In The Deep End - Dan Sanner

Six months out of college and thousands of miles from home, Alpine Partner Danny Sanner was just 22 years old when he found himself running a company. Below, the Dartmouth grad explains how he navigated such a steep learning curve during his first years with Alpine, the importance of rolling up your sleeves to build trust, and how he sets his team up for success by empowering them early on. 

First, tell me about your path to Alpine.

When I first started at Dartmouth, I was very interested in writing and journalism. But I ended up transitioning to economics, not because I really knew anything about the finance world, but because I had friends going into investment banking and that seemed like the smart path. Then I did an internship on Wall Street—and I hated it. I felt like everything I was allowed to do, I’d already learned in the first two weeks of training, and I didn’t like the company culture. I’ll never forget pulling two all-nighters to proofread a pitchbook the first week after training, and it was never even presented to the client.

Then I had a chance to intern with Graham, who was just starting Alpine, and it was wildly different. This was 20 years ago, working out of his house on Alpine Road in Menlo Park—hence the name. I would show up in shorts and a T-shirt, and I had about a million times more responsibility than I had in banking. I got thrown in the deep end and had to learn to swim very quickly; Graham basically handed me a phone book and said, “Find some companies to invest in.” But I also had plenty of lifelines. He was great about mentorship. Every call with a founder, every company visit—I got to be part of everything, and I just tried to soak it all up like a sponge. I’m highly confident I subtracted rather than added value for quite a while. I made a lot of mistakes. But I tried to never make the same mistake twice, and I learned a ton.

What led to your full-time role, and what were those early days like?

I just fell in love with the work. I was having so much fun. I stayed on part-time through my senior year, sourcing deals. I was the only person in my fraternity house with a fax machine, and my friends gave me a ton of grief. They’d hide it when I went to class—once I found it on the roof! Then when it came time to graduate, all my mentors told me I should take the return offer from the brand-name investment bank, but I knew I’d rather do just about anything than go through a typical two-year analyst program. And I had so much confidence in Graham; I thought if there was any way for Alpine to succeed, he’d find it. So I basically took a long weekend after graduation and got started.

For the first couple of months, I was in a similar role, evaluating opportunities. But we had a company that was really struggling; they sold labels to the U.S. auto industry and were getting crushed by foreign competition. A more senior member of their team went to Michigan to help the company’s CEO, and being the new person, I was sent out to support them both, flying back and forth from San Francisco to their headquarters in Michigan. Within a few months, both the CEO and the other person from Alpine ended up leaving, and when I called Graham, he told me to run the company. We had lots of larger companies in that first fund that were also struggling—back then, we thought the best strategy was to invest in inexpensive businesses, which is the opposite of what we do today —so everyone else had their hands full. Graham said, “If you ever need help, call me. But go figure out how to turn it around.”

Wow—what was that experience like?

It was a baptism by fire. We went through multiple rounds of layoffs; I broke up fights and had my car tires slashed. But it was also an incredible learning experience. I think if one thing served me well, it was humility. I remember in my first staff meeting, I said, “If I were you, I’d have some serious reservations about a 22-year-old CEO who doesn’t know a thing about making labels.” But I promised the team I would be the first one there every morning and the last one to leave, I would always be completely honest with them about how the company was doing, and I was there to learn. I ran presses; I took customer service calls; I went out to try to sell labels because we couldn’t afford a sales team. Once I spent weeks just sprucing up the factory after-hours—I went to Home Depot and got a bunch of equipment, and I’d stay up into the early morning painting the floor and walls while everyone else was at home.

I also spent a lot of time with people one-on-one, asking what I could do to help them or make their jobs easier. So I think even though I really had no idea what I was doing, they saw how hard I was trying and that I really did care, and that went a long way. And eventually, we did turn around the business. We’d been about to go into bankruptcy, and instead we paid off our debts, got investors their money back, and, as a condition of selling, I got the buyer to agree to preserve everyone’s jobs.

Tell me about the transition to a partner role.

