#126 The Value-add of Specialist VCs, Engaging with Corporate Partners, Advice to Founders & Aspiring VCs, Defending Your Moat, & More with Grant Allen (SE Ventures)

Why you should listen:

• Discover the role of Specialist VCs in climate change solutions with SE Ventures
• Learn about SE Ventures and its innovative climate and industrial tech investments
• Gain insights on collaboration with large companies and startup wisdom

 
In this episode, Silas Mahner (@silasmahner) & Somil Aggarwal (@somil_agg) speak with Grant Allen, General Partner at SE Ventures. They are a uniquely positioned Specialist VC with a single LP, Schneider Electric. They function like a typical VC, with autonomy from Schneider Electric as a whole, but can also leverage Schneider's vast global network to add value beyond capital and help their portfolio companies to succeed.

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Links:
**Connect with Grant: https://www.linkedin.com/in/grantallen/
**SE Ventures: https://www.seventures.com/home.jsp
**Climate Capital Summit: https://www.climatecapitalsummit.com/
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**Follow CleanTechies on LinkedIn: https://www.linkedin.com/company/clean-techies/
**HMU on Twitter: @silasmahner, @somil_agg

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Transcript

Speaker 2: 0:08

Welcome back to the Clean Techies podcast, where we interview climate tech founders and VCs to discuss all things building and investing to solve the biggest challenge of our generation climate change. Today, silas and I had the chance to speak with Grant Allen from SC Ventures, a specialized VC fund whose only LP is Schneider Electric. Commonly known as a corporate VC, sc Ventures seeks to invest in technology broadly, with a vested interest in those that could result in strategic value for its corporate investor. Grant has spent over 16 years in venture and has invested in both a traditional financial model and now a corporate VC. His perspective on how founders should approach corporate VCs, think about their ideas and navigate the IRA are all must listens for founders looking to raise and VCs hoping to raise a second fund. This episode is a real treat and a look into why corporate VCs have doubled in number from 2021 to 2022. There's a lot to learn here and we hope you enjoy the episode. Let us know your favorite parts when you finish listening. Enjoy the episode.

Speaker 1: 1:14

All right, welcome to the show, Grant. Super excited to have you. How's it going?

Speaker 3: 1:18

So I had to be here. Thanks for having me.

Speaker 1: 1:20

Yeah, we're really, really excited to have you. I think it's going to be a pretty cool conversation, so I guess let's just kick right into things. Give us a quick intro on who you are and what you're doing today, and how did you get here?

Speaker 3: 1:32

Perfect. Well, I'm Grant Allen, one of the general partners of SE Ventures. We're a specialist venture capital fund based in Silicon Valley and we were created in partnership with Schneider Electric. We're a bit over a billion AUM and we're one of the most active investors in the climate software stack, but we also invest in industrial technologies. So I think we're one of the few venture funds out there certainly the largest to be actively investing in both early stage technology driving digitization and decarbonization of legacy industries, both in energy mobility and the broader industrial set. And I can go to more detail on some of these focus areas and themes how we operate in a little bit.

Speaker 1: 2:08

Yeah, absolutely. How did you? I mean, what's your story of how you ended up in this role? I think there's a lot of things to unpack there, but really keen to understand the journey and how you ended up, specifically focused on climate.

Speaker 3: 2:20

Sure, I think everyone has a pretty crazy story to be honest about how they get into venture. Some are very meandering. I guess mine is one of the more boring stories because I went to business school at Penn actually and when I was there I was fortunate to split my summer. I worked at Microsoft and the mobile group. I also worked at a startup in the Philly area and that started happening to be backed by first run capital. So I got to see pretty up close what Josh Kulb, my early renowned investor, was doing to drive value for that particular startup, jingle Networks and I saw very clearly that was what I wanted to do.

Speaker 3: 2:58

I had a long history of wanting to build things and actually was a civil and environmental engineer undergrad at Duke. I saw when I was creating a software company in college, doing a website and back in IT systems, that I could build in a different way. It didn't have to be a physical structure. So I went in a very different direction than that civil engineering path. But what that did is take me through a very, I think, circuitous route of doing management consulting, landing me at Penn, and then I said, hey, I want to do this with startups and particularly software startups.

Speaker 3: 3:32

So I've been in venture now for about 16 years and, to be honest, I've not been doing just climate. I've been doing all sorts of enterprise software, cybersecurity, a lot of wireless incomes and, to be honest, it's all kind of under this large umbrella of climate today, because we think about climate very holistically. It's about driving better outcomes for the planet and for us as humans by getting more out of less. We want to drive resource efficiency and sustainability through everything we do. So, even though I've been investing a lot in robotics and applied AI, I look at a factory. The same way I would look at a larger, broader smart city system and say how can this be enabled by technology and be made to be more efficient and therefore driving more sustainable outcome?

Speaker 3: 4:22

So that's really how I've thought about our thesis at a high level, but it's become much more personal recently because we have had such punctuated climate events, with more volatility in the weather and these very cataclysmic things happening in places like San Francisco, where the sky turns dark red, and I have to tell my kids that there's now five seasons. We have the normal four they know about and we have a fifth season which is fire season, and that makes it a much more personal problem. So I would say it's been a slower path to high conviction around the climate space. But I'm absolutely convicted, as both an investor and as someone who wants to drive a better outcome for the planet, that this is a very clear and present danger that we need to address, and we just happen to be addressing it by technology, and our way to accelerate that technology adoption is pretty unique because we have this massive, very capable company behind us. 100% of the funds into S-U ventures do come from this large multinational company that has been operating in these spaces for about 180 years.

Speaker 1: 5:31

Hey there, quick break to remind any founders or VCs listening. If you are looking for deal flow, seeking to raise funding, looking for partners to help service your needs, or perhaps you're looking for corporate investment partners, feel free to reach out to us through our Slack channel, which can be found in the description. Because we meet a lot of people in this space, we set aside time each week to make introductions to the various people that we encounter. This is something we do free of charge in order to help these incredible companies solving climate change to scale. Looking forward to hearing from you in the Slack channel.

Speaker 2: 6:00

You talk about that relationship with Schneider Electric a little more. Are there any other intricacies? You talked about the majority of that, if not all the capital, coming from it, but is there anything else deeper than that that the audience could learn about? What a fund like that looks like?

Speaker 3: 6:15

Sure, as I mentioned at the beginning, weave Yourselves is a specialist VC fund. There are a lot of groups out there that are calling themselves CVCs. Weave Yourselves is VC plus C, and then you want to appear, smell, sound, act and be as quick as a normal venture capital fund, except that we have this big company behind us. So that puts us in a pretty unique position to add value to the startups that we engage with and who are we are lucky enough to partner with. So really, when you distill the competitive advantage down, it's really three things. We have this unique relationship with Schneider because, yes, 100% of the capital comes from Schneider Electric. That allows us to understand their needs, sort out their white spots in the portfolio. But, more importantly, because we have a dedicated operating partner team, we can actuate the muscles of that parent company in a way that we would not be able to if we were a more distant venture capital fund. So 60% of our investments have a commercial relationship with Schneider. But as far as I know, that's best in class, if not right near the top. Number two, because we have this very nice relationship with Schneider, we have, I would say, unparalleled domain expertise. Not only has the company been operating an energy management and industrial automation for many, many decades, but me and my partners have also been investing in these spaces for a long time.

