Jonas Svedlund
Patrick Patnode

Patrick Patnode & Jonas Svedlund

President of Licensing & General Counsel at GE Ventures

THIS CHAT HAPPENED ON November 21, 2017

Discussion

Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
Hi everyone- Jonas Svedlund and Pat Patnode here from GE Ventures, GE’s venture capital arm. We are going live today to answer your burning questions about the world of venture capital. Together, we are the finder and the closer of VC deals for GE Ventures, so we know about the process from start to finish. We also focus on things outside the traditional VC-model like technology licensing. We are here to answer your questions on what is hot in VC, advice for entrepreneurs and more — all you have to do is ask!
Ali Naderzad
Ali Naderzad@ali_naderzad · LEW is available @ SharePoint
Hi, what is the greatest challenge that a venture capitalist has to face on the job?
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@ali_naderzad Thank you for joining! I think for us, with the corporate venture capital arm at GE, very often it's a bandwidth issue. This may also recur in other shops. We find a lot of great ideas - they emerge from our research at GE, from our customers and suppliers, from our employees, from the external ecosystem in the sectors we play in. Working through and activating and/or actioning the ideas is a great thrill, but often, give the throughput, the greatest challenge as well.
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@ali_naderzad @jsvedlund Ali, I'm going to agree with Jonas. Where and How do we focus...especially in the world of licensing, we have an endless supply of new and differentiated technology pieces....how do pull them together into a compelling opportunity, identify the market opportunity and the players (often outside of GE industries) and then start a dialogue with prospective partners.
Niv Dror
Niv Dror@nivo0o0 · VC at Shrug Capital
How do you go about sourcing deals and meeting founders?
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@nivo0o0 Hi Niv! We find deals through a lot of different areas. GE plays in a number of sectors that we're aligned with at Ventures - Healthcare, Energy, Industrial Internet, Advanced Manufacturing among others. We'll get great insight into emerging companies through GE's footprint in those sectors, or through our customers, suppliers or other networks.
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@nivo0o0 We also spend a fair amount of time in the innovation ecosystem meeting and talking with founders, other investors, and other technology professionals. We have offices in Menlo Park, Boston, Chicago, Houston, Tel Aviv, Shanghai. We're out in those and other hot innovation ecosystems actively prospecting for deals.
Sam Cates
Sam Cates@samcates · investor at GE Ventures
@nivo0o0 @jsvedlund Spot on! To add to Jonas's answer, investors at GE Ventures often meet companies the same way most VCs do... a network of VCs/founders/etc, events, or desktop research... but they we also get referrals from inside GE sometimes. There are folks hacking away at projects across GE and discovering great products/companies in the process. Resin.io was a great example, where one of our researchers was using it to manage a fleet of Raspberry Pis.
Abadesi@abadesi · 👩🏽‍💻 Product Hunt | Hustle Crew | NTT
Hey @jsvedlund, why does GE have a licensing business?
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@jsvedlund @abadesi Hi, this is great question. GE Ventures is a multi-model innovation platform. Having equity investment, new business creation, and licensing all positioned within GE Ventures allows us to be agile in our approach to the marketplace.
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
What factors do you look for as key indicators for success when evaluating a VC deal?
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@jakecrump Great questions Jake. GE as a corporate VC looks for several different factors: 1) Does the opportunity fit into GE's investment strike zone; 2) Is the portfolio company positioned to bring back a nice return on our investment; and 3) the strength and passion of the portfolio company's leadership team.
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@jakecrump @patrickpatnode Agree on this! Our strike zone often looks for a good strategic fit for the portfolio company with GE's sector interests. This means that we not only look for companies that have strategic value and alignment for us, but where we can add value to the portfolio company. Our investors try hard to be good advocates and connectors for our portfolio companies.
Ayrton De Craene
Ayrton De Craene@ayrton · Code @ Product Hunt
What are your top tips for founders looking for their first investment?
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@ayrton Articulating the idea and addressable market is often very challenging but pretty key to setting the mission for your company and to your investors. And then differentiating from others who are addressing the same or a similar market.
Sam Cates
Sam Cates@samcates · investor at GE Ventures
@ayrton Also, be very clear about why your raising money. Investors want to know how the funds will be used to drive the company's growth and value. Will you hire more people to increase product functionality (and therefore it's addressable market)? Will you invest in marketing channels to increase visibility (and capture more of the market)? This is relevant at all stages, but especially at the early stages to demonstrate you understand what raising money means.
