After Spanish conquistador Hernán Cortés landed on the shores of Central America in 1591 with 11 ships and 500 soldiers, he ordered his men to scuttle the vessels before they attacked the Aztecs in their quest for gold. Although his men were exhausted from the voyage and the natives were hostile, sinking the ships left them with two options: fight or die.
Matt Patterson and Cam Doody are employing the same philosophy – minus the carnage – at Brickyard, the Chattanooga-based venture capital firm they co-founded with three former Lamp Post Group partners in 2021. Before they write a check, they insist the founders destroy their metaphorical ships and fully dedicate themselves to their company’s growth at the firm’s 12,000-square-foot facility in downtown Chattanooga.
“We tell them, ‘There’s no Plan B. You’re all in now,’” Patterson explains. “They might be coming from San Francisco or New York or across the world, but our message to them is the same: ‘Burn the ships.’”
If a budding entrepreneur thinks Patterson and Doody are kidding, the black flag that’s hoisted on a pole on the roof of Brickyard’s headquarters should set them straight. The banner, which audaciously declares the pair’s mantra, leaves no room for doubting the fate of those who enter the former Persian rug warehouse: fight or die.
Warfare can be grueling, as Cortés’ soldiers likely learned, and as Brickyard’s founders no doubt discover. To stress this reality, Brickyard has mounted an antique punch clock on a wall inside its main entrance. The firm doesn’t require anyone to punch in and out, but a few founders have used the device to track their time, including one who tallied a staggering 117 hours in a single week.
“That was extreme, but if you come here on a Saturday or a Sunday, or late at night, you’ll find a lot of people working,” Patterson promises.
Patterson and Doody derived “Burn the ships” from the common belief that Cortés incinerated, rather than merely scuttled, his ships. However, they don’t leave their founders standing on unwelcoming sand brandishing only swords and muskets.
Instead, they give them 24-hour access to their vast space, which they repurposed into a luxury liner of sorts with a pool, a fitness center, a sauna, a pickleball court, showers and an emergency snack station, among other amenities. An 11-bedroom founder house across the street coasts in Brickyard’s frothy wake.
Except for several call boxes and private breakout rooms, the rest of Brickyard is an open space populated with rectangular work tables, as well as founders, who currently hail from as close as Chattanooga and as far away as Malta, an island nation in the Mediterranean Sea.
Founders can be identified by their unwavering eyes, most of which will be aimed at their computer screens as their fingers tap a soft but persistent symphony of productivity on their keyboards.
Patterson says isolating the founders in offices and cubicles would have shorted the electric vibe that placing a few dozen high agency pack animals in a single space can generate.
“The beauty of this place is the founders. Your friends and family can’t relate to what you’re going through; only other founders can understand what you’re up against, and this a tribe of world-class individuals who have come here to build together.”
Patterson is speaking from experience. He and Doody co-founded the moving company Bellhops (now Bellhop) with Stephen Vlaho in 2012 after raising an initial $600,000 from Lamp Post Group, the Chattanooga-based investment firm that also funded Ambition, Chattanooga Whiskey, Steam Logistics, Reliance Partners and more before shuttering in 2016. Upon receiving the funds, the trio moved from Birmingham to the Scenic City, where they worked out of Lamp Post’s venture incubator for three years.
Fast forward a decade, and Bellhop earned $80 million in revenue in 2022, the job search website Zippia reports. That same year, Today, Inc., included Bellhop on a list of the fastest-growing private companies in the U.S.
“Part of the Lamp Post deal included moving to Chattanooga and setting up shop in their incubator,” Patterson recalls. “It’s hard to quantify the value you get from putting 50 ambitious founders under one roof, but we saw it when we were building Bellhops. If we’d raised our first round of funding and then stayed where we were with no strong support system, I think we would’ve failed. We were young and naive, and being in that environment really helped us.”
Just as important as the open corral – and 24-hour snack bar – are the amenities Brickyard’s founders don’t include, such as speakers, classes and networking events, Patterson suggests. Those would serve only to sidetrack the founders from their steady march forward, he says.
“We found it difficult to pull away and participate in those things when we were we building Bellhops, so we don’t do prescriptive stuff like that. The point of Brickyard is the lack of distractions. You’re moving from your home to a city where you don’t know anyone and going all-in on your business. You have one thing to do here – to get your company to product-market fit.”
Brickyard’s partners don’t even hover behind their founders’ shoulders, even though their table is just off to the side of the central cluster, Patterson claims. While they’re available for advice and support, they never insist on it, he adds.
“We’re not an incubator, we’re an insulator. We’re available to jam if a founder comes to us, but no one reports to us and we don’t tell anyone how to run their company.”
Brickyard typically provides $200,000 to $400,000 to each founder. Moreover, the firm invests in companies during either the pre-seed or seed stage, which is very early in their life cycle. So, the firm’s hands-off policy suggests its partners believe in them.
Patterson and Doody do personally review each application for funding, which allows them to carefully weigh whether or not their confidence is warranted before writing a check. This vetting begins with their close scrutiny of the founder.
“We look for founders with a lot of grit, hustle and passion for what they’re building,” Patterson explains. “They have to be ferocious and capable of maintaining that level of drive for 10 years.”