Speaker 3: 7:43

My partner, varun, came from Qualcomm Ventures. He was the head of the early stage fund there. Amit Shattervedi, who recently joined us from Cisco Investments, he set up their IoT fund. It was at Summit Partners before that and then we have a fourth partner and we just hired in Europe who came from Supernova Invest and covers more of the hardware side. So even though we are a software bias fund, we do cover both. Lastly, we are set up like a modern VC fund and that's, I think, pretty unique among the venture funds that are backed by a corporate or a set of corporations. We are there to drive just strategic value. We are a double bottom line fund. We are measured very much by our IRR and that's also how I compensate it. So the way that we are aligned with our founders introduces even more emphasis on driving the commercial value that we want to push by bringing that startup closer to our parent LP, and that's really powerful.

Speaker 1: 8:42

I'm kind of curious. So I want to talk about the relationship between how SE can help the companies that you guys invest in SE Ventures. But I actually, if you can share, I'd be kind of curious to understand the origin of how SE Ventures came. Was SE saying, hey, we've got all this market share, we want to invest in new companies? Did somebody come and pitch them? How did this happen? What was the reasoning behind setting up SE Ventures?

Speaker 3: 9:10

Yeah, it's an interesting story and I think it's hard to go into the origin of SE Ventures without going to the origin of Schneider Electric, because I just think it's a fascinating company. It was actually founded in 1836, and two brothers came together and bought out this iron foundry and now they make this wide range of energy management and industrial automation equipment and software and it's stuff that a lot of people don't know is actually made by Schneider. So when you open up your load center inside of your house you'll likely see a square D breaker or many of them. That's Schneider Electric. Apc, which is the UPS of power systems and data centers, that's also owned by Schneider Electric. We also as a company have acquired Aviva, which owns OSIsoft, so we're a very active player in industrial automation, digital twins for large factories and really have a lot of hooks into most of the built world. So, like 40% of the buildings in the US have Schneider gear in them.

Speaker 3: 10:04

Still, even with this phenomenal installed base great legacy in buildings, power systems and especially on the demand side, low voltage, final distribution equipment and things like that. They looked at the core R&D and said this is well covered, but we need to do more at the edge. So they actually created a practice called innovation at the edge to start to accelerate things that were not quite close to the core and they created new companies like Alpha Structure, which is a microgrid focused JV with Carlyle Group. They pushed the mobility group out to that and they also created SE Ventures. So this was back in 2017. The first fund was kicked off in 2018.

Speaker 3: 10:43

I was the first outside hire in 2019.

Speaker 3: 10:46

I used to lead the venture group at ABB, one of their competitors and Baroon came in like two weeks after me.

Speaker 3: 10:53

So we got things off the ground and we were working out of a WeWork in Palo Alto.

Speaker 3: 10:56

It was a phenomenal building moment where we're effectively creating our own startup inside of a large corporation, and we were, I think, very thoughtful about creating enough air gapping between us and the parent so that we could have the speed that we wanna see in a traditional venture fund and have that alignment with founders I mentioned earlier but have enough hooks into the parent company so that we can drive really outside of strategic value for the company and in some cases that's augmenting their current offers.

Speaker 3: 11:27

In some cases it's giving them a software solution to make what they already sell better, faster, cheaper, stronger in the case of cybersecurity, safer but there's a lot of ways that we deepen those hooks into the company and find a synergistic outcomes with our startups. And again we have this dedicated team of operating partners who come from the businesses In some cases they ran very large P&Ls for Shinder and they are the folks who build bridges between us and the parent company and they are driving revenue outcomes. They actually do have a revenue target to make sure that we're driving real, serious value for our startups and that's a phenomenal resource for us as investors because we can focus more of our time on our startups.

Speaker 1: 12:14

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Speaker 2: 12:39

And so, especially on the, I appreciate all the insight, especially on the portfolio company support side For the audience. Could you talk a little bit at a high level about you know what is SE Ventures thesis in terms of looking at companies that you may bring into the portfolio?

Speaker 3: 12:54

Sure, I mean, when we started off with Fun One, we wanted to make sure that. You know, I think above all else, we were investing in top-flight companies that would drive outstanding IRR. But we also again have this double bottom line approach where we need to make sure that there is some value coming to our LP and, vice versa, value coming to our startups that goes beyond the check we're writing. So we've actually mapped that out in a lot of detail and then what we call a value delivery framework, so that when we sit down with a startup, we can tell them we'll do everything that a normal VC does. You know, we will add leadership in the boardroom, help you with hiring, tee you up for the next, you know, fundraising and I've been doing this for 16 years. My partners have been doing this for a long time as well, and I almost view that as table stakes. But in this day and age, as a venture investor, where capital is almost a commodity, you need to bring a lot more. So we have this whole other strategic kind of quiver of different value arrows. We can shoot at the problem to say we can do other things that you're not gonna see at other places, and we have this operating team to actually deliver on them. First and foremost, shiner could be a customer. They can buy your software, they could be a channel. You know, frankly, they could just bless the technology, test it, and then there's a halo effect just by Shiner Electric and his venture arm coming in and investing in the company. So there's a lot of different ways that we can come in and alter the trajectory of these startups, which is very, very impactful. So you know, a dollar of revenue, even in this more compressed multiple environment, is gonna drive anywhere from, you know, 10 to $15 in you know, appreciated equity. So that's what we wanna do.

Speaker 3: 14:34

And my very first deal, which was interesting, and we put in $2.5 million to a small knowledge management company up in Canada and it was about six months later we delivered a $7 million three-year revenue contract with them and that's being renewed as we speak. So that was a really wonderful one-two punch. That's what we aspire to. I can't promise that's gonna occur in every deal but again, 60% of our companies have a commercial relationship with Shiner Electric, which is a number we wanna keep high. And that does mean during diligence we're gonna make sure not only that, it's a wonderful company that we have conviction on and wanna back and see, you know, outsize to return potential, but also that there is a nice bridge to our LP. Because we want there to be a bridge, we want the LP to get excited about the company. We want them to adopt it, take it to market and come around and drive that commercial acceleration that we have predicated our investment upon.

Speaker 2: 15:27

And you know you brought up something that I find really interesting is the alignment between your companies and Shiner Electric. Is there a process, especially as a specialized VC, that you see yourself going through when companies approach you about explaining the relationship between their IP and their company and a potential customer partnership with you know this anchor LP, this you know, one that's making up the entire portfolio. Do you often have to explain how that dynamic works to founders?

