Genesia Tang: Summer Internship Reflection

This summer, I had the privilege of joining Blackhorn Ventures as an MBA Summer Associate through the Impact Capital Managers’ Mosaic Fellowship program, which aims to place underrepresented graduate school students into leading impact investing funds. I had an incredible experience at Blackhorn with my first foray into the world of investing, having previously held advising and operating roles in public sector consulting and at a late-stage, venture-backed mobility startup. As my internship concludes, I would like to share some reflections from my 10 weeks here:

The commercialization of a startup is paramount – a viable product must not only solve a problem, but do so at scale. This summer, I had the opportunity to participate in and lead 15+ company due diligence calls across our four Blackhorn verticals – energy, transportation, supply chain, and the built environment. Through that experience, I quickly came to realize that while many startups have a compelling product or solution, they underestimate the criticality of go-to-market and capital efficiency. “What would it take for you to get to [x] revenue target?” “What would it take for you to get to the next fundraising round?” As my Blackhorn team members posed pointed and insightful questions at company founders, I too was learning in that process.

 Blackhorn prides itself in going above and beyond to support its portfolio companies

One of my key projects this summer was helping a Blackhorn portfolio company define their market opportunity and identify a number of market expansion strategies. This analysis was prompted by investor feedback in their most recent fundraising efforts, and I could clearly see the impact of my work in equipping the team with more robust analysis and additional data points going into their future investor meetings. Beyond this project, I feel lucky that Blackhorn is a fund that prides itself in going above and beyond to support its portfolio companies. As a result, I had the chance to witness and participate in a number of platform activities, including syndicate-building, partnerships management, financial modeling, and operations support.

In venture, not only do we invest in early-stage startups, we operate like one, too.

I was pleasantly surprised this summer at the degree of autonomy and ownership in my role, as well as the culture of entrepreneurial spirit, flexibility, and agility across the broader team. Even in my initial interview at Blackhorn, one of our Managing Partners, Melissa, emphasized that the most successful investors at the fund are the “utility players” – self-reliant and proactive. This had proven to be true this summer, where my willingness to dive into new projects was rewarded with significant learning and growth. I had the opportunity to spearhead a follow-on investment deal, lead company diligence calls, formulate an investment thesis on a sector that was entirely new to me, and support internal fundraising efforts. An important skill in venture lies in determining what to do, where to dig, and who to talk to.

The drive towards achieving net zero is palpable in this space, and we cannot lose momentum.

More than anything, I am walking away from my internship experience feeling newly energized and motivated about working in climate. This summer, I had the chance to meet so many talented and passionate founders, both within and outside the Blackhorn portfolio, who are committed to driving progress towards global net zero targets. The entire Blackhorn team as well, of course, is aligned around our mission of enhancing industrial resource efficiency and accelerating decarbonization. Whether as an innovator, operator, investor, or advisor, there is so much work to be done in this space, and I am eager to see where our collective efforts will take us.

I can’t thank the entire Blackhorn team enough for an incredible summer of learning. I will be returning to my MBA at Harvard Business School in the fall, but will continue to cheer the Blackhorn team on from the sidelines.

Yahli Einav: Summer Internship Reflection

This summer I had the unique opportunity to Intern at Blackhorn Ventures for 10 weeks. Through my internship I was exposed to Blackhorn as a whole, from investing, internal operations, assisting portfolio companies, and reporting to limited partners. Building on two years of my Management Science & Engineering degree at Stanford, as well as a previous internship at a smaller early-stage fund, my experiences with the Blackhorn team, and focusing on climate and the industrial world, was incredibly interesting and rewarding. As my summer comes to a close, below are some of my primary takeaways and lessons.

1. There is an enormous under-water iceberg of infrastructure that operates as the backbone of consumer facing technology. Working within a climate fund, focused on the industrial world between the Built Environment, Energy, Supply Chain, and Transportation, I was exposed to many areas of technology that an average consumer rarely considers. Learning about the infrastructure that supports our everyday lifestyles – cloud technology, phones, internet, delivery services, among an infinite number of other outputs – I’ve gained a new outlook on the world and the opportunities below the surface.

2. The tech and VC landscape is trending towards the inherent point of technology: making existing systems more efficient. Every single one of the 10+ deals I had exposure to this summer focused on solutions that made an industrial process more efficient, whether expediting construction processes, eliminating bottlenecks in the supply chain, or expediting the energy transition by accelerating the deployment of infrastructure.

3. As an early stage investor, you can learn about a market after learning about a company, however, a more productive strategy is becoming an expert on a vertical, and then deciding what companies to search for. As a thesis driven fund, Blackhorn is able to have a calculated and concentrated investment pool driven by vertical expertise. During my summer, I worked on an extensive Data Center research project. Becoming knowledgeable about the area, prior to meeting with founders, allowed me to have a clearer understanding of where the best opportunities lie.

4. There is much more to the role than investing. While seeking out companies and doing diligence is still the core of the work, the early-stage investor is also a regular consultant to its existing portfolios, an internal entrepreneurial operator, and a client facing operator with regard to limited partners, which offers a wide range of experience in working on with number of largely different people, teams, and companies.

Overall, my experience and extensive learning this summer would not have been possible without the fantastic team and mentors at Blackhorn. I’m incredibly grateful for the opportunity I had this summer, and am excited for what the future holds for Blackhorn and industrial climate investing globally.

We’re thrilled to announce the close of our third fund, Blackhorn Ventures Industrial Impact Fund II, LP (IIF II). With $150M in commitments towards our new fund, our team is exceptionally well-positioned to partner with world-class founders transforming how we build, power, and move our world. Our focus is seed and Series A stage investments into capital-efficient software solutions, vertical SaaS companies, and AI applications that address the urgent need for industrial resource efficiency and decarbonization at scale.