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi Pat and Jonas, thanks for joining us today. Where do you begin when starting a new licensing deal? What do you look for?
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@ems_hodge Hey Emily, thanks for the great question. Licensing deals start in a lot of different ways from GE employees or requests from interested partners. Some of the key components that I look for are a) Do we have a compelling technology story, b) what industry and partners would be able to leverage that technology to differentiate themselves, and c) do we have actual customer/partner feedback to validate our key assumptions. From there, we can start to engage partners on terms of a relationship including pricing, timing etc.
Seth Williams
Seth Williams@sethbwilliams · Designer, Product Hunt
What's a usual day look like for you?
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@sethbwilliams Thanks for the question Seth. Our Ventures Business is really flourishing right now so each day has a different flavor to it. As President of the Licensing & Technology Ventures (LTV) Business within GE Ventures, my days almost always involve discussions with my team and with our customers/partners. Discussions within the Licensing Business typically center around growth, new programs, ensuring we understand the value proposition that we are presenting to our partners and working with the team to continue to drive towards our success criteria, both financial and strategic. Customer engagement can vary from routine check-ins to make sure our relationship is strong and we are both working towards a mutually beneficial outcome or occasional discussions/negotiations about the framework of our relationship.
Sam Cates
Sam Cates@samcates · investor at GE Ventures
@sethbwilliams I'll add a different perspective. As an investor on the team (focused on Series B/C investments in IOT-related companies). I spend my day on a mix of (1) calls/meetings with companies I've identified or been introduced to, (2) doing research on things I've heard/learned, (3) check-ins or board meetings for portfolio companies, (4) pursuing later stages of diligence in company, and (5) talking to GE stakeholders about initiatives and projects involving portfolio companies. I ordered those based roughly on the amount of time they take up, but it shifts around constantly. For example, when I'm doing later stage diligence it can take up a ton of my day... but I'm not doing that all the time. My favorite by far is talking to companies about what they're working on, which I think is why most VCs do what they do.
Sam Cates
Sam Cates@samcates · investor at GE Ventures
@sethbwilliams also tagging @amrith since he asked similar question below.
Amrith Shanbhag@amrith · Community at Product Hunt & Feathrd
What’s a day in the life of a corporate VC? 🤔
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@amrith Thanks Amrith. I answered a similar question for @sethbwilliams earlier. But to neatly summarize...we are super busy. I'm the President of what really amounts to a start-up within GE. While exciting...it also keeps us on our toes. One thing that I'll add to my typical day is that I spend quite a bit of time mentoring others from around the company (and outside) to help others navigate their own careers. I really enjoy this and hence...make sure that I find the time.
Amrith Shanbhag@amrith · Community at Product Hunt & Feathrd
@sethbwilliams @patrickpatnode Wow that's quite a lot on one plate.. Thank you so much for replying :D
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@amrith Thanks for the question!! For me, no two days are ever quite the same. I spend most of my time in the innovation ecosystem of Boston Massachusetts, although spend considerable time with customers, co-investors and the GE Ventures team and the legal & BD team in San Francisco Bay Area, New York City and Albany area at our Global Research Center and elsewhere.
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@amrith We do three fundamental and related things at GE Ventures - we invest in startups which is our traditional VC business, we create and grow new companies, and we look for opportunities to license and commercialize GE's technology base. The legal and business development teams are instrumental in activating these opportunities for growth. So a lot of my days are interesting, varied and challenging as we do things like building companies from the ground up. Luckily, we've got a world class legal & BD team who are experts in their areas -- who are tasked with making complicated matters easier.
Amrith Shanbhag@amrith · Community at Product Hunt & Feathrd
What are some of the tips you would you give to a student who is getting into startups?
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@amrith Amrith, this is a great question. This really ties into where your passion lies. I think in startups, medium sized and even larger companies, if you can align your passion with your willingness to take and accept risk...you position yourself for both a financially attractive role but also one that can unleash your personal growth. I'm lucky....I've spent my whole career inside of one of the worlds largest and most innovative companies....and I've found my "startup" within the Licensing & Technology Ventures organization and I come to work each day with enormous levels of energy and see a lot of business and personal growth ahead....find what drives you.
