Xconomist of the Week Chris Rizik: Who Says A VC Has No Soul?
Chris Rizik is one of Michigan’s most important and successful venture capitalists. He’s the CEO and fund manager of Renaissance Venture Capital, a fund of funds that is perhaps best known for its early backing of the medical device company HandyLab, a University of Michigan spinout that was later purchased by New Jersey’s Becton Dickinson & Co. for $300 million.
In addition to having a reputation as a shrewd investor and a champion of Michigan’s economic growth, Rizik has a longstanding passion for soul music. He’s the owner and operator of SoulTracks.com, a website dedicated to the music genre. (More on that later.)
Rizik, a Flint, MI, native who grew up in a musical family, says his appreciation of soul music began early. He was the youngest of six brothers who counted the Four Tops, Donny Hathaway, and the Spinners as favorites.
“The best concert I ever saw was in 1972 at the Whiting Auditorium,” Rizik says. “The Spinners opened up for the Temptations and just stole the show.”
Rizik wrote music reviews for the State News while pursuing an accounting degree at Michigan State University. He later picked up a law degree from the University of Michigan and landed his first job at Dickinson Wright, a top Detroit firm. He was there for 13 years as a pension attorney, but, he says, he always knew he wanted to do something more entrepreneurial. He started a new group within the firm to assist entrepreneurs and, a few years later, he got a call from his old buddy Rick Snyder (who was later elected Michigan’s governor in 2010).
“He had been at Gateway, but he was moving back to Michigan and wanted to start a VC fund,” Rizik says. “We picked up right where we left off and I helped him start [Avalon Investments].”
Rizik, who started out as an attorney for the firm, says that he suspects Snyder always had it in mind that he’d recruit Rizik to be his partner, but, “as is his way,” he waited patiently for about a year for Rizik to warm up to the idea before he advanced the official proposition—which Rizik quickly accepted.
“It was pretty exciting,” Rizik says. “We were doing something very entrepreneurial, which we didn’t do well in Michigan in 1998.”
Avalon grew to be a $100 million fund and the recipient of three consecutive Deal of the Year awards from the Michigan Venture Capital Association. ”We were turning technology into companies, and we had some real success,” Rizik adds. “We really felt good about what we were doing.”
In 2000, Rizik and Snyder teamed up again to form Ardesta, a nanotechnology holding company that Rizik describes as being “pretty pioneering in the small tech space.” Ardesta became a global leader in commercializing technology licensed from universities.
“Chris has an uncanny talent for observing people and keeping perspective even in chaotic situations,” Snyder said in an email. “He can break down complicated items into manageable, understandable pieces and work with a broad cross-section of people to get things done.”
Despite his runaway success as a venture capitalist, Rizik never fully put down music or writing. He says he’d find himself writing articles about forgotten soul music legends on long plane rides. The Internet gave him an outlet to publish his pieces, and it wasn’t long before he caught the attention of radio. He did a couple of shows for XM, but that only helped him realize that what he truly wanted to do was write.
“In 2003, I went on Ebay and paid $50 for a program that teaches you how to create a website,” Rizik says. “It was the ugliest thing you’ve ever seen, but I built it.”
Rizik says the site, the aforementioned SoulTracks.com, was picked up in search engines within six months of launching and saw “significant” traffic numbers. Record labels began contacting him when they had artists to promote. SoulTracks kept growing organically and, in the process, Rizik discovered a new generation of soul artists he loved but who where completely underground: Eric Roberson; Frank McComb; Angela Johnson.
He had a vision: “What if I could build a website that served as a parallel universe for soul music, where you could get news, critical reviews, and sneak previews about independent soul-music artists as if they were mainstream stars? What if my site could act as a sort of Good Housekeeping Seal for soul musicians who deserved more attention?”
Rizik had the website professionally redesigned so that readers could find anything they were looking for within two or three clicks, and he began selling advertising, he says. He also hired a stable of freelance writers, many of whom were already well-regarded for writing about topics other than music at their day jobs. Rizik says he wanted the tone of the writing to be honest but not artificially provocative.
“Now, we’re at the center of the indy soul movement,” Rizik says. “We don’t pave any roads technologically on this site, but we continue to grow.”
The site has 200,000 page views per month and 19,000 subscribers, a group with an average age of 40. Rizik describes his site’s users as “hardcore,” buying 20 CDs per year.” Facebook was its greatest source of growth in 2011, he says. (As of this writing, SoulTracks has 6,310 Likes on Facebook.)
Rizik continues to be a major player in VC after having achieved success with an online music site. So how does he feel about the current state of venture capitalism in Michigan?
“The rest of the country is moving in Michigan’s direction—smaller funds investing really efficiently,” he says. “I think Michigan funds are very well positioned. Suddenly, the Midwest as a whole looks like a more attractive place to invest.”
He says the fact that Michigan pumps out great technology developed in its universities and elsewhere and has major companies willing to invest in that technology makes Michigan a potential Mecca for venture capital.
“Michigan, in the past, has looked at itself defensively,” Rizik notes. “Part of what’s changing is that we have nothing to be defensive about. We have great technology, great companies, the best engineers in the world…we stand up to anyone else.”
However, Rizik admits Michigan still has a ways to go, especially in terms of overcoming the cultural tendency to associate failure with shame rather than a necessary step along the path to success. He’s pleased, however, that the obsession with who gets credit for success has lessened to the point where increased collaboration is now possible.
But Rizik also sees collaboration—or lack thereof— as one of Detroit’s major challenges.
“Some areas of Detroit are very vibrant, but we have to support those areas on a regional basis—not ending at 8 Mile Road,” he says. [Ed note: For you non-Eminem fans, 8 Mile serves as the line between the city and the suburbs.] “In the short run, there will be parts of town that are just not viable. A lot of people on both sides of 8 Mile are on the wrong side of history and looking at things too provincially. People have to stop being concerned with sacred cows.”