IIF II is taking advantage of the falling cost curve of energy storage and renewable energy, historic growth in zero-emission transportation, the persistent need for supply chain resiliency, the mandate to scale energy-efficient building retrofits, and the urgent need to build a tech-enabled workforce in manufacturing, construction, and utilities. Portfolio companies are targeting the $1.7 trillion industrial resource efficiency market and leveraging the $4.5 trillion needed for the global energy transition by 2030.

Phillip O’Connor and Melissa Cheong co-lead the firm as GPs and managing partners. Only 3% of the $107B raised by venture funds in 2023 went to VC firms with women in leadership positions. With the conviction that diverse teams drive better financial performance, Blackhorn Ventures is proud to lead the way in a commitment to inclusive leadership in venture capital.

“We are at a pivotal moment where the AI supercycle and the manufacturing supercycle intersect with historic changes in our energy and transportation systems,” said Melissa Cheong. “Our fund supports founders at the forefront of industrial AI, addressing labor shortages, and delivering scalable decarbonization solutions. With six early mark-ups, we believe our thesis is timely and essential for economic competitiveness and industry durability.”

The fund has new limited partnerships with Mitsubishi Electric, Westlake Corporation, Goldbeck GmbH and Mercuria Energy, and continued commitments from Jonathan Rose, Simpson Strong-Tie, and the Grantham Foundation for the Protection of the Environment. These partnerships enhance our ability to support portfolio companies through industry insights, distribution and customer access, accelerating their path to scale.

“Strategic corporate partnerships are crucial for scaling impact,” added Phillip O’Connor. “We’ve been investing in machine learning and AI since 2017 and are privileged to bring this experience to bear on collaborations with a select group of multinationals that share our vision, and are committed to supporting groundbreaking digital infrastructure.”

Industrial Impact Fund II is actively sourcing new investments, and has already invested in some of the leading startups revolutionizing the industrial landscape through advanced AI-driven solutions, including Formic, Circuit Mind, ThinkLabs, Specifix, EcoWorks, Optera, and Electric Era. As an Impact Assets 50 fund, Blackhorn Ventures actively tracks and reports on the financial and environmental impacts of its portfolio, is aligned with Article 8 and 9 SFDR requirements, and helps define industry standards through groups like Project FRAME and Impact Capital Managers.

“Blackhorn has a unique investing approach for accelerating the transition to a net zero economy in critical industries. For select Caprock clients who have asked us to help them combat climate change, Blackhorn’s thesis and current portfolio of companies are compelling,” said Nick Flores, Managing Director at Caprock, a multi-family office with more than $11B under advisement. 

“We are pleased to partner with Blackhorn Ventures on Industrial Impact Fund II. This collaboration aligns perfectly with Mercuria’s commitment to driving the energy transition through innovative digital infrastructure and sustainable solutions,” said Boris Bystrov, Investment Managing Director at Mercuria. “By leveraging AI and advanced technologies, we can accelerate decarbonization efforts and enhance operational efficiencies across the industrial sector. We look forward to supporting the transformative impact this fund will have on the global energy landscape.”

The Blackhorn team recently returned from participating in BuiltWorlds”s Venture West, one of the pre-eminent events focused on venture investing in construction and built environment-related emerging technology.  Aside from reconnecting with a number of friends and co-investors at WND Ventures, Zacua Ventures, Cemex Ventures and corporate innovation leads at Owens-Corning, St. Gobain, Vinci and more, the gathering informed five key takeaways that make us even more excited about the growing startup ecosystem in the built environment.

Construction Tech’s Growing Opportunity

• • Despite an increasingly high interest rate environment, construction volume is growing. The AIA’s Consensus Construction Forecast panel—comprising leading economic forecasters—is projecting nonresidential construction spending to grow 5.8 percent 2023.
  • There is $450Bn of opportunity in potential productivity gains through digital transformation.
  • Construction volume is actually increasing in 2023 compared to. 2022 even in the face of steeply higher interest rates

Residential

1. • New single family house construction is off by about 18% nationwide, but volume is growing in Texas, Florida and SoCal.
   • Multifamily housing built to rent is growing quickly.According to a recent Fannie Mae study, the vast majority of metro areas in the United States suffer from a lack of affordable single-family housing for both renters and homeowners, with a cumulative affordable housing shortage estimated at about 4.4 million total units.

Non-Residential

• • Non-residential construction sub-sectors–infrastructure, manufacturing, including data centers, and infrastructure–are growing. Despite macroeconomic headwinds such as inflation, rising interest rates, and weak consumer sentiment scores, the AIA’s Consensus Construction Forecast panel—comprising leading economic forecasters—is projecting nonresidential construction spending to grow 5.8 percent in 2023

Corporate Venture Plays a Critical Role in Real Estate Technology

• • Corporate venture has continued to move earlier and earlier.Between 2010 and 2020, the number of CVCs grew more than six times to over 4,000, and at the height of the cycle these CVCs inked more than 2,000 deals worth $79 billion in the first half of 2021, surpassing all previous annual tallies.  Investment not only derisks potential future M&A, but also provides insights via exposure to trends ahead of the competition.
  • Seed and A rounds are occurring at volumes comparable to previous years
    • CSVs of firms like ProCore, Autodesk and Trimble are making more investments in early stage startups and watching to see whether they can grow, vs. acquiring them early on.
  • There is a trend toward flat Seed and A round extensions, and flat or down B, C and later rounds, vs.successive up-rounds at increasingly higher valuations
  • The hardest round to raise so far in 2023 is the Series B. Although, all the early & mid-stage rounds have fallen to levels not seen for 5-10 years.

• • Q1 volumes by year show broad declines across early-stage venture capital. Seeds peaked at 1500 in Q1 of 2020 falling to 155 in Q1 of 2023.

