Thursday, October 22, 2020
Interview with Krisztina Holly, Good Growth Capital
Earlier this week, Good Growth Capital (www.goodgrowthvc.com) announced it has started looking at investments in Southern California, adding Krisztina Holly as West Coast Venture Partner for the firm. We caught up with Krisztina, who has been active in Southern California's startup community for a number of years, to learn more about the firm and its investment style.
What kinds of areas does the fund make investments in?
Krisztina Holly: We are an early stage fund, known for our ability to discover and cultivate very complex science and technology deals. We look at everything from materials, to data science, to medtech, biotech, sustainability, and energy. We do pre-Seed to Series A deals. We just launched a third, $100M fund focused on seed to Series A investments in transformative science and technology companies.
It looks like there's some link to MIT with the fund?
Krisztina Holly: We have two different fund families. Our Infinite Corridor Fund makes pre-seed to seed investments in transformative science startups, primarily MIT-related. A bunch of us went to MIT, so we do have really strong ties to MIT. However, we are actually headquartered in South Carolina. We actually get quite a bit of unique deal flow from the Southeast and New England. We see our MIT link just as a great way to source deals for our funds. Our two founders, Amy Salzhauer and Maureen Stancik Boyce, have been working since 2000 building very deep tech companies based on university research and other partners. The five managing partners have built 18 companies now, worth billions in value. They both knew each other from their MIT connection, and that's how I met them too, in fact. I knew them when I was the Founding Executive Director of the MIT Desphande Center For Technological Innovation, which I set up and built to help cultivate early stage innovation.
Does the fund lead, and do you work with coinvestors?
Krisztina Holly: We love leading deals, but we don't have to be the lead. We love coinvesting with great investors. Often, other investors look to us for due diligence, especially technology evaluation, because of our interesting network of advisors, across industries. That's one of our big strengths, both our operating experience and our really deep network. We're able to source very diverse, unique deals, at an earlier stage, and build value. We often have other investors join in our deals once we've built some of that value. A good example of that is Skyhawk Therapeutics, which has built a small molecule platform that enables rational design of small molecules that target specific binding pocket regions of RNA. They are now doing lots of deals with big pharma companies, and have been incredibly successful. We discovered them very early. We have a soft spot for investors and entrepreneurs, who might be super-smart, but are not necessarily as experienced. That's where we add value. Another of our companies is Pryon, which was created by Igor Jablokov, who founded Yap, the voice technology which is behind Amazon Alexa. Good Growth helped cultivate that deal and company early on, and he insisted we be part of his new company. We found it's very important to cultivate those relationships in startups early. That's the point of our announcement, which is to help celebrate the undiscovered talents and ideas that other investors and VCs might be overlooking, because they might not recognize those opportunities, or have the ability to invest in those areas.
You mentioned to us earlier that there's been a big impact on serendipity because of the pandemic. Can you talk about that a bit?
Krisztina Holly: I have been working double time making sure I don't get complacent. It's tiring to be on Zoom all the time, but I think this is the time, during COVID, which can be a great accelerant and great amplifier. Those people who have valued building relationships, based on curiosity, are the ones who are reaping the rewards. We have a super strong network, across a lot of different disciplines, from a woman who builds long distance kayaks for ocean rowing, to innovative people at large energy companies. I could name many, many more, but these are the kind of connections that help you spark ideas, and enable people to find you. Brad Feld has this mantra, give first, and I think that kind of curiosity and giving first pays off now. I find that a lot of people are referring people to me, hearing when someone is moving to LA, to talk to Z. I hear about a lot of startups that way, because of that really diverse network I've got around the country. I'm the first venture partner in the Southwest, and we've also added Robert Poor, who has a great background, and who I've known forever. We are making a push to find more deals, and do more deals, in Southern California.
I think, to answer the question for entrepreneurs, is unfortunately, people have fallen back a bit to their traditional networks. That's one of the negative things for society with this pandemic, due to the lack of serendipity. Finding funding is already a challenge for first time founders, people of color, and women. They already had a hard time raising money before the pandemic. It's even harder now. If you want to become a screenwriter, you can't just move to Hollywood and network your way into the industry now. In technology, you can't decide to go from the Midwest to the West Coast and just start going to networking events. That said, there are some online networking events, it's just that they take a lot more emotional energy. We just did a deal with Ateios, who I met a virtual event, but it was a lot of work. We must have gone through something like 150 deals. I've also met people who have reached out to me directly, and found some diamonds in the rough, but that's hard work. We've never not gotten into a deal that we wanted to invest in.
Having been active now in Los Angeles, is there anything Los Angeles hasn't taken advantage of but should?
Krisztina Holly: I still think it's the universities. LA has so much incredible potential in both the academic research and the engineering side of things, and in particular, biotech. I believe the Alliance for SoCal Innovation ran some numbers, and we were tied in terms of university patents generated with Massachusetts, blowing out San Francisco and the Bay Area. We have so much value in those research universities, and in particular, biotech, lifesciences, and med-tech. That said, there is a lot of infrastructure missing here. For example, executive talent needs more cultivation. I grew up in LA, and in the last 10-15 years we've really started to build more infrastructure here. I've been thrilled seeing the Alliance for SoCal Innovation and what they've been doing lately. I think that's the area of biggest opportunity, which is still untapped. That said, we also have amazing opportunities in space, and I think people are just starting to realize that, as well as material sciences, energy, cleantech, and many other super deep technology areas, which are not quite tapped. If you look at the amount of capital deployed in Southern California versus Northern California, we're still under-invested here by a factor of 5. We could easily use 4x to 5x the amount of capital we are getting now.
So what else are you working on?
Krisztina Holly: On the personal side, I'm on the board for River LA (www.riverla.org), and have been for the past seven years. We just came up with ground breaking experiences, based on the LA river. We're building a community of artists and culture aronud the LA river, and tapped a pioneering entertainment studio and 40-plus local artists, to create multi-sensory experiences inspired by the river, it's past, present, and future. This weekend, we're doing an in-person premier that we call Firefly Nights for our donors, and hope to scale that out to the public next year. We're also doing a digital version of this, where we expand on those stories. It's a full digital experience, not just Zoom, where you can collaborate and explore different stories, with surprising, and fun, multi-sensory, and collaborative experiences. Tickets are already on sale for that one, and we'll also be hosting some holiday parties.
Thanks, and congrats on the new role!