Speaker 3: 15:54

I think we're explaining it less and less because I think the CVC and these kind of new evolved CVC 2.0 or hybrid models like we have, have become more well understood and again, I think there's less trepidation about coming into a context where it might not be as clear cut as a truly 100% purely financially focused VC. But again, we try to explain. You know there's some additional explanation required, but you're gonna get all this additional value. So bear with us and good. Getting to first principles, we explain that when we sit down with the founder, where they're founder first, so when they share with us, you know financials and things like that that stays within the Ventures team. You know if there's things they want to be shared with the broader Shiner, we'll kick that over because we're running in parallel a partnership conversation and that's exactly why we have these operating partners involved, because it allows us to dual track the engagement with a startup.

Speaker 3: 16:51

I can put on my investor hat, because that's what I do best, and we can have an operating partner who's really good about understanding Shiner. They can be the Sherpa, they can have the secret handshake back in France to get things done that are really wonderful for these startups, and they've all come from within Shiner. They know Shiner better than I probably ever will. So it's a really nice combo to have us both engage and I think you know we've gotten pretty good, not only showcasing through past engagements that this is a net value add for the startups, but it's not gonna be some cumbersome, long journey. You know, I think we want to be, you know, quick in our decisions, get to know as if it's a no, quickly and not deliberate.

Speaker 3: 17:32

But that's, I think, forcing us also to, earlier in our diligence process, sit down with those OPs, with the founders, and map out in that value delivery framework. You know what's the story. You know, is Shiner gonna be, you know, a channel partner which Shiner, in five years that this goes really well wanna acquire you. And if they do, then we can structure in such a way where we will make sure there is no way that you will be prohibited from working with Siemens, rockwell, jci, all these competitors, and we keep a Chinese law in place. So we wanna make sure with founders they're very clear that we are there to advocate for them, but also that they have this phenomenal option value in turning on this great corporate machine that will drive dollars to them. I think that's the important punchline.

Speaker 2: 18:20

Yeah, that definitely makes sense. I think it's really interesting to see how you can put that. In the beginning of the conversation it's almost sort of assumed, whereas maybe in more traditional style there's some questions about okay, how can you be a value? Where are you gonna take me, where are you gonna take this company? So it's really cool to see how, even though it might be a barrier, it's also an opportunity to really lay out a common ground of how you can be on the same page in terms of growth for these companies.

Speaker 3: 18:45

it seems like yeah, and I'm fully advocating for transparency. At the beginning, let's make the Christmas list on both sides what do you wanna achieve out of the relationship? Make sure there's a there there, See what the overlap is and make a practical and implementable plan that we can then work on with that operating partner to deliver on. And in one case very recently, we've set up separate cadence calls with that operating partner to ensure that there's regular touch points that go beyond my conversations as an investor, Because I'll be attending board meetings. I'll care about financing and ESOP refreshes and all this stuff that we care about as VCs, but to have this other person come in who really can be an air traffic controller across all the various China electric conversations, it's super helpful, not only for that entrepreneur but for me also as an investor.

Speaker 2: 19:39

Definitely and, I think, inherent in this conversation. I wanna move on to a similar topic within this. A lot of the way that these founders are coming at you seems to be a little bit more with a more mature approach and be more mature product and understanding of where they fit into the entire ecosystem. That obviously would correlate with larger check size and I think that shows in 2023,. Most of your checks were sort of, from what we understand, between the 10 and $50 million range, and so you could call these, you know, later stage, at least from what's reported on Pitchbook. This comes at a time where I think you've seen a dramatic drop off in later stage funding in terms of, you know, after the pre-seed and seed funding, cpc reported a massive drop off. So just at a high level, why are you investing at this check size and how are you thinking about the outcomes of these investments?

Speaker 3: 20:28

Well, coming out of fund one, I think one of the learnings was, you know, from a portfolio construction perspective, it's going to be very challenged to make three and $5 million investments. There is not an unlimited number of investors and you know these are going to have hold times of four to eight, if not longer number of years. So when we come in we want to make sure that you know we're putting meaningful dollars to work, which, for a 500 million Euro fund, which is what our fund too is we want that to be a first bite that's no smaller than five, but ideally an eight to 12 or maybe eight to 15 first check. So if you look at a deal we just did in Australia, plotlogic, which we co-led with Galvanize, that was a $28 million financing. We were co-leads with a check that was, you know, not quite 10, but I think that's very comfortable for us. You know, series B style investment where we come in, you know we're going to take, at the very least, you know, a board observer or two, but ideally a full board seat, and want this to silo-sically look like it would at any other venture fund. So again, you know we want to be that VC plus C model and that's also going to reflect itself in the check sizes we're looking to write. And that's the new model.

Speaker 3: 21:48

A lot of other corporates, I think, are much more comfortable doing tackle and investments of, you know, throwing in two, three, four million dollars, you know, taking no information rights, maybe showing up with a board observer. We just find that limits our ability to add the value that we want to bring and get the operating partners involved and really signal to Shinder that, hey, this is a VIP startup. We all need to be, you know, all hands on deck, assist them, showcase them to the board, to customers, and show that they are a valued partner. And that means we want to have real skin in the game. And that's another reason we feel, I think pretty strongly that we need to be doing bigger checks, more conviction, and if we can't get there then we'll move on. But that's going to be more of the style going forward.

Speaker 1: 22:34

Hey there, thanks for listening to this episode. If you made it this far, it's likely that you're enjoying the show, so I wanted to ask your help. If you're enjoying it, please give us a review on Apple podcasts and share with somebody in the same industry who might find this interesting. And if you're interested in getting summaries of these episodes, go subscribe to our newsletter that comes out on LinkedIn and Substack Links can be found in the description. Thanks for your help in growing through each of this show.

Speaker 1: 22:55

Kind of curious to understand if you're usually writing those checks. Where do the technology usually have to be? Where does it have to be to be something that you guys will even consider, because you can't write a big check for a smaller company. If they're really early, they don't have things properly set up. I just want to understand this relationship of the milestones for the startups, but also from the perspective of the hardware, because it's a lot of these companies that really have a need or a lack of expertise on how to go through the pilot project, et cetera. And just knowing that Schneider has a lot of talent to pull from, et cetera, we're keen to understand this part of the process.

Speaker 3: 23:37

Yeah Well, we certainly prefer companies that are into the revenue stage and ideally have two, three, four if not more in revenue and ideally recurring revenue with good margin profile. When it comes to hardware, we are okay taking that's where there is hardware, but ideally that hardware is going to be coupled with a piece of software. So we do like what we call dumb hardware, something that's an off the shelf, say, sensor, where it's being interpreted by a more sophisticated layer of AI to drive an insight or something sort of outcome for customers. So you'll see within our software biased outlook or model that probably 60 to 70% of the companies will be pure software and then you might see 30% have some sort of combination and then there'll be a balance, very small balance. That would be a pure hardware solution.