Brickyard also focuses their gaze on a specific kind of idea. The firm exclusively invests in early-stage tech startups that are developing software designed to solve a large-scale problem. As with the birth of Bellhops, which originally paired college-age laborers with customers who balked at the cost of traditional moving companies, this model is capital efficient, Patterson explains.
“A capital-intensive business requires real estate, equipment and inventory to grow, but you can start a tech business by writing code, and software has the ability to scale and provide outsized returns.”
Essentially, Brickyard is searching for giant problems and creative solutions; specifically, they’re looking for a founder who’s a tight fit with their market.
“Maybe you’re trying to solve a problem you intimately understand,” Patterson posits. “Maybe it’s not a random idea that popped into your head but an issue you’ve experienced.”
Such is the story of Karla Valdivieso, founder of Shappi, one of the 15 companies currently housed at Brickyard. Through her and her partner’s software, which allows Latin American consumers to obtain delivery of American products by connecting them to travelers returning from the U.S. and renting out the travelers’ luggage space, Valdivieso is disrupting the $358 billion Latin American cross-border logistics market.
“With e-commerce sales rising, traditional couriers lack the capacity or network to deliver products swiftly,” Valdivieso says. “Having lived between Ecuador and the United States, I’ve felt the struggles of international logistics up close. This experience has given me a personal understanding of the shopping and shipping patterns of Latin American residents.”
Valdivieso says her intimate insight in turn fuels her commitment to “crafting new economies that cater to improving international logistics.” In layman’s words, she believes she has a solution to a big problem.
Brickyard agreed and invested in Shappi (whose name is a catchy marriage of the words “shipping” and “happy”) at the seed stage of funding in 2022. Valdivieso and her partner moved to Chattanooga and entered the Brickyard compound that same year.
To date, Shappi has delivered over $3 million in products to 20 cities in Ecuador, as well as laid the foundation for expanding into a new country.
“Moving to Chattanooga has proven to be the best strategic move for Shappi. Not only have we achieved product-market fit, but we’ve also tapped into the invaluable knowledge and support of the Brickyard founders and partners,” Valdivieso reports. “Additionally, our investors have been incredibly supportive, and provided valuable guidance and resources that have propelled our growth and success.”
Likewise, Gumption Technologies (the only member of the Brickhouse collective made up of Chattanoogans) found its genesis in the financing challenges real estate professional Ward Neely experienced as a commercial developer. In a nutshell, the company aims to transform how retail debt capital is sourced in commercial real estate, explains co-founder and CEO Jonathan Dickerson.
“We’re like Tinder, but instead of dating, we match CRE borrowers with lenders to finance development projects like strip malls, grocery stores, franchise stores and restaurants.”
Brickyard wrote Gumption a check when the company was merely a team of three with an idea and welcomed its members to the Brickyard full-time in the third quarter of 2023. Ward, Dickerson and software engineer Tim Coy have since built a platform that’s sourcing financing for more than 10 CRE development firms.
Dickerson credits their progress to not just the money but also the nurturing environment at Brickyard.
“Matt, Cam and the rest of their crew have created a truly special founder residency program that’s been a catalyst for Gumption,” he says. “As former founders themselves, they truly understand the struggles of their portfolio companies, and they’re here to help every step of the way.”
While Shappi, Gumption, and the other founders at Brickyard are on their way, the mission at Brickyard is to help them reach Series A financing, a fancy term for when customers want a company’s product and are beginning to pay for it, Patterson says.
“When you reach Series A, you can receive a significant investment that will help to propel your business much further,” he clarifies.
Repowr, a commercial trailer marketplace headquartered in Chattanooga, was the first Brickyard founder to raise Series A financing. Patterson and Doody invested in the company when it was a team of two; the company now has 22 employees in an office near Chestnut Avenue and recently secured an $8 million Series A investment.
That moment saw the rebirth of an essential component of Chattanooga’s business ecosystem, Patterson says. After Lamp Post closed its checkbook in 2016, there were no local firms investing in founders. This worried Patterson and Doody, as well as former Lamp Post partners Ted Alling, Barry Large and Allan Davis.
“We were getting concerned,” Patterson recalls. “To have a strong ecosystem of founders, you need to invest in them every year. And Chattanooga went several years without seeding new companies. So, we set out to reverse that.”
The name of Patterson and Doody’s firm is a reference to the location where the DNA that exists in their current company first formed: Key-James Brick & Supply – a literal brickyard in Chattanooga.
Key-James incubated Alling, Large and Davis’ company Access America Transport, a third-party provider of transportation and logistics services. The threesome later sold their company to Coyote Logistics, launched Lamp Post and incubated Bellhops.
“Our name is a nod to how all this came to be,” Patterson says as he surveys the firm’s commune of founders, who are in the thick of what he estimates are 80-hour work weeks.
It’s too early to calculate the returns the grind will provide on Brickyard’s investment, and if Patterson is anything more than pragmatic about what the future holds, he’s not saying. Instead, he, Doody and the others are putting their faith in a time-tested business formula that suggests a small portion of their investments will make up the majority of their returns.
“We’re betting on what could be huge outcomes. Many of these won’t return any capital, but we’re banking on one or two of these providing outsized returns that recoup our losses.”
With that in mind, the flag will continue to fly, the punch clock will remain fixed to the wall, and Brickyard’s partners will be brazenly frank as they tell aspiring founders what people commonly believe a Spanish conquistador told his men as they stood at the cusp of great riches: “Burn the ships.”