Capital-Efficient Pre-Fab Solutions are Experiencing Strong Tailwinds

• • Labor shortages persist and are worsening, which is leading to higher wages.
  • High interest rates on construction loans are a tailwind for prefab, which accelerates time to completion and rollover into lower cost mortgage financing
  • Sustainability and Safety concerns are further tailwinds for prefab, which creates 30%-40% less GHG emissions than onsite construction and is safer (McKinsey Study).
  • The prefab panel at BuiltWorlds Venture West generally supported Blackhorn’s prefab investment thesisof capital-light prefab solutions that:
  • automate the work of a single-trade, or
  • design a set of flexible modular components (“kit of parts”) and orchestrate an outsourced supply chain to manufacture, assemble and install the modules.

Data Sharing for a Fragmented Industry

• • While keynote Di-Ann Eisnor, ex-WeWork and Google/Waze and current CEO at Crews by CORE asked the crowd of corporates to refrain from ‘death by pilot’, there is a real need to share results from pilot testing across the industry.
  • Unlike other heavily regulated sectors, the construction industry does not have an industry standard, or peer reviewed journal of record where data gets shared from customer to customer, or from region to region.
  • Entities like BuiltWorlds are natural conveners. They can serve as a data repository and marketplace from their members like DPR and other large engineering and construction companies who are running multiple pilots to help accelerate deployment of startup solutions that are exceeding their corporate sponsor mandates.

 Deeper on Decarbonization

• • Real estate drives approximately 40% of global carbon emissions. If we’re to reach net zero by 2050, and keep temperature rise in line with the targets put in place as part of the Paris Accords, we’ll need to rapidly decarbonize our buildings.
  • Despite increased interest in sustainable real estate and the opportunities it presents to capitalize on and future-proof assets, only a fraction of the teams we met at the show were focused on using novel tools like AI and ML to decarbonize real estate.
  • There is a well-worn cow path for startups working on pre-construction, site analysis and optimization, materials marketplaces, and construction finance.We’ve seen dozens of the same companies pursuing the same opportunities that have little to no potential impact on emissions reduction. Many of these early-stage Founders would be well served drilling into their competitive landscape and getting a better handle on their unique advantages around customer acquisition.
  • Buildings that are heavy emitters are increasingly viewed as at risk of becoming ‘stranded assets’.Our single process automation thesis for pre-fab modular construction implies a significant emissions reduction opportunity.  With recent large funding rounds from BlocPower and Logical Buildings, and funds like Fifth Wall putting real dollars to work, the demand for scalable retrofit solutions are growing, with market pull coming from institutional investors, homeowners, municipalities, and utilities. A Blackhorn portfolio company, Ecoworks, based in Berlin, is a textbook example of a capital-efficient prefabrication business model to upgrade energy efficiency of old, energy-wasting and GHG-emitting apartment buildings.

Much has been written about the SVB meltdown and the need for startup liquidity and cash management, the tightening loan environment, and treasury management.  And while many of these issues remain at the forefront given the uncertainty and risk in the macro-economy, we believe that one of the most time-tested and important tools for Founders to have in their arsenal are well-established principles that help guide us as individuals and as companies in complex situations.  Through wrestling with principles, we both make better decisions and improve our decision-making capability.

One such principle that has been in short supply: When there is a run on the bank, channel your inner George Bailey.  More specific to the times we’re living in, during circumstances where information moves at the speed of the internet and rumor cannot be discerned from fact, overarching principles can help prevent bad decisions from being made, and can help increase the likelihood that good decisions get executed.

The SVB failure and ensuing regional banking crisis is but one of many cascading risks we cannot escape, and in an effort to avoid ‘brittleness’ we share these principles with the appreciation that every company’s situation is different.  As Founders, adapt the following to work for you and your company:

COMMUNICATE OFTEN AND WITH REASONABLE TRANSPARENCY

Regardless of the decisions you are making – and whether you even have enough information to make decisions – communicate with stakeholders often.

Employees – Who Will Read Every Word and Non-Verbal Cue

• Your employees will generally assume something worse than the actual situation (at least some of them)
• Have an all-hands conversation as soon as is feasible, letting them know your expectations and how you are planning for unforeseen occurrences
• Be careful not to confuse reasonable transparency with complete transparency.At the beginning of the SVB meltdown, the government was obliged to say that there was a chance that only $250k might be available, even though that possibility had low probability.  For those who believed it was likely their cash would be available sooner, and that the company could continue to pursue its mission with minimal disruption, there was no benefit to over-communicating, the low-likelihood chance that the world could collapse.
• If at all possible, founders who were ready to tell their team that they would be able to make payroll in all circumstances for the next couple of months, while things played out (see below for investor communications) found themselves in a much better situation when the FDIC announced their backstop
• Informing your team in the middle of a torrent of information that you know there will be much more news each day, and that you are monitoring developments as they happen conveys calm leadership and security, even if the reality may be different
• Agree to communicate with your team on a cadence that makes sense to you as a company (and ad-hoc as significant information unfolds)
• Be honest, but not necessarily brutally honest. We’re supportive of transparency and radical candor, but in times of crisis, people don’t need another reason to panic

Customers – Communicate Stability

• What’s worse than a company that’s only a few years old without much money in the bank? That same company without a bank.
  • It’s certainly not easy to navigate, but you signed up to be a founder.
  • Remember that many others going through the same situation can relate to you
• Be clear, position things well, and be honest
• Let your customers know whatever you can share that will increase their confidence in your stability

Suppliers/Landlord/Partners – Seek Support If and When Needed

• Understand and appreciate that each company’s situation is different, which will govern how they respond in difficult moments
• If you are in good shape with finances for the foreseeable future, communicate it to your suppliers to reassure them
• If you are in a difficult situation, seek flexibility from them – be creative; through effective communication (especially in situations where the crisis may be short-term and not of your making) more options will emerge with suppliers
• If you could be in a difficult situation IN A FEW MONTHS BUT NOT YET, be prepared:
  • Create a plan of how you will communicate with suppliers when the time is right
  • Determine the triggers/criteria that will determine when/if you will implement the plan
  • Communicate the plan to your Board
  • Monitor emerging events to reevaluate the plan and criteria
  • Avoid implementing the plan too early, as supplier fatigue will be your enemy

