On Friday, May 4, IonE was happy to host a species seldom seen in an environmental center, a venture capitalist!
Paul Matteucci, General Partner at U.S. Venture Partners in Silicon Valley, stopped by to talk to the IonE community about venture capital, and specifically, Paul's interest in the global food market.
Venture capitalists are important players in the whole innovation ecosystem. Most people probably think of them as investing in some young geeks in Silicon Valley, but they operate in many markets and industries and supply an important source of capital for new businesses. Paul, a self-described foodie, has interest rethinking the global industrial food system. He says, "The demographic models point to a peaking of the world's population below 10 billion by 2050. Getting from here to there without massive starvation and environmental damage is a major challenge for governments and businesses. But it is also an enormous opportunity for entrepreneurs, with creative ideas, to build valuable companies that address this issue."
You can understand why he was at IonE. In addition to his common interest in the global food system, he wanted to talk to faculty and graduate students about the kinds of opportunities VCs look to for new investments. It's not a path many in this part of the University always think about as an outlet for their research, so Paul wanted to plant the seed in people's mind of these kinds of investments as a way to scale some of their ideas. He talked about the types of ideas venture capitalists like - for example businesses that have the opportunity to scale. Facebook has 900 million users globally. That's interesting to an investor. A social media network scalable to just your neighborhood, not so much.
Paul also said venture capital investments are all about failure. The well known metric is that only one in 10 investments makes money. Even if that one in 10 makes a LOT of money, a couple more may do OK, and the rest don't return their original investment. And that's just the ones they invest in. There are hundreds of other plans considered and rejected for every investment made. And if you do get funding and fail, that's OK. Entrepreneurs learn from their failures (although you can't fail ALL the time). All investments have some risk. That's why the federal government is a terrible VC (see the fuss about Solyndra). Failure doesn't look good in a political setting.
Stay tuned to hear more about some other activities Paul is working on, collecting innovative ideas from across the globe around the topic of feeding 10 billion people. If you would like to read more about presenting to venture capitalists, these lecture notes from a recent talk by a VC at Stanford are interesting (a little sarcastic but interesting).
Photo courtesy of U.S. Venture Partners