We never had titles. There wasn’t a moment when Graham called me into his office and said, “You are anointed partner.” That first fund was so brutal; we were just trying to survive! After we sold the label business, and I did go back in-house to Alpine HQ. I helped build out our Deal Origination team, which looks for investment opportunities—and at the time, evaluated and closed them, as well, though we’re more specialized today.

I’ve been at Alpine ever since, with one exception. About 10 years ago, my wife had the chance to move to Hong Kong with her employer; they were moving their office there from San Francisco. It was a great opportunity, and we wanted to spend some time abroad before we started a family. So we went, with Graham’s full support. We spent about a year and a half there and had a wonderful experience—and once my wife had accomplished what she wanted to, we moved back to the States and I rejoined Alpine.

How do you think about hiring and growing the team?

I think a lot of people see evaluating talent as an art. It’s about whether they clicked with the person. But we try to make it more of a science. We identify specific qualities—like high emotional quotient, will to win, and intellectual horsepower—that we’ve found to be good predictors of success, and then we try to be as data-driven as possible in measuring those attributes. To me, what’s especially cool about that approach is a computer science major can do just as well in our interview process as someone with a traditional finance background. We can teach you accounting pretty easily. What we’re really trying to solve for is how quickly you can accelerate up a learning curve.

Our intern program is another important piece. It allows us to truly evaluate someone, and they get to evaluate us, and our environment and culture. We also think about the relationships we build as career-long, rather than just a few years, which means we can invest in someone very differently. If an intern is going to be a future partner with Alpine, then me working with them, or just having lunch or grabbing coffee, is actually the highest, best use of my time.  It’s harder to maintain all those deep, personal connections as the team gets bigger. That’s something I wrestle with. But it’s a part of the job I absolutely love.

How does Alpine support people once they’ve joined?

We’re big on early empowerment. I was an example of that—I had no experience when Graham entrusted me with running that first business—and I always try to pay it forward. On the Investing team, you should expect to close 5 to 10 deals within your first couple of years. By the second year, you’ll be leading deals of a certain size. That’s much more responsibility than you’d get at another firm, and I think it’s a big reason our retention is so strong. Within the Investing team, for example, we’ve had very little attrition over the years.

Of course, we try to balance all that accountability with a lot of support—again, just like I had. We have traditional manager-managee relationships. But we also have a mentorship program, and we pair you up with a teammate who you can lean on as a thought partner, and I’d venture that analysts here interact with our partners more than at any other private equity firm. All of that is like the scaffolding. It helps people be successful even when they’re being pushed outside of their comfort zone.

What are you looking forward to right now? What do you want to change at Alpine, and what do you want to stay the same?

One priority for us right now is getting better at proactively identifying new industries to pursue. Beyond that, I think it’s continuing to push innovation—whether it’s new product offerings; new, more efficient ways to close deals; you name it. People tend to think innovation is about a great idea suddenly popping into your head, but one thing I really like about Alpine is we understand it’s a replicable process, and we really work to give people the framework and time to innovate.

As far as what stays the same, the culture of the firm is something we’re very protective of. Growth is important—we’re in a highly competitive field, and it’s critical that we have the humility to wake up every day and try to be better than we were the day before. But I’d hate to see that growth come at the cost of continuing to empower people early, or continuing to raise the bar on the caliber of talent we bring in. After 20 years, it still surprises me how consistently we’re able to attract great people, and that has been transformative for us. Our people are the reason the culture is so strong. So I think it’s about bringing in more world-class talent, and accelerating our pace of hiring across both Alpine itself and the portfolio. But within that, one change I do want to see is a more diverse team. This field has not historically been friendly to people from underrepresented backgrounds, and I would love Alpine to have as many women as men, more racial diversity, and more people from different socioeconomic backgrounds.

Overall, what I’m thinking about most these days in terms of the future is how to make myself redundant. My goal is to add as many people to our team as possible who can go out and win a deal, help oversee a company, and eventually drive a successful exit. If I’ve done that, I’ve done my job.