Speaker 3: 24:36

Now one of those companies fabricated is actually one of my most favorite companies because they're making a 3D printer that they're in the process of scaling up. That's doing very fine featured copper production, really at the atomic scale, and they just attracted a large following investment from NEA and it's going really well. And even though there is software to optimize the printing process, I look at that and that's pretty much a pure hardware solution. But I pointed out because when we looked at that company, the fundamental production process had been proven out at a smaller form printer and we were just talking about scaling that up to a larger build plate. So there wasn't a major technological or scientific or material science breakthrough that we had to underwrite. They had proven out the printing process.

Speaker 3: 25:29

We just had to make sure that we could do that again across a larger build plate, which would mean we could go after a wider set of printed products. So I think that was a really nice one. We came in alongside TDK Ventures and Intel Capital and again I view it as clearly hardware but less risk than you might see for one of these larger decarbonization companies that are doing like DAC or carbon sequestration or maybe like fundamentally developing a hydrogen electrolyzer that's going to be like TRL3 or something like that and that's, I think, a good place for us to play. We want to again drive that attach and drive the acceleration with Schneider Electric and if we're taking this, something that is too amorphous, too early, just napkinware or aspirational they don't know what to do with it that will delay and ultimately limit our ability to drive the value that we're telling the entrepreneur that we can drive.

Speaker 1: 26:31

Yeah, that's quite interesting. I can see why that would be very important for them to do. One thing I'm curious about is, given that Schneider is very, very large, they've got so many different companies that are doing a lot of different things and you want to be able to help your portfolio company and your investments to drive revenue early and to get things going how do you actually manage operating and kind of collaborating with all of these different companies and people and ensuring that it's a big company right, and there's probably, to an extent, there's always going to be some politics like how do you because if you're infusing new innovation into everything, things are being disrupted to an extent how do you actually manage such a large kind of ecosystem and get your investments and get your companies into those to actually do something great with them?

Speaker 3: 27:25

So that's one of the primary reasons we have this business development or operating partner team in place because we need to have that platform side of our practice. And if you look at big funds like an Insight Partners or a Sapphire, they have dedicated business development functions. They don't talk about them, they're not as visible in the websites, but they're very much there. And if you talk to portfolio companies at these places, they're getting terrific value from these shops. I was just talking with the founder that it got money from scale venture partners and scale basically loaned them a CFO. So I think you're seeing more of this stuff happen where founders are going to their backers are saying, you know, can I have some help? I need to do X, y and Z, and you know they're getting that value from their VCs. So when we're trying to orchestrate this very complex collaboration with, as you know, a very large, you know, international company, it does get complex, but that's why we have these folks who can triage it quickly, determine, you know, if there's six different potential ways of working with China, we're going to focus on the two or three that are going to actually move the needle and make sure that we're being efficient with the founder's time.

Speaker 3: 28:38

One thing we did really, I think, really well recently was get nine of our companies in front of the board of directors of all of China Electric.

Speaker 3: 28:46

So this is not just the XCOM, it's the broader board.

Speaker 3: 28:49

And we had speed dating sessions that were set up next to where the Rosewood, so the board could go around in small pods and meet with the founders, get a download on the company and have five minutes to really download what was going on, and it kicked off all sorts of wonderful you know follow ups and introductions and pieces of feedback.

Speaker 3: 29:07

So that allows us not only to create more opportunities but also to say, hey, you know, of all the things we could be doing, let's really focus on one where we have, you know, a senior leader who's really convicted and wants to drive value. So in the case of this mining automation company, plotlogic, we just invested in in Australia, we had the CEO of Viva who met with them and said this is great, you know, let's definitely have a follow up. And now we have an email intro between the CEO of Viva and the CEO of PlotLogic and they're going to drive a follow up conversation. Now, of course, it has to be tracked to make sure it's actionable and will hopefully drive to a great business outcome. But it's those seeds of conversation that we're hoping to introduce and something we care a lot about.

Speaker 1: 29:51

Yeah, I think, I think this is. I'm just very fascinated by the idea of how you manage collaboration and organization, especially when you're around the world. Right, you've got different time zones. Not everybody can be aware of everybody's problems. But just to clarify one thing is are there people kind of situated and seated in different parts of the company and on a Schneider side that understand, broadly speaking, what their problems and challenges are, that then have a direct tie to work with you? Or do you just happen to have a kind of a bench of people who have certain skill sets, who you know know enough people in the company to go and poke around and say, hey, I think you might have this problem. Can this startup that we just invested in help you? Like, how does Schneider actually make sure that they're integrated there to then operate with you? And is there just one set of kind of ghost leadership inside of the company that knows what's going on?

Speaker 3: 30:41

No, no, it's, it's. It's much more formulaic than that. We, you know, have ultimate sponsorship with both the chief innovation officer of the company and the chief financial officer, so they're kind of the ones who've ultimately overseeing the billion AOM that has gone into SQ Ventures. But we do have a very methodical way that we parse all of Schneider. We do it through a survey that we do every year to understand where the needs are. But again, I don't want to give the impression that we're just kind of going and getting a shopping list for the company.

Speaker 3: 31:16

We're always thinking about what's available in the market. Where would we want to be placing our dollars if we were, you know, 100% on our own? And there's like this then overlap between what's investable and going to drive great IRR and what would be, I think, high priority items for the company, because that's going to drive greater attach and interest from the company, which means we have a higher hit rate or accelerating the start if we engage with. So it's kind of have to be attuned to it for a number of different reasons. But we go through each line of business, we talk about what their priorities are and we do come up with a master map every year of where we see the top priorities, you know, where we see top areas for execution, which are opportunistic areas and which are going to be things that are maybe on the horizon three a little further up. That again we parse by what we see as investable areas and also where there's even deal flow, because something might be a very high interest area for our parent LP but there just aren't good startups to go after and so you can kind of deprioritize those. But there's a lot of back and forth during that strategic planning phase. And then we now have this concept of the innovation champion, where we have appointed senior people within the company who work with those operating partners and they catch the technology and they oversee it and when they commit to driving revenue, they're actually on the hook to deliver, and that's that's something that we're implementing now. So, yes, it does get chaotic because it's a big company, but we're bringing some order to that and making sure that we have folks who are in the seats first on startups, that we care about their up to speed in the technology, we stitch them into the companies in our pipeline early and often and we're making sure that there's as high of a hit rate as possible working with their lines of business.