Investors – You Need Each Other More In Difficult Times Than in Good Times

• Only some investors have been through anything like the SVB situation (but that won’t stop many of them from giving advice as though they know exactly what’s going to happen)
• Investors want to help, but they need (and hopefully want) to be led
• They want to see you as a calm steward of the company, planning for the likely outcomes, and developing contingencies for the less likely (but possible) outcomes
• You want them to back-stop you if your money is tied up for a while
  • Help them appreciate that your team needs to know short-term payroll is assured.  If it’s not, you need to be transparent that the company is likely to run out of cash
  • Investors need to do whatever they can to be there for the company (e.g., short-term loans)

• You all want to share information as soon as it’s received to help make timely, well-informed decisions.It’s a balancing act.
  • There are times acting swiftly is paramount
  • There are times when determining you need more information to make a decision is prudent
  • Don’t create artificial deadlines to make critical decisions; rather, set dates to reflect on new information, (e.g., “If we don’t have clarity by a week from Monday, we will have another discussion to determine any new course of action,“ is much better than, “If we don’t have clarity by a week from Monday, we will cut our burn in half”).

• Set up an informal group so you can be nimbler in your responses to specific crisis situations
• Make RECOMMENDATIONS to your Board/investors seeking input (and approval when needed), don’t ask THEM what to do. If presenting options, have a preferred option
• Have contingency plans.Things happen – especially in times such as these…especially in startups.
• Separately, communicate with ALL investors in a written format designed to exude calm thoughtfulness and preparedness.Offer to listen to them if they want to reach out

In most complex situations, appreciate that you are only one of many companies navigating uncertainty, and that everybody is touched in some way by the historic events we’re living through. As with any complex situation, seek advice from people you trust, and in the end, use your best judgment to make the best decisions you can.

Know that the entire team at Blackhorn is with you for every step of the journey, in good times and bad.

Blackhorn Ventures is excited to announce our latest investment in rail efficiency platform RailVision Analytics, with participation from Trucks Venture Capital, MUUS Climate Partners, Incite.org, and Measured Ventures, and returning investors Active Impact Investments and Neil Murdoch.

The rail industry is the backbone of the global supply chain. Easily overlooked, it is responsible for moving the majority of the world’s raw and finished materials. According to the Association of American Railroads, in a typical year, US freight railroads move around 1.7 billion tons across nearly 160,000-miles of track – and the physics of steel on steel vs. rubber on asphalt mean that rail will always be more efficient than air, road or sea transport.

While COVID exposed the Achilles heel of global supply chains, new climate realities and domestic supply chain reorganization are demanding a more advanced rail system. However, innovation in the rail industry has been underfunded for decades, in favor of cost-cutting. Meanwhile as domestic manufacturing ramps up and manufacturers demand more reliable and timely service from railroads, rail remains by far the most efficient and environmentally friendly mode of transportation.

Source: JustMeans.com

Two-thirds of the global rail market still relies on diesel fuel for propulsion, versus electricity, (which tends to be the fuel of choice in China and the EU). The most recent study, from 2o12, suggests that freight rail electrification in the US could cost $4.8M per mile, which is prohibitively expensive. In 2021, the US transport sector consumed approximately 47 billion gallons of diesel fuel, an average of 128 million gallons per day, according to the EIA. Unfortunately, diesel fuel will be with us for a while.  While railways consume 9X less energy per tonne-kilometer traveled than trucks, they have yet to benefit from the digital revolution that has drastically improved our planes and cars, let alone the cloud-native and API centric architecture that is driving enterprise efficiency. The penetration of next gen GE Wabtec diesel electric locomotives today is minimal: less than 5% of all locomotives running in North America are diesel electric. Our rail infrastructure still consumes billions of gallons of diesel fuel each year, generating millions of tons of greenhouse gas emissions and cancer-causing particulates, especially around urban rail corridors.

Digital advancements are needed to improve railway operations and enable cost-savings and emissions-reductions within the industry.

While the railroad industry is open to innovations that will drive efficiencies (including locomotives powered by batteries or hydrogen), tools typically used by the sector to address the issue of high fuel costs are limited and require complicated integrations. Low rates of digitization across commuter, passenger, freight and switching systems means that rail operators and agencies have limited visibility into where fuel efficiency gains are to be found. The rail industry’s second biggest expense is fuel (after labor) at $60B annually. Innovation in the rail industry must be durable, high value-add, and user friendly. And it must be broadly adopted by rail industry management and labor; The Association of American Railroads estimates that a national rail shutdown (which Congress is actively trying to avert) would cost the U.S. at least $2B per day and could cripple energy delivery with risks for grid reliability.

RailVision substantially reduces a rail provider’s carbon emissions and fuel costs

RailVision was launched in 2020 with the objective of mitigating skyrocketing fuel prices by lowering consumption, reducing emissions, improving crew safety, monitoring operational compliance, and reducing wear on equipment for the $100B North American rail industry. RailVision’s flagship EcoRail platform is a lightweight app used on a crew tablet. RailVision’s platform integrates data sources already on locomotives (including passenger data and scheduling, equipment monitoring systems, fuel consumption data, event recorder data, crew reports, GPS mapping, and wayside inspection devices) to create an intuitive tablet-based app. The app securely collects and sends existing rail data to RailVision’s cloud platform. Then, the company’s machine learning algorithms analyze and translate that data into simple suggestions for braking, throttle, and other train-handling operations — all of which provide concrete ways to reduce fuel consumption, decrease CO2 emissions, and improve safety. Crews and supervisors are then able to use RailVision’s dashboard to monitor their savings and performance.

