Davis Smith on Building Cotopaxi, Patient Capital and a Life of Purpose

Davis Smith tells Harry Stebbings that moving from the United States to Latin America as a child shaped his desire to help people. Living in the Dominican Republic, Ecuador and elsewhere sometimes made him feel different from classmates. He believes those experiences built empathy and made him more comfortable thinking differently.

At university, entrepreneur and nonprofit founder Steve Gibson encouraged him to consider entrepreneurship as a way to make a difference. Smith first sold scuba gear on eBay, then traveled to China with a cousin to find pool-table manufacturers. They sold made-to-order tables online with a ten-week lead time, using customer payments to finance early inventory.

Smith says his grandmother lent them about $10,000, a small-business loan provided roughly $25,000, and they used savings and credit cards as well. Stebbings describes the business as reaching $6 million in annual sales. Smith distinguishes being a millionaire on paper from his lived experience: he had married young and soon had a child, which made providing for his family a priority.

Smith says he does not feel he missed out on a conventional youth and has never drunk alcohol; family and purpose have been fulfilling for him. He had long wanted to combine business with social impact, though he says the pool-table company initially had no such impact. It took him around a decade to find a way to join the two.

After six years building the pool-table business, Smith and his cousin attended different business schools and planned their next venture. Inspired partly by Diapers.com, they started a baby-products e-commerce business in Brazil. He says they raised about $4.5 million initially and grew rapidly to roughly 300 employees in 18 months.

The partnership with his cousin eventually deteriorated. Smith says they had different personalities and visions and shared the CEO role, creating painful tension. He recommends choosing a cofounder for the skills needed to solve a specific problem rather than automatically starting with a relative or friend; his account is his own perspective on the relationship.

Smith left Brazil after the company had raised around $40 million in venture capital. He says his cousin ran it for several more years before it failed and does not blame him, noting the difficulty of doing business in Brazil and factors outside his control. The loss of the relationship remained deeply painful for Smith.

While feeling depressed and dissatisfied after leaving, Smith spent about 36 hours thinking and writing on a couch. He conceived Cotopaxi as an outdoor brand that would use its business and profits to fight poverty and encourage other companies to think about their purpose. He presents this as a mission and aspiration, not evidence that a single brand can end poverty.

For Smith, brand begins with values and why a company exists. Stebbings suggests brand is also how it makes customers feel. Smith agrees a good product must come first: a Warby Parker founder advised him that customers would not buy merely because the business did good. He believes Cotopaxi’s mission then gives it distinction in a crowded market.

To find product expertise, Smith searched LinkedIn for designers at outdoor brands he admired. He recruited CJ Whitaker and Sherice Sanguinetti by explaining the mission, offering equity and arranging compensation around the possibility of fundraising. Their factory relationships helped the young brand find manufacturing partners, he says.

Stebbings asks whether Smith’s religious background helped him sell. Smith describes two years as a missionary in Bolivia for the Church of Jesus Christ of Latter-day Saints. He says serving others and forming lasting relationships clarified his purpose and changed how he viewed work and material rewards.

Smith believes many entrepreneurs focus too heavily on fundraising and personal wealth. He recommends starting with purpose, treatment of employees and value created for others. This is his personal philosophy, not a guarantee that a mission-led company will be financially successful.

He has experienced both models: the pool-table business, which he says he later bought back and converted to a benefit corporation, and venture-backed Cotopaxi, which brought faster growth and external pressure. He says both can use profits for poverty-related work but require different choices about control and funding.

Stebbings points out that venture investors need liquidity and may want a sale before a mission-focused founder does. Smith agrees the incentives can diverge, while saying he wants investors to earn good returns. He says Bain Capital bought out many early investors and that revenue had more than tripled since its investment; he does not provide an independently verified return or transaction breakdown.

Smith says he left the CEO role to lead a three-year church mission in Brazil and had sought a long-term investor before leaving. He describes pitching more than 100 investors over roughly six months for capital committed for at least ten years, without success. He speculates that the market and his proposed governance changes may both have contributed.

Cotopaxi’s original fundraising was also difficult: Smith says he pitched 100 investors before Kirsten Green of Forerunner invested. He reports a $3 million seed round at a $7 million pre-money valuation in 2014, before sales. His observation that several lead investors were women is drawn from his experience; it does not establish a general difference in how genders assess purpose.