Speaker 2: 33:06

And so I wanted to ask a little bit about the thing that you talked about, which is not necessarily only looking at the field of technologies that might benefit, you know, the people that you work with but also just developing those market and mind maps and and looking at the market as a whole. The very obvious next question is is to really dive deep into how you're seeing the market and what you're paying attention to. How are you looking at trends and energy and industrial automation, and what are certain areas of the market that you're really bullish on?

Speaker 3: 33:35

It's a great question because we do cover a lot of investable service area. You know you could have a fun, just for you know energy management software and you know carbon accounting, or pick your, pick your battles. Yeah, I think we feel pretty I say pretty committed to the industrial side of the house the moment. We're doing, you know, deep dive on discrete automation. We just invested in a company that's doing some quality inspection using a synchronized industrial arm and lighting array that services defects in a very, I think very impactful way. I mentioned the mining automation company already, which also is on the industrial side of the house, because that's a company that the mining segment of Shinder at plus of Eva would help drive forward. But about two thirds of our practice will be on the energy management slash, climate side and within that broader category.

Speaker 3: 34:35

Yeah, I'm getting back to revisiting mobility. You know that's an area I've been a very, I think, active investor in, invested in free wire and nature on energy In charge bunch of companies at ABB. You know here we've invested in pro Terra, volta, eiq, mobility, which was bought by next era. You know we've invested in some other things that are a bit more tangential, but we're revisiting that to look at charging software and looking at fleet management and roaming plans and the ways that you can set up CNI charging systems where you may not have fully available communications and more the ability to authenticate a financial transaction and things like that. So there's a whole body of work that I'm leading around that mobility space. I think the second area that I'm pretty intrigued by right now is just all the ways that the IRA and government driven spending are going to be driving electrification of residential homes, so single family homes but getting into multifamily dwellings and the space. I think this comes as no surprise that you know we have to upgrade a lot of our infrastructure and you have 40% of CO2 that's residing in the built environment. We're trying to figure out how, both for retrofits and new builds, some companies we work with and back, but also our parents company, can come in and accelerate things.

Speaker 3: 36:04

Right now I'm having check ins with this whole ecosystem of startups that are trying to produce the friction for upgrades of residential homes and they're trying to make getting in a heat pump or getting an EV charger on the side of your home Very easy. We had a great win with Q Merit, which we invested in and sold for a very, very good return and that was focused on EV chargers. There's other companies that are now starting inside the home and they want to come out to doing other things. So you look at, you know, sealed elephant Helio and then looking at, you know, starting with heat pumps and insulation and bringing comfort to homeowners and starting to do other things. You know waters.

Speaker 3: 36:53

You know water heaters driven by heat pumps, looking at upgrades of load centers and things like that. And we're going to see convergence. I'm still trying to figure out exactly at what point the solar installers try to get into it. Or you know, some of these companies that are below the roof line start to resemble a sun run in their models. But clearly there are a lot of dollars, a lot of startups trying to attack the space and make the even just the incentive process and attacking those instead of dollars to the IRA easier so that contractors and homeowners can both benefit.

Speaker 2: 37:30

So I think this is this is something that you brought up, something that I think has been really relevant, which is how our founders interacting and navigating the IRA right as as many great policies has come out, there's also been, I think, a trend of advice to build your business model outside of the IRA's policies. I was wondering, like, how do you feel about that advice that that founder should be building outside of, or building sort of a government independent or subsidy independent business model? Do you have a take on that, or is that sort of like also weighing in on your thought process?

Speaker 3: 38:04

I think most VCs, if they were being truthful, would say we would very much prefer products that can be sold profitably at scale without a green price premium. So you know, we would all then be very cautious about backing companies that are supported by subsidies that could be short term in nature. With the IRA, I think it is sufficiently buoyed in long term in nature that it can be relied upon. So that's, I mean, it's just so massive and such a commonly create upon good thing that you know that should be assumed to be very likely part of a go forward business plan. And other incentives that might exist at a municipal or state level, I think are a little bit more challenged.

Speaker 3: 38:46

I've seen companies that are predicated entirely upon things happening in New York City and I think that's just really hard to underwrite. To be honest, you know, given my many years in venture, I've always said you know this, this has got to stand on its own two feet. I think some VCs are breaking that rule and saying, okay, you know, there's just such massive government involvement that I can basically bank just on that. But for us, I think we still want to stick with first principles and make sure that it's on its own a very sound business model.

Speaker 2: 39:20

I've heard from a lot of founders, especially as of recent. For example, one of the spaces you talked about, residential energy. You know, I think, a residential solar, and you know those types of home in upgrades for energy, there's this idea that, yes, the IRA is set up a cycle that is allowed for the current generation of companies to benefit from these. You know, right, you know all these different incentives, but at the same time, it's going to catalyze and change the consumer behavior as well as an entire spending cycle that'll be able to carry forward this generation of companies and the next generation of companies Is that. Do you feel as though people you know, founders, are pretty aware of how are they well thought out and how they're thinking about that, or is a big part of your responsibility advising them on how you think they can be successful in that?

Speaker 3: 40:09

It's a good question. I think there is a little bit of naivete on the part of founders just seeing the near term low hanging fruit and saying, hey, if we can unlock a $3,000 discount for one of our products, you know that's going to grease the skids and drive the volume for our products, but it's just. It's tough for me to believe that. You know that's not going to also increase competition massively because you know it's. It's a very fluid capital market. You know, if there is a startup that is down to financial hack for the next one to two years, I guarantee you there's going to be five other startups coming out of Stanford, jits be who also are coming after the same financial hack.

Speaker 3: 40:48

So you know, if you look at something that's more of a durable and defensible mode and I just I really encourage founders to think a little bit more deeply about what that long term defensibility is going to be and articulate it with their ICP and, you know, getting into more of the nuance of. You know, if things go up, go down, you know that's great, that's cream on top, you know. But let's assume that it's going to be more challenged to access these dollars. You might have more hoops to jump through. So if you're going to be getting out a piece of your tech to truly automate that and create more of a data mode or something else to keep the competitors at bay, you might have to discount that in your long term plan.

Speaker 1: 41:26

I think I do think it's fascinating to see how that's going to play out, because I also, when people, when PR agencies, reach out to us to have them on the show and there's a lot, of, a lot of them that are in this space is like okay, well, it's just another one of these, right. It's like, okay, what's what makes you different, right? So usually vet them before we bring on the show. I want to talk about with the time we have left. I want to talk about your advice to founders. I think that this is something you can probably offer a lot of insight. So, just across the topics of fundraising, go to market strategy, finding product, market fit, talent, and then you can place any of those things across there. What is your advice to founders?

Speaker 3: 42:02

For us specifically. I think we get way too many pitches where they come in and are not attuned to our unique model, so I highly encourage them to do just a bit of research. We just revamped our website. You can go in there and read about our model but, like, come in with a couple ideas on how we can engage with you. I mean the Royal Wii of our backing LP and how your product or service, whatever you're building, could drive value with our broader ecosystem. And I think being clear about that value problem and potential connect areas is a really good way to start a conversation. Of course, our operating partners will also spin up ideas and hopefully there's harmony between those lists, but I think that's really important to come into a first meeting with the second one is just, you know, be clear in what your, your mouse trap is, your differentiation, your dependency and the key metrics that you're going to use to measure that in your early traction.

