Expert Advice from Venture Capitalists Written 25 June 2018
Panelists: Moderator Van Espahbodi, co-founder, managing partner, Starburst Aerospace Accelerator; Maryanna Saenko, principal, Khosla Ventures; Brian Schettler, managing director, Boeing HorizonX Ventures; Peter Truwit, associate, Seraph Group
by Ben Iannotta, Aerospace America editor-in-chief
Four venture capitalists at the 2018 AIAA AVIATION Forum in Atlanta gave a glimpse into their world — from the fiercely competitive pace of their business to what they like to see in a pitch for funding — and discussed the technical areas in which they think the next aerospace breakthroughs might lie.
Success in the venture capital business requires moving quickly but not recklessly, several panelists said June 25 in the session “Investment Perspectives on the Aviation Market.”
Brian Schettler, managing director of Boeing’s 14-month-old HorizonX Ventures unit, said his team is doing deals in as little as three weeks. He said Boeing CEO Dennis Muilenburg responds to approval requests from the unit in minutes.
“It’s not hours; it’s not days; it’s not next month,” Schettler said.
Things can unfold even faster elsewhere, depending on the marker one chooses as a starting point. Maryanna Saenko, a principal at Khosla Ventures, said her company once reached a deal in three hours.
“They pitched at 9 a.m., and at noon, we had a signed terms sheet,” she said.
But Saenko said it took six months of research and talking to experts before that meeting to have confidence in their ability to make a fast decision.
“We knew what [the right opportunity] looked like when it walked through the door,” she said.
Saenko also offered a surprising caution about research: “It’s possible to do too much diligence.”
Dig too deep, and it becomes impossible to “believe in” the next SpaceX, or Planet or Rocket Lab, she explained.
Moderator Van Espahbodi, co-founder and managing partner of the Starburst Aerospace Accelerator, asked the panelists to describe quality investment pitches.
Peter Truwit, an associate at Seraph Group, said the best of them tend not to come from people who are driven solely by money.
“If the goal is to get rich, that’s perfectly fine, but we want to know why you want to do this thing to get rich,” he said.
Schettler added: “You want to see enthusiasm sweating off them. You’re betting on the people just as much as the technology.”
That said, enthusiasm can’t blind an entrepreneur from a key question, Schettler said: Can you make it economical, or can you only make one highly complex unit?
Also, there will be setbacks, and Saenko explained a successful entrepreneur needs to exude a sense of “incredible grit” to face such challenges.
In what areas will the next big aerospace breakthroughs occur? The panelists touched on everything from artificial intelligence to the desire for information connectivity to space launch to electric vertical takeoff and landing aircraft for urban transportation.
“We want it to be unique, like ‘Holy crap, why didn’t I think of that?” Schettler said.
Saenko pointed to data showing societies are becoming more and more urban. She said that doesn’t mean getting from one place to another has to be “as miserable as it is today.”
Truwit said work will need to be done on enabling technologies if electric vertical takeoff and landing aircraft are to take off.