He advises founders that raising capital often involves repeated rejection and that venture investors seek businesses with unusually large potential. Founders must decide whether to persist, improve the pitch or reconsider timing and financing fit. Stebbings notes that a fund’s finite life creates a real obligation to return capital to its own investors.

Smith believes more patient or permanent capital would help founders seeking to preserve a mission over decades. He says Cotopaxi revenue increased roughly 50% during the year following the start of his unsuccessful search. His assessment that it would have been a good investment is a retrospective opinion, not a realized return.

Asked whether happiness should be a goal, Smith says he finds lasting joy in service and relationships rather than material accumulation. Stebbings questions whether different people find fulfillment in different things. Smith acknowledges differences while describing his own religiously informed view; neither establishes a universal formula for happiness.

Smith says strong investors have helped him make decisions and recruit talent, including by lending credibility and speaking with candidates. He values board members who offer a different perspective when his own people-first instincts need challenge. His praise is based on his experiences with Cotopaxi’s investors.

During the pandemic, Smith says Cotopaxi grew 40% in 2020—its slowest growth year in a decade by his account—and was profitable. Instead of layoffs, executives took substantial pay cuts and staff took 10% cuts for three months and 5% for the rest of the year. He says employees later received bonuses returning what they had given up and more.

He reports that the company gave 3% of revenue to impact work in 2020 and sold face masks, which he says helped the business. Stebbings asks whether staff with families objected to pay cuts while donations continued. Smith says the team believed in the mission and points to the later bonuses; the interview provides his account, not employee testimony or independently audited impact results.

Smith acknowledges doing the right thing and business performance can conflict in the short term. In Brazil, he left work around 5 or 5:30 p.m. to see his children despite an investor’s concern that others would leave too. He says the policy helped attract talented people who wanted time with their families.

Stebbings argues that building a truly generational company may require sacrificing balance. Smith disagrees, saying that over ten years he worked hard while spending time with four children, church and impact work, though not every day was balanced. Cotopaxi was not yet a multibillion-dollar company; his belief that it would become one was a prediction at the time.

On effective giving, Smith prefers partnering with specialist nonprofits in education, health and livelihood training rather than building every program internally. He says an experienced impact leader challenged his early choices and introduced clearer goals, measurement and reporting. His praise for Cotopaxi’s impact report is his own assessment.

The CEO transition reflected both his church calling and board feedback that Cotopaxi could benefit from a leader who had scaled a larger consumer business. Stebbings asks whether Smith could have learned the job himself. Smith says he probably could have, but prioritized finding someone he believed could deliver greater impact.

Instead of hiring a search firm, Smith asked around 100 contacts for recommendations. A former North Face leader suggested Damian Huang, then CEO of Eddie Bauer and formerly at Patagonia. Huang connected with the mission but wanted to be CEO, not merely president; Smith chose him and soon afterward received the church assignment.

Smith admires Patagonia’s commitment to its mission, while saying he would prefer wider employee ownership at Cotopaxi. He says warehouse and retail employees hold equity and hopes the company can preserve its mission while creating wealth for more people. His comments about another company’s ownership are his characterization, not an independent ownership analysis.

On parenting, Smith says he realized he had been more deliberate about company culture than family culture. He and his wife identified family values, made them visible and established a weekly family evening. He illustrates the approach with service activities and a Sunday reading tradition that he says encouraged their children to read.

He believes time with children cannot be replaced by gifts or occasional trips. Becoming a father at 24 was frightening because other people depended on his business, but he says it helped him focus on responsibility. His advice to his younger self is to balance affection with high expectations and constructive guidance.

In the rapid-fire round, Smith says studying the parables of Jesus has been meaningful in his current religious role. He has also become open to a sale or public listing if Cotopaxi’s values can be preserved, after previously wanting it to remain private indefinitely. His example of $500 million in sales and $75–80 million EBITDA is hypothetical, not current financial performance.

He describes public-market volatility as a challenge for consumer brands, using Allbirds as an example while acknowledging uncertainty about its revenue. His comments about valuation and operating performance are his impressions at the time, not an independently verified analysis.

Smith names explorers he admires and says he would want to be remembered for service. He also wishes to spend less time distracted by his phone. His mission in Brazil has been physically and emotionally demanding, he says, especially communicating in Portuguese with young missionaries facing their own challenges and witnessing poverty.

Looking five years ahead, Smith says Cotopaxi remains a lifelong commitment but he does not plan to return as CEO. He hopes to help other leaders and businesses join his efforts to support people living in poverty. That is his personal goal, not a measured claim about the company’s future impact.