Speaker 3: 43:02

And I guess the third thing is, in this era, you know there's so much focus from investors on conservation of cash, getting to cut cash flow, break even, that you know you want to come in with a very clear sense of you know your cat and your ICP and making sure that you can attack that segment very efficiently, burn minimal dollars to test quickly, fail quickly and get to what I would say is, you know, product market thick as quickly as possible. Now, that's less relevant, you know, for the bigger later stage checks we do, because generally it's, after all, this has already been kind of locked in. You know, we know that there is PMF and we, you know, know that there are real metrics we can rely upon. But we're still engaging with series A companies that have not fully articulated. You know what exactly they're doing and why it's different from, as you noted, the many other companies that are chasing some new software spin in the broader climate space and it's a very active, very active space today.

Speaker 2: 44:03

Yeah, what is specifically on that? I mean, I think there's been sort of this booing interest ever since. You know the evolution of seed funding, of course, understanding the benefits of investing at the early stage and so there's been a lot of resources also understand okay, you know how to get to product market fit, how to find your first customer, how to do this, just as much as there's a dearth of capital after you know the seed and series A, I think there's also a little bit of a dearth of understanding and tutelage and knowledge Past. You know the product market fit stage.

Speaker 2: 44:31

What advice can you give to founders who have achieved product market fit? You know they probably already have. You know a number of. You know a couple of VCs on their board and they're getting a lot of great advice. But just from your own perspective, you know to improve, honestly, the quality of companies that you hope to see, what are some advice you can give to founders when they've gotten product market fit, when it looks like they've gotten product market fit about how to scale. Is that a high level?

Speaker 3: 44:54

Well, I'm, of course, a little biased in saying this, but I would say don't be scared of working with a large company and just starting to run a couple of tests. Some of them do not want to run pilots. You know, we met with a company yesterday that was already at a stage where they said we don't do pilots, we just do one year. You know licenses. And yeah, I said, okay, that's fine, but I want to make sure we can dangle this in front of a number of different business units. See which bite and it might end up that you know you have two tests that fail but two or three that become very significant high ACV customers.

Speaker 3: 45:26

So I think, just sitting down having that conversation and this is not specific to Schneider Electric, I mean just any of these big companies but I think we just fundamentally believe as a firm that there is a huge unlock to come from engaging with these larger incumbent companies.

Speaker 3: 45:43

Having come from Cisco and Qualcomm and ABB, you know we see that there is value and massive value potentially if you do it right.

Speaker 3: 45:52

So just sitting down and having that conversation about how you could white label your product, tweak the pricing, leverage the channel, and we're doing a lot of that with our company, cojo, which is doing procurement for construction materials, and because they're selling ultimately to the GC who's out in the field. You know we are not, as an OEM, going to be a huge buyer, but what we can do is go to our distributors in the middle and say, please adopt this software and also push it down to your field engineers and GCs, because the software is really really good and drives a lot of efficiency in the procurement process and that greases the channel and that drives adoption. And we can also have them showcase their software at, for instance, a trade show event and things that we can do from the top. So it ends up being this really nice, you know, top, top down, bottom up, squeeze of some of those folks, which ultimately drives better data and better value for everyone in the ecosystem and it's really making these startups happy. So again, feedback have that conversation, have it early, don't be shy.

Speaker 1: 46:55

Seems like a little bit of an unfair advantage. To be honest, I feel like everybody's going to want to check from SE Ventures. Now I wanted to. I kind of want to understand when you talked about don't be afraid to talk to the big companies. I can imagine that a lot of the founders especially probably a lot of them are in many cases, younger people not necessarily having as much career experience in probably a lot of cases, how can you? Are there any tips you have on how they can identify when the corporate or the big incumbent they're talking to is, you know, actually has the best interest in mind versus just trying to get one up on them? Is there any tips on how they can navigate that? Because I can assume like if I put myself in their shoes, being somebody going up against somebody who's got 30 years experience, there's just like a huge gap between their knowledge and yours and you're just afraid sometimes. So do you have advice on how to navigate that?

Speaker 3: 47:52

And just to be specific about the question you think they would be afraid because they might think there's some sort of ill intent or what?

Speaker 1: 47:59

Yeah, because I think that, especially if you go as a climate founder and you're going up against let's say you're trying to solve something in the oil gas phase, or you have something that the oil gas companies are interested in, they want to invest or they want to do something, how can you, as a founder, understand and go into that meeting to truly find out? Is this the right thing versus just not taking the meeting at all because you don't know what to ask?

Speaker 3: 48:22

It's a good question If there are some fundamental kind of screening criteria you could use and I would recommend just understanding from the group you're talking to how are you set up? Are you aligned, so if I win, you win? Or are you kind of there on behalf of the group strategy arm or the group's M&A arm or something like that? Because I think that does drive a lot of differentiation in how these corporate aligned venture groups work. So I think understanding that structure and how they're set up is a big thing. Just ask them do you get carry If your deal as a blockbuster return, does that have a meaningful financial impact for you? Because if it does, I can guarantee the behavior is going to be different, I think. Secondly, you can ask do you have dedicated resources? Who are there even after the check is written, to drive, follow through, to drive that connection and create connected tissue with the mothership? And who are these people? What's their relationship? Have they come out of the mothership or have they come from another kind of startup business development function?

Speaker 3: 49:33

Our philosophy is that we want these people to have come ideally from the parent company, because they know it really well, they know what makes it tick, they have great relationships because we're a global firm and our parent company is a global corporation. So it does take a lot of time to get to know the company and what is behind its central nervous system. So that's why our investment team we're all from outside of the company. The operating partner team is all from inside the company, meaning they were formerly at Shiner Electric. We brought them over to the Ventures team. So I think those are two important screening criteria to go through upfront.

Speaker 3: 50:11

But, just like with anything, you need to know you're not getting money from a firm and I say this about any venture capital firm.

Speaker 3: 50:17

You're getting money really from a person who's going to be involved with you and they're going to sit on your board and they're going to be your hopefully trusted advisor. And you have to get to know that person to make sure you trust that person. And I think once you get comfortable with that person, definitely talk to their former companies they backed in the past. Look at companies they've listed on LinkedIn. If they say, hey, I'm an investor and you check in with the founder and the founder is like who is this guy? You know right there that they're just lobbying checks over the wall. But I mean, we're very hands on convicted investors and I think if you talk to our founders, even the ones that don't have a strong commercial relationship with Shiner Electric, they'll say that we do go to bat for them, we do hustle, and it's something that, when you get a check from us, you're going to get the full engagement of Varun, amit, julian and Grant and the rest of our 25 person team.

