Matching Leadership Talent with Innovation Spinouts

Tapping into Rev1’s First Connect program is a great way for innovators to connect with leadership talent who have the know-how and experience to help build exciting technology into a business. First Connect is also a great way for Rev1 to get to know Columbus business leaders who are interested in startup opportunities.

David Bergeron, Rev1 senior vice-president of acceleration and development, has helped match eight CEOs with eight promising startup opportunities. He talks candidly about the process and his experience.

MM: Your prior experience was in Silicon Valley where you specialized in building teams to commercialize technologies from academic and research institutions. What’s the leverage here in Columbus that’s helped you match up those eight CEOs and startups in less than a year?

DB: The Columbus region has a lot of great innovators with good ideas and technologies. In Silicon Valley, it’s second nature for professors at Stanford or Cal with good ideas to go to Sandhill Road to talk to VCs about finding someone who can build their concept into a business. That’s the mindset and model that we’re developing here in Columbus.

Our message is twofold:

  • If you are a technology wizard and need a leader to turn your idea into a business, give us a call. We’ve helped innovators, scientists, professors, physicians, intrapreneurs, and others find the right person to turn their fundable business plans into companies.
  • If you are a business leader who wants to start a company, let’s talk. Maybe you are a serial entrepreneur or a CEO who isn’t ready to retire. Or a business leader who has always wanted to do your own deal. Or a consultant who is tired of getting on planes. Rev1 can help match your interest to a well-vetted concept. We will only introduce you to potential business ideas that make sense for you.

MM: Seems like you are pretty confident that the concepts you bring forward have potential. What’s behind that confidence?

DB: In the realm of startups, nothing is ever guaranteed. But at Rev1, we have a metrics-driven approach that helps us connect and work with fundable spinout technologies. In 2015, 13 of our invested companies were spinouts. That’s 46 percent of our client engagements. (In 2014, by comparison, we invested in just three spinouts.) In 2015, 22 young companies received a total of $42.5 MM in funding, up 62 percent year over year.

MM: Recap the process that produced those results.

DB: Rev1 is doing something that’s a little unique. We vet ideas, help entrepreneurs validate their concepts and then communicate opportunities to First Connect members. At a minimum, First Connect members are aiming to share their guidance and expertise. To the extent that we can, we make connections where there are aligned needs between a startup and skills from the First Connect member to identify advisors, customers, Board members, or CEOs.

MM: How does an entrepreneur with a good idea get the attention of a business person with the potential to lead the company?

DB: We can’t just flash the technology and expect leaders (or investors) to go for it. We develop an investable business model. When I go in talking about technology, we lose them. These are business people. But when we can say, here’s a sexy tech and this is how we think a startup can make money with it, for example by displacing existing product a, b, or c. Their eyes light up.

In two to four meetings with potential leader, we can help them understand the investable business model.

MM: What else is there to this process of startup leadership hunting?

DB: First and foremost, we want to ensure that the personalities can get along. Can the technology wizard and the business leader work well together? Does the business leader need to be team-oriented or more directive? How much does the technologist expect to be involved in the day-to-day running of the business?

Second, does the business leader have technical, industry, or managerial skills that are immediately applicable? If we have a professor who is a specialist in advanced materials, we don’t need to duplicate that experience in a CEO; we need someone who knows business development or something else.

Third, can the business person run a company? Have they run a startup before? Can they evolve from corporate culture to the leanness of a startup? Are they doing it because they want to see if they can succeed? Can they go to investors and raise $5 or $10 million?

Fourth, and most importantly, are both the innovator and the business leader coachable? Are they willing to listen and work as a team?

MM: Any other nuances or bumpy spots?

DB: Yes, a couple.

First, CEOs of successful startups tend to evolve from equity to equity plus compensation. There are some startup opportunities that come with a salary, but not very often. So if a leadership candidate expects a steady income, that significantly limits opportunities in the startup world.

Second, the cap table discussion about who will own what percent of the company is always a little sticky.

Typically, the innovators keep their current jobs, often with an employment contract that limits their participation in the venture. The CEO, however, is likely to be putting in most of his or her time. Often the innovator has a hard time understanding how the equity and equity vesting is planned to ensure the mutual investment of the potential leader and founder.

This is another place Rev1 can help. We lead two or three sessions, including some training, to bring the two parties into harmonious alignment. More often than not, the entrepreneur and the leader look to the Rev1 team to recommend solutions that have worked in the past (experienced based). We take the discussion back to the investable business model, and most of the time, logic prevails.

MM: And then?

DB: This is the fun part. Getting the new CEO and the innovator to start working together and build out the investable and potentially fundable business plan.