not a threat, it’s an opportunity” which I attribute to my friend, the marketing guru Seth Godin. Seismic is about change and about finding that opportunity.
As a part of our series about business leaders who are shaking things up in their industry, I had the pleasure of interviewing Steven Weinstein.
Steven Weinstein is the CEO of Seismic Capital Company, an early stage growth investor committed to identifying, guiding, and nurturing companies seeking to meaningfully disrupt the space they work in. Steven has been involved in the capital markets, financing, private equity, venture capital and real estate over the past 30 years. Since 2002, he has been the Managing Director of Marketmaker Capital where he managed numerous transactions, capital structures and projects ranging from real estate advisory, loan portfolio structures and private equity funding.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I might go with “peculiar” rather than “particular” regarding my career path. No pre-planned roadmap would have gotten me to this point, where we are shaking up both how capital is raised and also how it is deployed.
As a teenager and college student, I’d always thought law school would be in my future. I decided as I was finishing up college that I’d take a couple of years off to work as a journalist. I’d get a real-world perspective and then enter the world of jurisprudence with a fresh outlook and renewed drive.
The journalism thing was the obvious thing to do, since I’d spent time in college working on the Tufts Observer and also stringing for the Associated Press. My first AP byline came when I was parked at Massachusetts General Hospital, just in case Pope John Paul II, on his first visit to America, needed to be taken there in an emergency. Fortunately for all, his time in Boston contained no surprises.
AP gave me a series of jobs after graduation — Jackson, MS; Richmond, VA; Atlanta, GA; New York City. Two years became four, then more, After AP, I moved to Reuters, worked for them in NY and London in a pile of jobs. One gave me the opportunity to participate in and lead some bleeding edge technology developments — AI for news, hypertext for news, Windows for data. These things that all seem so ordinary today were right out of science fiction then.
When I left Reuters, a friend and I started a data management company — it started as a newsletter publisher and morphed from there. We grew it organically and through a series of leveraged buyouts and sold it in 2000. Over the last 20 years, I’ve had the privilege to be involved and invested in a handful of other ventures, and to advise on diverse projects from real estate to real estate securities to patents and patent litigation.
As noted, my career path has been anything but direct. Yet as I worked across multiple industries with early-stage companies, I started to notice that a lot of these companies consistently dealt with the same struggles, many of which could be helped by a stronger relationship with their investors — or by having some, as in a bowling alley, some bumper guards in place . With that in mind, my co-founders and I set out to launch a firm that would allow us to be true partners to our companies and put them in the best position to disrupt their respective industries.
Can you tell our readers what it is about the work you’re doing that’s disruptive?
We disrupt in three specific ways.
First is how we deploy our capital. We drive impact through the businesses and services we invest in. We engage with diverse and inclusive management teams. We back companies that create meaningful change in their industries and in the world.
Second is how we interact with our companies. We mentor, support and interact with our companies in a respectful, patient, nurturing way. We open our networks to our companies and their leaders. We provide strategic direction and advice, while, at the same time recognizing that the people who run our companies know way more about their specific business than we ever will.
Third is how we obtain the capital that we invest. We worked very hard to create a structure that opens our doors to all sorts of investors, not just the well-heeled and the well-connected. Our minimum investment is 1,000 dollars, a figure that is attainable for many families. Our Qualified Small Business Stock is intended to shield our investors from having to pay capital gains taxes when they sell their shares, and it also gives them an incentive to hold their shares for five years or more. By raising our capital in this way, we also can provide patient capital to our companies.
To summarize, we’re creating a culture that isn’t about “stepping over a dollar to pick up a dime.” These three components of our ecosystem are affirming and, we hope, rewarding to all our stakeholders.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Mistakes, so to speak, are rarely ever funny as they’re happening, but sometimes we can look back and not only get a kick out of some of the things that happened along the way, but also glean valuable lessons from those experiences. Earlier in my career when I was working in the marketing department at Reuters, we would have regular product review meetings with our managing director. We’d show him something we were working on, and he’d grumble, mutter, or otherwise sound disapproving, then leave the room. Our team regularly struggled to discern what he was saying, so I finally took a chance and asked him, “excuse me, but could you say more about that?” Hardly a controversial request, but my colleagues were stunned, speechless, pale even, and they all assumed I would be fired. Instead, I was promoted. That week, I learned it is not only ok, but encouraged to ask questions if you don’t understand something.
We all need a little help along the journey. Who have been some of your mentors? Can you share a story about how they made an impact?
There are two mentors that I think of every single day.
First, Dr. Terrall, my math teacher in 8th, 10th, 11th and 12th grades at St. Andrew’s School in Boca Raton, Florida. (I assume he had a first name, but I don’t know what it was). Dr. Terrall taught us when we were doing math to always “check back.” He’d explain how critically important that was — when you’re doing a math problem, if you have a mistake anywhere along the path, you probably won’t get to the correct result. So “check back” at every, single step. When I am developing a spreadsheet, or a projection, or just calculating something, I always always always “check back” at every step, to make sure I got it right, and I almost always think of Dr. Terrall.