Sam Cates
Sam Cates@samcates · investor at GE Ventures
@amrith @patrickpatnode such a great answer...
Amrith Shanbhag@amrith · Community at Product Hunt & Feathrd
@patrickpatnode @samcates Absolutely, thank you so much for replying!
Ali Naderzad
Ali Naderzad@ali_naderzad · LEW is available @ SharePoint
How much do potential deals come to you and how much do you seek out yourselves ?
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@ali_naderzad Thank you!! We're often actively in the market looking for deals per the thread above with @nivo0o0 & @samcates. We also grow some deals ourselves. In our new business creation unit we create our own businesses by searching the broad landscape of GE and industry to identify high potential opportunities from which new businesses are created. We then build those businesses and try to deliver industrial solutions at scale. It's hard work for the team (founder time!) but super cool.
Ali Naderzad
Ali Naderzad@ali_naderzad · LEW is available @ SharePoint
@jsvedlund that’s very impressive. You have your own incubator !
Sam Cates
Sam Cates@samcates · investor at GE Ventures
Hey Jonas and Pat! What do you look for in co-investors and partners?
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@samcates Hi Sam! You may have your own perspective on this question - but i think what really differentiates a co-investor will be the value and energy that they can bring to the company and the idea.
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@samcates For a number of the companies we invest in, they are in the lucky position where they can accept capital from numerous sources. For us, we look for co-investors that bring value beyond just their investment, and we like to think that we do that as well. For our portfolio companies, we try to bring some of the resources of the broader GE group to help position the portfolio company to win in their business model. We think this is a key differentiator for us.
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@samcates Hey Sam, I'm going to give you another answer from a Licensing perspective. Most times we are looking for partners that can take GE technology and translate it into their market segment to help them differentiate and win. While we care greatly about that partners ability to be competitive, we also make sure through our Know-Your-Partner process that the licensing partner is a good choice for GE as well.
Scott Asmus
Scott Asmus@scott_asmus · BAE Systems
Any thoughts on approval process from all the stakeholders within the company to dispose of IP assets?
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@scott_asmus Hey Scott...great to hear from you. This is a great question. IP and technology are a company's most vital assets (other than its people) and sometimes it can be challenging to get everyone on the same page about how to properly leverage those assets. We work hard to partner with the GE Business units, jointly make decisions about licensing and about which assets can be made available. I'm finding that the closer that we partner with the stakeholders, the better we educate about licensing models, and the more we can demonstrate real results, both financial and strategic, the easier the process becomes.
Scott Asmus
Scott Asmus@scott_asmus · BAE Systems
@patrickpatnode Not as easy as you make it sound - but totally agree. Thanks
Jonas Svedlund
Jonas Svedlund@jsvedlund · General Counsel at GE Ventures
@patrickpatnode @scott_asmus Pat and his team are great at finding the "win win" that is often inherent in these technologies!
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@scott_asmus Scott...i agree this is not easy....I might also add that you need to spend time thinking about how to develop KPIs that matter to the Business Units....this will help tremendously.
Wen Jie Ong
Wen Jie Ong@wen · PhD candidate, MIT
Hi Pat and Jonas, how is the current changes at GE (after the recent Q3 results announcement) affecting GE Ventures?
Patrick Patnode
Patrick Patnode@patrickpatnode · President of Licensing at GE Ventures
@wen Wen, great question. Our company has always been committed to Innovation (for over 125 years) and it will continue to be a major focus. GE Ventures is positioned to be a key contributor to both innovation and growth for GE....really looking forward to it.
Wen Jie Ong
Wen Jie Ong@wen · PhD candidate, MIT
@patrickpatnode Thanks Pat, I have always been a fan of GE and look forward to hearing more about the great work by GE Ventures.
Ankit Singh
Ankit Singh@_ankitsingh · Product Unicorn
Hello Jonas and Pat, how can early stage startups with limited resources attain the first point of contact in a VC world where nothing works without a good referral?
Sam Cates
Sam Cates@samcates · investor at GE Ventures
@_ankitsingh VCs are constantly looking to identify companies, but are battling against very limited time to pursue every lead. First, understand what investors make sense based on your stage/company/geography/etc. Second, get in front of those VCs and think about it just like customer acquisition in the early stages. Make it clear why they should spend 30 minutes talking to you, either by referencing common points of interest (portfolio companies, blog posts, etc.) or early signs of success (marquee customers, growing revenue/users, etc.). It's tough to get time with them, so this part may require trying again and again through different avenues.