RailVision’s flagship solution, EcoRail, enables real-time fuel-saving recommendations

Source: RailVision Analytics company materials

The rail industry is just beginning its digital revolution and its contribution to sustainable transportation

The transportation sector makes up 27% of US greenhouse gas emissions due to the burning of fossil fuels – the most of any sector.^[1] While rail emissions are dwarfed by emissions from passenger vehicles or heavy duty trucks, railroad operators have recently faced increased pressure and incentive to reduce emissions and increase investments in digitalization. We believe that there is a huge opportunity for this sector to accelerate its path towards efficiency, and gain market share as the low-carbon option for freight. Rail can reduce heavy congestion and pressure on public roads, GHG emissions, and the likelihood of traffic accidents (according to NHTSA there were 5,601 fatalities involving at least one large truck in 2021.) In early demonstrations with Canadian customers, EcoRail delivered meaningful fuel cost savings of 10 – 15% and in turn lowered GHG emissions.

RailVision’s team: domain expertise, engineering DNA, and deep enterprise sales know-how.

RailVision is led by CEO and Founder Dev Jain, a mechanical engineer and former member of the Canadian Armed Forces with 5+ years of rail experience. RailVision’s CTO, Mark Smith, has 35+ years of team building and product experience and was formerly a VP of Technology at Virtusa. Dennis McDonald is RailVision’s VP of Sales and brings 10+ years of enterprise software sales at IBM, Oracle and Infor. Dennis also founded the rail association’s fuel efficiency conference 20 years ago. The broader team of 15 has experience across CN, Siemens and Urbint. The team has already demonstrated early traction and has been in pilot testing with several companies, including Genesee & Wyoming, Metrolinx, Port of Montreal, and Via Rail. The app is now commercially available for deployment by all passenger and freight shortline railroads. We’re excited to partner with this stellar team as they build digital infrastructure to power the future of rail transportation efficiency.

Blackhorn Ventures is proud to announce our latest investment in smart EV fast charging storage provider Electric Era Technologies, with participation from Proeza Ventures, Liquid 2 Ventures, and previous strategic investor Remus Capital.

The unprecedented acceleration of EV growth has created an urgency to build affordable and accessible charging infrastructure: 145 million electric vehicles (EVs) will be on the road and require fast charging by 2030.^[1] Recent federal and state policy, such as the Inflation Reduction Act and the Bipartisan Infrastructure Law, provide incentives and funding to switch to EVs, while President Biden’s National Electric Vehicle Infrastructure (NEVI) Program includes $5 billion dedicated to deploying public EV charging infrastructure. While federal leadership is welcome, states across the US are also passing historic policies – California and New York recently mandated that all new vehicles sold be either electric or plug-in hybrid electrics by 2035.  Making fast charge EV infrastructure ubiquitous is a generational opportunity.

The EV landscape is growing quickly, but installing fast EV charging today accentuates key grid challenges, resulting in higher costs for site owners, utility ratepayers, and EV drivers.

Electric vehicles are expected to demand nearly 60X more electricity by 2040 – from 11 TWh in 2022 to an estimated 655 TWh in 2040.^[2] Even if utilities drastically increase their investments into grid upgrades, it’s unlikely they’ll be able to source equipment and deploy capital quickly enough to accommodate forecasted EV growth. Public site hosts – such as convenience stores, gas stations, and retail chains – recognize the need to install EV fast charging to remain relevant, but face two major challenges: 1) Expensive and time-consuming grid upgrades, and 2) higher expected energy costs for site hosts and EV drivers that are subject to volatile peak energy prices depending on their time of use.

Electric Era’s behind-the-meter smart EV storage solution gets fast EV charging infrastructure built quickly – without needing to wait for grid upgrades.

Electric Era builds modular EV battery and smart charging systems that are easy-to-install and adaptable with any EV charger. Its PowerNode solution includes a 120 kW/60 kWh battery pack and a smart power management platform. This enables site hosts to discharge power to 4 separate fast chargers via one centralized location while using just 120 kW of power from the grid rather than the 600 kW required with a direct grid connection (see image below). Its small-footprint, power-dense solution uses 10X less energy storage than alternatives and is the most affordable EV fast charging solution today. Importantly, the PowerNode platform enables convenience store owners to meet eligibility requirements for the $5 billion in federal NEVI funding, minimize costs, and still support fast EV charging speeds.

Source: Electra Era Website

To reduce peak energy demand costs for site hosts and consumers, Electric Era’s solution includes an AI-driven smart software to predict and optimize charging.

Electric Era’s patent-pending smart software solution enables battery and charger site control, predicts expected power load and peak demand charges, monitors utility tariffs, and manages power load and delivery to ensure the optimal and most economical charging for site owners and consumers. One existing DC fast-charge site host and Electric Era customer noted that their utility costs exploded after installing fast chargers directly. With Electric Era’s PowerNode system, they were able to save thousands of dollars each month as its smart software filled the battery pack when energy prices were low to avoid peak demand charges while still ensuring EV fast charging was available whenever needed.

By enabling affordable and accessible fast EV charging, Electric Era will help us accelerate towards a clean transportation future.

The transportation sector makes up 27% of US greenhouse gas emissions due to the burning of fossil fuels – the most of any sector.^[1] According to BloombergNEF’s lifecycle analysis, EVs produced in 2030 will emit 70% to 90% less carbon dioxide than equivalent internal combustion engine vehicles.^[2] We need smart hardware plus software charging solutions today to enable the electrification and decarbonization of the transportation industry and reduce our global emissions footprint.

Electric Era’s team has the right mix of engineering and business skills to lead us into a new era of transportation.

The Electric Era team has an exceptional background: CEO & Founder Quincy Lee, CTO Sam Reineman, VP of Software Sith Dharmasiri, and Director of Build Development Eoghan Kyne all worked together previously at SpaceX. Lee and Reineman were Lead Mechanical Engineers there, where they led the engineering design, development, rollout and business outcomes for the Starlink Gateway Antenna Ground Stations. These engineering heavyweights are complemented by Director of Business Development Will Hersey, who previously led go-to-market sales and strategy, fundraising, and business operations at an early stage clean energy company. With their collective skills and experience, the Electric Era team stands out within the EV charging space, and we’re excited to be on this journey together.