Second, Bob Davidoff. Bob was my capital partner when I started doing leveraged buyouts. Bob had started his career as an accountant, but he soon figured out that he could leverage the assets of companies he wanted to acquire, and, in effect, buy them with their own money. Bob was doing leveraged buyouts, and maybe even invented the technique, long before Henry Kravis came on the scene and made the term famous. I had the privilege to work with Bob for many years. Bob taught me the power of saying “no” and meaning it. “No, we’re not going to do that” isn’t something you hear much anymore, but it sure is a useful tool when used skillfully, and when you mean it.
In today’s parlance, being disruptive is usually a positive adjective. But is disrupting always good? When do we say the converse, that a system or structure has ‘withstood the test of time’? Can you articulate to our readers when disrupting an industry is positive, and when disrupting an industry is ‘not so positive’? Can you share some examples of what you mean?
We called our firm Seismic because we’re interested not just in the fact of the disruption but also the effect of it. Sure, some disruption is not beneficial, and a good example is the pandemic we’re living through now. People are dying and suffering from the disease, and from the knock-on effect it has had to everyone’s lives. At Seismic Capital, we like the kind of disruption that people feel and positively influences the vast majority of the people who are affected.
For instance, we are currently looking to invest in companies that provide cash access to people who don’t or can’t have a bank account. Along those lines, we’re also prioritizing improving the availability of capital to often underfunded entrepreneurs such as women and minorities.
The Richter scale measures earthquakes according to degrees of “Can cause damage of varying severity to poorly constructed buildings, zero to slight damage to all other buildings, or felt by everyone.”
We’re looking to work with companies that create impacts that are “felt by everyone.” When we commence our Regulation A offering in 2021, it seems likely our share price will be right around 5.50 dollars, right in the middle of the zone of “felt by everyone.”
Can you share 3 of the best words of advice you’ve gotten along your journey? Please give a story or example for each.
- “That’s an ‘it depends’” which I attribute to my retired business partner John Trainor. John’s point was that context matters — always. And he used that phrase a lot. “That’s an ‘it depends.’” In my experience, it’s a good tool to get people to pay attention to a complex answer. It also has the benefit of being true a lot of the time.
- “Change is not a threat, it’s an opportunity” which I attribute to my friend, the marketing guru Seth Godin. Seismic is about change and about finding that opportunity.
- “Be yourself” which is my interpretation of the last words my dad, Philip Weinstein, said to me before he died in 1996. Every year I try to become more “me”, and every year, if I get it right, I become more comfortable in my own skin — and my own head. I am surrounded by people who inspire me by becoming truer to their own essences as time passes.
We are sure you aren’t done. How are you going to shake things up next?
Right now, and for the foreseeable future, I’ll be focusing my efforts and getting our companies in a good spot. But in the meantime, be on the lookout for our SEC announcement!
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
So much of what we do is about storytelling, and there are so many ways to tell a story.
The writer Henry Roth resonates strongly for me. When he was 26 years old, in 1934, he wrote a novel called “Call It Sleep.” It’s a depression-era novel of the Jewish immigrant experience, and it’s one of the most breathtaking pieces of writing imaginable. The book got virtually no notice, and quickly went out of publication.
To keep food on the table, Henry Roth worked a variety of jobs — from waterfowl farmer to psychiatric hospital attendant. 30 years passed before “Call It Sleep” became an “overnight” success, when the New York Review of Books reviewed it on the cover in 1964. Imagine waiting 30 years for your masterpiece to be discovered. Imagine asking yourself every day “what happened?”
Ask yourself, what would you do in this circumstance? Would you give up? Would you try something new? Would you do it again? Is this a special case, or an allegory that we all face every day? What would it take for us to believe in ourselves, on any decent day, or in the 30 years between successes? These questions haunt me and guide me. The answers change day by day, sometimes minute by minute, but they are good gauges for navigating through one’s world.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I learned to snowboard as an adult. I was 47 years old. I had hardly ever been on snow, let alone on devices to accelerate going down slippery, snow-covered mountains with the ability to break my bones into pieces. Because I was certain I’d end up captured in an avalanche, I ordered up an identification band with my name and emergency contact engraved on it. And something drove me to put a motto on it as well — I made up one then, and I had it put on the band: “Patience and Persistence”. So much of life is about putting one foot in front of the other until you get there. Maybe you can go faster, but you can’t teleport yourself to the end of having realized all your goals and objectives. A few years ago, in my mind, I added “and Priorities” — because you must decide what’s important and then skip past the rest. I did not make up a new band to commemorate the addition.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I’m focused on two things right now. First is Seismic Capital, where we are democratizing capital raising and steering it into areas that have not typically attracted investment. Our expectation is that we’ll excel on all of our multiple bottom lines — financial, diversity and inclusion, and stewardship. I hope we will change a lot of lives through this endeavor.
Second, in the nonprofit world, I am the chair of an organization called Tzedek America. Tzedek is Hebrew for Justice. And at Tzedek America we train teens to be engines of social justice. We reach teens in about half the states in the country now. Recently we started to leverage that work by creating a fund at Hebrew Union College (where, coincidentally, Henry Roth received an honorary doctorate) to train clergy and educators how to engage with teens in social justice work, and to develop best practices in the field.
Spreading the word, teaching teachers, reaching beyond the obvious — these are guiding principles that help us reach for the stars.
In my wildest dreams, a year of service will become a thing that enriches and draws people together, to create a better world. I’m thinking that my two priority projects will overlap someday, and we’ll find ways to hand over a fairer world to our youth, and they’ll have the skills to perfect it.
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