Global Ventures Summit is coming to Luxembourg on November 20th -21st, and with it will come more than 40+ seasoned Silicon Valley Venture Capitalists, looking to find opportunities in the European startup ecosystem.
"Certainly what we’re seeing in Europe - as well as in Asia - is pretty exciting, so we’re excited about being a part of the Luxembourg community, I guess as an anchor point in Europe."
You are coming here to represent GE Ventures in your role as Director of Investing. Tell us a little about yourself, your company, and what you’re hoping to get out of your trip to Luxembourg.
Sure! So a little bit about myself: I’m with GE Ventures, I’ve been on the team for about five years. We invest - just speaking broadly about GE - in a variety of early stage companies. We’ve been a fund for the better part of the last 20 years. We’re funded entirely by General Electric, the American Industrial company, and our focus is really on the next generation of industrial startups. So we care a lot about aerospace and aviation, manufacturing, healthcare and energy. As you know these are very large industries that stand to be disrupted by digital technologies or by innovation in hardware.
We are not especially stage driven or industry driven, we are looking for the next wave of disruption and that may happen in a lot of what we call ‘horizontal technologies’ which are enterprise software ideas which cut across a lot of industry verticals. Maybe they start in agriculture, or maybe they start in diversified engineering, or maybe they start in the tech sector and migrate over to impact other areas in which GE has some business.
We’re interested in finding founders who are highly accomplished and looking to build great teams. We’ve got a relatively large balance sheet, and we’ve been able to do deals as large as $20M+, we’ve also done deals as small as $1M. Right. We’re right now mostly focused on North America, but we do have some investments in Europe and in Israel. We’ve been increasingly interested in what’s happening in the European landscape. The reality is that starting companies is not a Silicon Valley phenomenon anymore, and some of the best and brightest come from all over the world. Certainly what we’re seeing in Europe - as well as in Asia - is pretty exciting, and so we’re excited about being a part of the Luxembourg community, I guess as an anchor point in Europe.
Talking about your balance sheet, you’ve got quite a large budget. What are you hoping to invest in in Luxembourg? Does it depend on who you meet here?
This will be a bit of a learning trip.Right now we’re invested in a couple of companies, they are mostly UK based, and like I said we’ve got a pretty strong presence in Israel. This is an interesting opportunity to get better acquainted with the entrepreneurial ecosystem, find out who’s working on what, and what needs the founders have.
One of the hallmarks of our team is that we tend to bring in people either from previous founding roles, or bring in founders from other companies. We’re interested in where an involvement or an investment from GE could be impactful to the companies trajectory, where it might fill a need on the team, an expertise that’s missing, or it might fill a need to expand geographically where GE’s got a footprint. It’s no secret that GE’s been a big presence in Europe for a long time. The company bought Alstom as a large provider of turbines out of France, and has a substantial presence in Switzerland. So we’ve certainly got the opportunity to do sourcing in Europe, and then when we’re at our best we’re helping companies get outside of their region and expand world wide.
You mentioned turbines just now, sustainability is also something that’s on your mind? How important is that to your concept?
Great question. There’s few people that see a long future ahead for coal and fossil fuels. The reality is that there’s a lot more innovation now happening in the trifecta of wind, solar and energy storage - particularly in energy storage - than there is in ‘conventional’ power generation. So as an energy company as we look to the future there’s bound to be a lot of companies we’re interested in getting behind or helping to support that are part of a sustainable program. The Ecomaginaton program that has been run by GE for a number of years is really designed around outreach to those who are thinking independently of the fossil fuel industry, and it’s kind of cloaked the kind of investments and capital allocation that GE has made over the years.
We’re currently one of the world’s largest providers of wind turbines and wind power, and pretty proud of that capability. It’s certainly a focus of our team to think about ‘greentech’ or ‘cleantech’ technology, whichever moniker you put on it. Europe has led the way in a lot of ways in sustainability, so excited for the opportunity to meet some entrepreneurs who may be interested in that idea.
Luxembourg also has a relatively nascent space agency, and that’s energy of a different sort. Have you thought about moving funds toward space startups?
I’m glad you’ve asked. We’ve spent a lot of time actually thinking about aerospace, and again GE’s got an unusual footprint in this space. We’re one of the world’s largest providers of aeroderivative turbines for jet engines and there is a lot more interest in the space tech sector than there had been 10 years ago. I think SpaceX and a couple of others are largely responsible for that new attention. We’ve spent a lot of time thinking about everything from the launch sector, to communications between satellites, to how is the existence of small cube stacks becomes disruptive to the traditional very large, heavy-weight satellite industry.
We’ve done a very deep dive on what we call ‘downstream geospatial analytics’, which is around startups that are building a capability in recognising images from space at low cost, and in many cases have built out their own constellation of satellites or who are using machine learning and computer vision techniques in order to process what they see in the pixels.
There is a wealth of development bound to happen in downstream geospatial analytics. As we think about market intelligence and market research, being able to observe what’s going on real-time in the physical world is now possible, whereas it might have only been possible in the digital world. That kind of monitoring and tracking is impactful for a business that frankly puts most of its products out in the open environments, whether they be power plants or manufacturing facilities. Most of everything that GE makes is in some way exposed to the environment, and it’s obviously impactful to watch and learn from how those assets are being treated.
If a startup founder wants to come and meet you, how can they impress you? How long will you give them? And how will you pick the right people to listen to?
That is probably one of the toughest questions in operating an investment business. I was an operator myself for a number of years, and part of founding a company - an early solar finance enterprise - and so have been through the process of trying to raise money. It’s hard. I like to think that our team is pretty strong on being able to make connections for entrepreneurs, and we’ll do that whether that’s a potential investment or not. I think we look to the idea of having a captive investment firm as a way to be helpful to founders, whether that’s in the form of dollars, or in the form of useful connections and potentially customers.
I don’t think there’s one right answer to the question of ‘how do you approach an investor’. Having a lot of confidence in the market you’re going after, having a detailed idea of why this is the technology that is ahead of its peers, and usually having some sense of traction ahead of time. I think one of the mistakes that entrepreneurs sometimes make is approaching venture capitalists or the approaching providers of capital a little too early, and trying to fund the company with third party capital in lieu of funding the company with customers. It’s obviously a lot cheaper and a lot less diluted to fund them with customers. So we’re interested in companies that have taken that tack, and have maybe found revenue first before they found VC money. But it all depends, some business models are so stand-out that it’s best to be raising money pre-revenue. I wish there was a single answer to that, but it certainly depends.
Thank you for your time, Eric! We look forward to having you in Luxembourg.
Watch the full video with Eric here:
The Global Ventures Summit was created to connect influencers of the highest growth start-up ecosystems in the world. We enable innovative start-ups to access venture capital professionals, funded technology start-up founders, and policy makers in the freshest tech scenes on the planet. GVSummit is a business unit of Parkpine Capital.