Blackhorn Ventures is proud to announce our latest investment in business intelligence platform Isometric Technologies, inc. (ISO), with participation from Maersk Growth and existing investors including Kindred Ventures and L37 Ventures. 

With this investment, Blackhorn further deepens our commitment to companies making groundbreaking developments in supply chain optimization and efficiency.  We believe ISO will become the industry standard for how performance is evaluated across the supply chain, and will do what FICO credit scores did to the lending industry.

ISO allows shippers to measure the monetary impact of service across their transportation network, and enables carriers to showcase their performance to shippers in a way they would never dream possible. Similar to how Google changed the way that web packets move around the internet, automation and data collaboration can do the same for supply chains. But not unless you know what exactly happened across the lifecycle of an order/shipment, the root-cause and responsible party of service failures, and its monetary impact. With this funding, ISO is building the foundation for that future, while eliminating waste across supply chains, lowering costs by matching service with freight needs, and reducing emissions by optimizing carrier-lane selection and helping shippers optimize warehouse operations.

The Problem

While COVID revealed the fragility of our modern supply chain system, the reality is that for far too long retailers, shippers, and carriers have all operated on separated, siloed systems of record, making it challenging to reconcile data and arrive at a source of truth. Flawed data results in billions of lost dollars from unjustified chargebacks and poor procurement decisions. 

Transportation spend accounts for ~10% of a shipper’s COGS. On average, ~80% of that transportation is contracted through RFPs on an annual basis. To make the problem even worse, procurement leaders do not have a reliable way to source new capacity; there is no verified source of service data available to evaluate over 500,000 carriers in the US. 

Ultimately, transportation planners are left making costly decisions based on inconsistent and unreliable data, without the information needed to be efficient and effective. Service data is the missing link in harmonizing how supply chains are orchestrated. Supply chain leaders need a neutral, third-party source of truth to collaborate on datasets with their business partners. Enter Isometric Technologies.

(Image courtesy of Blackhorn Ventures)

The Solution

ISOʼs cleaned and contextualized datasets are powering the next generation of procurement tools and fueling performance optimization for carriers and retailers.

ISO surfaces cost-savings opportunities and streamlines the data reconciliation process between manufacturers, transportation providers, and other third party stakeholders in the supply chain, acting as a single source of truth to measure the hidden costs of performance. By associating costs from chargebacks and service level failures to the responsible parties, ISO surfaces actionable insights that help optimize complex business relationships and identify negative trends in the supply chain.

(image courtesy of Isometric Technologies)

The Market Opportunity

With over 500,000 carriers in the US alone, and billions of dollars in service-related penalties at stake each year, service is more important now than ever. Given the supply chain disruptions throughout 2021 and 2022, the true cost of delays and breakdowns in the US and EU may exceed $4 trillion, according to the Economist Intelligence Unit. In addition to this newfound realization of how important supply chain integrity is, corporations are also gaining a greater understanding of how the influx of large amounts of data needs to be harnessed and systematized to improve the speed, cost efficiency and resiliency of business operations.

The Market Traction

Iso has deep traction with consumer package goods (CPG) shippers delivering into big box retailers. customer results are showing:

• 40% Less time reconciling data per operator
• 400% Data improvement compared to previous score-carding methods
• $15M Penalty exposure reduction measured across two customers in 6 months

ISO has processed over $50bln YTD in purchase order value while ISO’s customers have improved overall on-time delivery RDD (requested delivery date) by +22% on average since onboarding, improving service levels and demonstrating a commitment to service.  

“Now that we have that one place to go, we don’t have to run around discussing whose data is right and whose is wrong; we’re operating on the same dataset. Instead, we can discuss what areas we can improve and identify where we’re already doing well.”

Cory O’Malley, Business Intelligence Manager, ELITE Transit Solutions

 As the first third-party agnostic arbiter of supply chain performance data, ISO recently launched an ‘Excellence in Service Award’ celebrating excellence in carrier performance. ISO’s 2021 Excellence in Service Award winners were selected by analyzing a combination of data sets: aggregated and anonymized core KPI metrics for shipments measured by ISO, as well as engagement rates with their platform.

The Impact Opportunity

ISO primarily addresses UN Sustainable Development Goals (SDGs) 9 and 12 by improving supply chain resiliency through predictivity and enabling a pathway to better resource consumption through future elimination of delays and idling.  UN SDGs that ISO address include:

9. Industry, Innovation, and Infrastructure – build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation 
10. Responsible Consumption and Production – ensure sustainable consumption and production patterns

The ISO solution addresses a key supply chain industry pain point with the potential to have significant ESG impact as part of their future product development plans. The team is planning to add a feature to help mitigate idling and delays; as trucks tend to idle with their engines on, any reduction in these activities would provide a direct emissions reduction.  A significant number of truck stops and waiting areas are in economically disadvantaged areas of the urban fabric so reducing emissions in these areas provides a further social equity benefit.  ISO is developing a green scorecard so shippers can assess the capital intensity of carriers, and at scale, the platform will be a key source of data for the implementation of electric trucking and the overall greening of the supply chain. 