Speaker 2: 51:12

And really quickly, just to round off the getting the great advice from you know all the different ways in which people can approach the space. I wanted to turn it over to the young sort of investment professional side. Looking of course now this is climate investing of course in the past. You know, three, three or two to three years Now is called the clean tech 2.0. It's a pretty new space. A lot of new funds popping out. It's a lot of opportunity for people to get involved but still seemingly, you know, like you said, people can meander their way in. People may be pretty intentional about it. It is very confusing. So do you have any general, like big picture advice about how people can get into the space and maybe some things that they should think about that are different than when you started your journey?

Speaker 3: 51:55

Absolutely. It's a great thing that climate is having its moment and you have things like, you know, the new door school of sustainability, that it's attracting a lot of focus right down the road from us, and a lot of people are graduating from that school saying, hey, we want to get into an operating role with the climate startup or go into venture. My biggest advice, though, is start to test and get focused as quickly as possible. That might be counter to advice they get from others who, you know, want to say at a more general level, but, yeah, I have the most interesting conversations with folks who have really started their studies you know, to maybe three at most areas and really gotten down to a thesis on, say, you know, carbon accounting, or, you know, optimization of HVAC systems in commercial buildings and something that seems pretty specific, but I think that sets them up for good conversations both with startups and also with investors, because, the end of the day, you know, while we have these these at a very high macro level about where dollars will be flowing, where we might want to take bets, we're still having to make bets on companies that are very, very tightly focused. So I just like having people like me who are just insanely curious. Just burrow, burrow, burrow, try to understand a space very, very well and come out with a unique tick. And I think that's what certainly impresses us with our hiring process.

Speaker 3: 53:20

We just brought on a principal who's joining us from another financial VC up in the city and you know this individual had done a lot of work in AI. They had also been out there angel investing when they were at Stanford GSB and I think that's a good segue into the number two piece of advice I give people, which is just get out there and do it. You know, whether it's joining a startup or building something in your dorm room or like writing checks. They always say, well, I don't have the money to write an angel check, well, it doesn't matter. You know, do a 1K or a 5K check off angel list, or just find a smart friend who seems to have a good idea Maybe they know how to code and you don't but help them with their marketing plan or their financial model and say, take a small sliver of advisory shares, just get in early and, you know, get your feet wet. I think that is a really good way to both help you understand where in the value stack you want to play personally, because being an investor is not for everybody.

Speaker 3: 54:13

You know some of them. They want to come out and say, hey, I want to be focused on just one company. You know I prefer the role as the coach and then looking at a full team kind of I went to Duke undergrad and coach K is like I want, I want to be the guy guiding the, guiding the talent, knowing that I'm never going to go to the NBA and make the big bucks in the NBA. But you know, I like that tutelage and seeing the team succeed and helping them be the best versions of themselves. That's important for me personally and it's a role I think I play pretty well.

Speaker 3: 54:43

Other people want to be out there. They want to be the star on the court and build things and that's I think that's very, very okay and I think you know that's where you'll probably get even more impact and more, you know, kind of personal fulfillment. If you're focused on this one thing and if you have that one idea of like bio means go after it. But again, being focused and get out there and just start doing. I think those are the two big things that help people.

Speaker 2: 55:07

I like that. I like that analogy. I am a big fan of basketball myself and I know the adage that college coaches don't always make the best NBA coaches, and I think there's something, something to that there. Investment fashion Not everyone's perfect for the profession, but it takes a very specialized skillset to to do it. And, you know, sometimes VCs don't make the best founders, sometimes founders don't make the best VCs, and I think you know we've seen many times that's true in basketball and college coaching too.

Speaker 2: 55:33

So specifically on that, you know, I think I actually want to be. I want to push on one of those points a little bit. I think a lot of young people who are getting, you know, advice from really, you know, experienced and talented professionals is build a thesis, but I think now it's gotten to a point where there's a little bit of performance behind it, which is okay. Let me just focus on something for the same thing, for the sake of focusing on something to push back on that a little bit, to help people really make the most of these conversations and introductions. Do you have any advice from your experience talking with people who are developing their own sort of individual theses what is stood out between the ones that you remember are the ones that were really high quality and just really key points.

Speaker 3: 56:10

to that point, what I've been, I think, super impressed with a thesis that is contrarian. And then they're not just, you know, parroting something they saw on CB Insights or from you know another BC's blog, bringing something different and unique and again, something I would hope is a big contrarian, but not like completely orthogonal. I think also that it's specific and actionable. So, just talking about you know TAM estimates and what this could be in the future, or what dislocation in you know, say, government policy is going to drive outside spend, that's interesting. But I like to get down into the weeds of. Okay, well, tell me you know which teams you've seen, even if you don't know them deeply, but at least tell me which teams have sparked your curiosity that might be worth following up with. So whenever I'm having a conversation in the context of someone thinking about being an advisor or joining our team or anything like that, may always have three or four companies in your back pocket that you've seen, that you know excite you, that have, you know, piqued your curiosity in some way that makes you want to peel back the layers. And again, that's for me a proxy for how insatiable is that curiosity? Do you have the you know intellectuality, go in and just want to learn and learn and learn, because that's our business. I mean, we are staring at the future through the lens of phenomenal entrepreneurs.

Speaker 3: 57:33

But you know, our shelf life or understanding these technologies is very, very short and we always have to be learning and humble enough to know that.

Speaker 3: 57:41

You know we will never know. You know, know it all and, frankly, in the climate space it's such a complex, hairy topic that has so many dimensions to it it's impossible for any single person to understand all those different dimensions because you have technology and policy and go to market and all the stuff that frankly scares a lot of traditional generalist investors away from the space and why it's been challenged and why there haven't been, you know, as many mega hits as they've had on the other side. Now I am absolutely convicted that, given all the money that we're going to need to throw with this problem to solve our global decarbonization ambitions, that there are going to be, you know, absolutely huge declicorns and beyond created in this space. But it does take an appropriate risk appetite and certain amount of patience and, ideally, alignment with other actors, whether they be government actors or big corporation actors, to make sure that you're properly de-risked and you're not just out there in the cold.

Speaker 1: 58:42

Yeah, I think it's quite. I really like that. I think that's quite interesting insights. I appreciate that. So this has been really, really great. I'm definitely going to have to like re-listen to this quite a few times to try to figure out all of the insights you've shared, because I couldn't catch them all the first time. This has been very much a pleasure, I would say. My last big question and then you can close it out is you know what is the area that you, if you left today to go build your own startup? I know that you want to be the coach, but if you were to do something today, what's the thing that you're most excited to go do?