In addition to price and service, sustainability is a critical dimension of supply chain operations.  Most sustainability scores underweight the true impact by omitting detentions, dwell times, early pickups, and other “nuts and bolts” of freight.  ISO is uniquely positioned to understand sustainability impact across a shippers entire operations.   By incorporating sustainability scores into the procurement process, ISO can help shippers reliably hit their emission targets with greater accuracy than ever before

(Image courtesy of Blackhorn Ventures)

The Team

The ISO team has an exceptional background: the company founders worked together as the founding team at Uber Freight, and not only have first-hand experience with the complex challenges in supply chain logistics, but also lead enterprise relationships, giving them the knowhow and network to be effective with ISO. Based on their collective capability, experience, and industry understanding, we think the ISO team stands out in the supply chain space:

CEO  Brian Cristol is building his third  Transportation & Logistics startup, and was previously co-founder of the Uber Freight team, where he worked as the Head of Enterprise Partnerships. Brian is passionate about solving the toughest supply chain problems for the world’s largest companies. With a background in corporate finance and technology startups, Brian is well-experienced building GTM strategy and scaling world-class sales teams (including at Uber, Turvo, and JP Morgan).

COO John Stauffer is a supply chain industry expert, and is building his sixth Transportation & Logistics startup.John has deep expertise in operations, product management, business development and customer success. John is a legendary builder; he was a founding member of both the Uber Freight product team and the Echo Logistics carrier sales team.

Led by a team with deep technical and supply chain expertise, the company has built the first collaborative SaaS platform to digitize the carrier scorecarding process. When shippers and carriers operate on a single source of truth, conversations between parties become more productive, and the supply chain gets stronger.

(image courtesy of Isometric Technologies)

“The skills required to lead high-performance teams have shifted more in the last two years than they did in the previous two decades,” explains Christina Curtis, Senior Advisor of Talent Strategy at Blackhorn Ventures. “The pandemic was an awakening, further blurring the division between our personal and professional lives. All of us had to step back and ask, “What do I want out of my life, and how does work fit into that?”

Christina has worked with hundreds of high-performing teams at companies like Google, Microsoft, KPMG, DaVita, Lockheed Martin Space, and Overstock.com. She joined Blackhorn Ventures earlier this year, providing her expertise as one of America’s most respected and sought-after executive coaches. A thought leader on motivation and goal attainment, she currently writes for Harvard Business Review, Forbes, Talent Management Magazine, and Psychology Today.

You’ve worked with a number of private equity and venture firms over your career, what brought you to this role, and why now?

I was a Blackhorn investor before I became an Advisor, so when asked to come onboard, the decision was easy. I had already seen the team in action, and had never met a group of individuals so driven by a purpose that extends far beyond their company walls. You can’t help but be inspired by the experience and talent of the leadership team and their visionary portfolio companies. The mission has had a gravitational pull in terms of bringing together a unique group of industry leaders. At this point in my career, where the time and impact ratio matters more to me than ever, there’s no place I’d rather be.

What’s your perspective on ‘the Great Resignation’? How should startup CEOs be thinking about retaining team members, and onboarding high-impact talent?

People don’t want to feel like an easily replaceable cog in someone else’s wheel. In fact, the reverse is more true today: Companies are now cogs in the wheels of their employees’ lives. The recipe for attracting high performing talent is clearer now than ever: unified goals; high standards for performance; transparency; recognition and reward; optimism, and a strong sense of believing.

You’ve written in Harvard Business Review about the importance of making sure team members feel valued, seen and heard; why are these concepts so critical for organizational success?

The word “Heliotropic” comes to mind. Plants rotate towards the sun to enhance the photosynthesis process, right? Well people are heliotropic in that we seek out those who make us feel valued, seen, and heard. That feeling enables us to perform at our best. The challenge is that leaders get distracted by the never-ending barrage of tasks – “tyranny of the urgent” – and can lose focus on the activities required to create the conditions for high performance.

It doesn’t matter how smart an entrepreneur may be, or how hard working they are, if they can’t harness the power of the collective, they are a leader without leverage. I find it useful to reflect everyday on how you want people to feel when you engage, and to hold onto that intent so that every interaction is positioned to be a powerful one. Every moment is an opportunity to generate momentum and energy that goes on long after you have left the room.

For entrepreneurs looking to build and sustain a culture of excellence in high performance, what are the three most important things they can do right now?

First, take care of yourself. On airplanes, we are told to put our own oxygen mask on before we do the same for anyone with whom we are traveling. When we don’t take care of ourselves, we can’t take care of others.

Yet most of us say yes to too many things, leaving us with packed days that are overflowing with obligation. We end up with a dysfunctional relationship with time. This leads to the loss of critical thinking power, our greatest asset, as our brain shifts from goal-directed behavior to self-preservation. We can become quietly resentful, reactive, feel overburdened, and lose our sense of resilience and patience with setbacks. I teach my clients to use their calendars to look at the past, present, and future simultaneously, so they can ask “is this conducive to me showing up at my best?”

Second, invest heavily in top talent. We need to invest in and develop those who could one day take over our roles – and let go of poor performers quickly!  “Stay interviews” are a great way to check in on how others are doing by asking questions about what makes a company a great place to work, and what is detracting from their fulfillment or performance.

Three, listen. All too often, I see leaders perplexed when a team member quits. In reality, that team member had probably been talking about his or her concerns for some time. Leadership just wasn’t listening. It is the greatest tool every leader possesses because it provides access to more data for decision making. I don’t mean listening with a “yeah, but” attitude. I’m talking about a desire to understand. The three most important words a leader can say are, “Tell me more”. 

What are you most excited to accomplish, and what are you most excited to learn in this new role?

Every entrepreneur knows the challenges that come when you are building a plane while you are flying it. I look forward to supporting Blackhorn and the portfolio company founders who are waking up every day wanting to grow their business and overachieve. It all begins with the leaders. Research shows that everything flows from the top, including a team’s results, morale, financial performance, and engagement. I’m honored to have the opportunity to connect with and serve entrepreneurs who are deeply committed to bringing their vision to life. Nothing could be more exciting to be a part of!

“The most massive public dollar investment we’ll probably see in our lifetime.”

With this week’s passage of the $369B Inflation Reduction Act, and the passage earlier this month of the $52B CHIPS Act, we’ve been getting inbound questions as to how these new policies impact our investment thesis, and underlying portfolio companies.  With unprecedented investments in industrial capacity, manufacturing, clean energy infrastructure and workforce development, these two pieces of policy are shifting the course of our economy: long term, transparent price signals for renewable energy, and historic investments and tax incentives for the electrification of transportation and housing.