Speaker 3: 59:16

If I were, like, forced to leave my job and go start a company tomorrow. It's an interesting one. One thing that I was just playing around with a friend hypothetically was effectively taking a business model that does already exist for looking at inefficient methane flaring and driving edge compute, and I just think there's such a big opportunity there. There's a company you probably know called Crusoe that's already doing it. There's a couple other companies that are focused just on the energy generation but, given all the demand I'm seeing for a high performance compute and, I'd say, latency tolerant edge AI applications, there's a lot of ways that we can take curtailed winds and again these methane flaring that are not great for the environment and could be much more efficiently combusted and drive data centers that are out in, say, west Texas and there's just such a big opportunity there to effectively build distributed data centers that are powered in a green and intelligent way that are going to empower this next wave of AI compute. I think that's a big opportunity. I think just personally kind of interesting to do there.

Speaker 3: 1:00:22

But yeah, if I were to do something tomorrow we go out to the new maybe starts in Bitcoin mining, but there's a much bigger, bigger play around doing broader compute at the edge.

Speaker 1: 1:00:35

I'll send you some companies raising that space right after, please do Very nice, but this is awesome. What's the? Where can people reach you? What's the call to action? What are you asking from?

Speaker 3: 1:00:45

the audience. Just come have a conversation if you think we can be helpful in any way, even if it's just as a partner. We do plenty of partnerships where we are not actually investing. Ideally, you know, we can bring both to the table. So you can reach me anytime over LinkedIn or just drop me an email. I'm grant grant Alan a l l e n at s? E dot com and we'll try to reply to every everything we get. But yeah, don't be a stranger, we'd love to engage and really excited about the. You know the rest of fun too and beyond. So really appreciate you bringing me on and it's been a been a good chat.

Speaker 1: 1:01:20

Yeah, absolutely Super excited to see how this goes. So thanks so much, Grant. Have a good one.

Speaker 3: 1:01:24

Awesome. Thanks guys.

Speaker 1: 1:01:28

All right, man, so that was pretty great conversation. What are you, what's your biggest takeaways, what you thinking?

Speaker 2: 1:01:33

Yeah, I think it was. It was really informative. I feel like the most important part of it was understanding, like, how CVC's work, corporate VCs work. I guess we can't say that because he called himself a specialized VC, which was an interesting take on it. It does seem like there is some differentiation in terms of, like, how they think about their investments and Schneider Electric. But I actually feel like one of the things that stood out to me was that in venture capital, a lot of the times when you're helping your portfolio companies, you're doing it based on your network and who is in your network and who you can connect people to. In the case of a corporate VC, it's an interesting foundation where who you're going to help the company with, the portfolio company with is written out right. If you're getting funding from SE Ventures, you're getting funding likely in some sort of partnership, if it goes well, with Schneider Electric. So I feel like there was an air of strategic value that I feel like they may.

Speaker 2: 1:02:33

Oh shit, wait, I kind of want to resay that. Hold up, let's cut that out. Hold up, I don't think you have to resay it, right. Wait, let me think about what I want to say. Wait, what do you think we should say? What are the kind of things you?

Speaker 1: 1:02:45

should. I think you should just keep going, because I don't have the time we're going, so I don't even know where the stop is here.

Speaker 2: 1:02:51

I'll just try to make it more punchy. I'll try to make it more punchy, okay, because I just don't want to for the audience, I just don't want to say words, just to say words. I'm going to try to make it punchy, all right. So we'll just we'll include your question and then we'll cut my original part out. I thought it was a really great conversation. It's my first CVC conversation that we've had, so I learned a lot about how this corporation, how Schneider Electric, is working with their venture, with this venture group, to support innovations that will eventually hopefully become either their customers or people they can buy from, or potential acquisitions. So I found it really interesting. I think he had a very nuanced view in terms of the fact that he wanted to maintain that separation between them and Schneider Electric and the way that they look at investments, but it was clear that there's a lot of strategic value in this model. Yeah.

Speaker 1: 1:03:42

I mean, I try to think a little bit about the. I've had some other people I'm trying to think. The last one I have was Telstra Ventures, which is a corporate arm, but they are now technically independent and it's very for me, I don't know. My biggest thing is when I'm hearing these guys talk. I'm just like they know so much and they have such good partners that it's really hard to not be like this has to be the only way. Right, like you have to do this, right. If I'm, if I'm a founder, I'm thinking to myself you got to do this. But then I was like, as we're like thinking and kind of cooling off from the conversation. I'm just wondering, like, what are your thoughts on perhaps the downsides of it, the things that you would be apprehensive about if you were going into that situation?

Speaker 2: 1:04:23

I mean, the one thing I think it's too hard to talk about is IP concerns. Right, I think he talked about how founders are getting more comfortable understanding what it means to approach a corporate VC, but I still you know I'm not familiar with the, the you know horror stories of working in in that kind of a situation. I wonder if there's real IP concerns with you know, if someone's a potential customer, potential acquisition, it's likely that they have something that this bigger corporation would like right. So what are the? You know as the event is probably as a good track record? But what are the potential risks that you run as a founder when approaching some of these newer corporate ventures where they're not vetted right? They're at least on fun too. But what about these new ones? You know you don't know that much about yet.

Speaker 1: 1:05:08

Well, that was why I was partially asking the question, because he he mentioned about encouraging people to go talk to big incumbents, right, and I was thinking to myself but it's fine with with SE Ventures, because there's a track record, right, and there's also, like, schneider Electric is a like very, you know, longstanding company that have been around. They do all kinds of things in climate and energy, but what about these other ones that seem unrelated? Cause there's going to certainly be. We already saw it right With the CTVC report that there's more corporate VCs starting and you've got to be like a little bit leery, like okay, what's going on? This is their first rodeo. So I would be curious. I mean, there's probably an entire need for resources and content around those companies starting those CVCs. But I don't know.

Speaker 1: 1:05:56

I thought it was pretty cool. I really, I really was keen. We didn't get to it. We got to ask them a little bit about the talent stuff, because if they have this huge pool of talent, that's not just, like you know, the world has a pool of talent, but they know, because they have the relationships within Schneider, they know so many like really talented and super smart individuals who've probably been at Schneider for a long time that they could probably tap on the shoulder to drop in and either support the startup or join the startups. I don't know. I just thought that would be really interesting to see how they manage that. I don't know if you had any other big takeaways.

Speaker 2: 1:06:30

What was your takeaway from the conversation?

Speaker 1: 1:06:32

I mean for me generally. I think that my favorite thing that he talked about was actually the thesis thing. It's a great question. I thought that was really cool to have to hear him explain that, because it's, first of all, something I've never asked and I never heard anybody ask that before in any podcast. So I thought that was really cool, makes us think a little bit for ourselves. But I don't know, man, I really enjoy the conversation generally and I hope provides a lot of value to people. I think it will.

Speaker 2: 1:07:03

Yeah, definitely All right.

Speaker 1: 1:07:05

We'll see you guys next time on the podcast.