For some perspective on how this legislation will impact Blackhorn portfolio companies, and what it means for how Blackhorn approaches opportunities in resource efficiency and digital infrastructure, we turned to Blackhorn Operating Partner Bill Ritter.  Should you have additional questions on what these new rules mean for your organization or for our investment approach, please reach out.  We look forward to hearing from you!

During his four-year term as Governor of Colorado (2006-2010), Bill Ritter established Colorado as a national and international clean energy leader by building a New Energy Economy. After leaving the Governor’s Office, Ritter founded the Center for the New Energy Economy at Colorado State University, which works with state and federal policymakers to create clean energy policy throughout the country. Governor Ritter has authored a book that was published in 2016 entitled, Powering Forward – What Everyone Should Know About America’s Energy Revolution.  Governor Ritter was formerly the chair of the Board of Directors of the Energy Foundation and currently serves on the board of The Climate Group American and the Board of Trustees of The Nature Conservancy.  The following interview has been edited for brevity.

What does the IRA mean for our core investment thesis as far as industrial decarbonization and resource efficiency?

We look at the sectors that are most in need of decarbonization, and these are the same sectors we’re working in – the power sector, the transportation sector, the built environment and our supply chain. The Inflation Reduction Act actually covers all of those sectors as part of decarbonizing the economy and simultaneously growing the economy and reducing inflation.  So if you look at the act, it has a variety of ways of addressing each of those. Some things it addresses with tax credits, and that’s going to spur investment in those areas. Some things it addresses with formula grants or other kinds of grant programs. The thought is that it will spur investment, by providing federal investments for industries that require a big capital outlay. It will cause us to develop platforms to manage the intersections between our supply chain, the built environment, the transportation sector and the power sector.

Is there one specific policy lever or section of the bill that you think is going to have the largest impact on reducing emissions?

We have seen the use of the investment tax credit and the production tax credits for a significant amount of investment in solar, in storage, and in wind. And we were also seeing those tax credits being tamped down or going away altogether over the next few years. This is going to reinvigorate the clean energy economy. We are going to see significant investments in wind, storage and solar that we might not have seen had the act not passed. It also has a significant ambition toward creating American jobs. It’s fair to say that in particular where solar and batteries are concerned, we lost out to the Chinese over the last decade. This act makes a significant move toward our being able to reclaim a leadership role in the manufacturing sectors that are going to be part of the energy transition economy.

(Credit: Nicole Kelner)

How should Limited Partners be thinking about the tailwinds that this federal policy creates?

Don’t look at the Inflation Reduction Act just in isolation. Look at it also in combination with the Bipartisan Infrastructure Law. Those two taken together are massive investments in the American economy, in places where we badly need those investments. The Infrastructure Act had many parts to it that were favorable for decarbonization, towards clean transportation and things of that nature. And certainly this act does as well. And so limited partners should be looking at this as the most massive public dollar investment we’ll probably see in our lifetime. It is really about trying to spur this transition to a clean energy economy.  And it starts with the public investment, but fits our thesis that this is the place we most need to be to make the impact we need to make regarding decarbonization.

(Image courtesy of Blackhorn Ventures)

Do you see this bill changing Blackhorn’s investment strategy, either for the short or the long term?

I don’t think so. That’s the interesting thing for me – this is the transition that we believed needed to happen. These are the sectors that need to be decarbonized. Our thesis is about the fact that we will have an impact by investing in those companies that are going to manage this energy transition. We are going to invest in companies that say, for example, “This is a massive transition for utilities. How can we do that and do it smoothly?” We have an opportunity to modernize the grid in a way that has both sides of the meter talking to each other, and helping grid managers ensure that they’re living up to all their ambitions with respect to their renewable energy goals and their emissions reduction goals. There’s a great deal of grid modernization that has to go on. We’re investing in companies that are going to facilitate that. And the same goes with the built environment. The built environment is 40% of our emissions, and we really are going to get to the kind of emissions reductions that we promised as part of our participation in the Paris Accords. If we’re going to do that, we have to impact the built environment in a positive way. And so that’s going to be people thinking about building materials, but it’s also going to be people who understand that managing the activities in a building site, or managing the meter inside of a building, or rethinking how you plan to increase the efficiency of the building, is all part of a decarbonized economy .

Is there a particular sector of technology that you think will see a particularly significant uptick thanks to the IRA?

I think we were already at a place where we were going to experience a fairly precipitous change in the electric vehicle market. You can see it building– it felt like we were coming to a tipping point. I think the Inflation Reduction Act provides the tipping point for that. With the level of tax credits that are available both for new and used electric vehicles, I think we’re gonna see something fairly dramatic. And I believe that’s true not just in the light duty vehicle market, but in the medium size and heavy duty as well.

(Image courtesy of Blackhorn Ventures)

What  advice do you have for startups in this space seeking to navigate the IRA and take advantage of the funding coming down the pipe?

Well, startups shouldn’t bend their vision around the Inflation Reduction Act. They should actually ensure that they have a fundamentally sound solution that can be commercialized. It’s not hurtful to have these kinds of public dollars available. But I hope that founders don’t believe that they should try to mold their concept to what the Inflation Reduction Act says, because anytime you have a space like this, you’re using kind of a blunt instrument. I mean, a tax credit is a fairly blunt instrument. And so if I’m a founder, and I have a startup, and I’ve got a new solution, my funding is going to probably start out in a way that’s relatively typical for venture capital funding, and over time, it might be able to take advantage of some byproduct of the Inflation Reduction Act, but probably not in the first instance.

Would you be able to give us a bullish and a bearish scenario for how the IRA affects us?

The bullish side is, I think that because this act covers the sectors that we care about most, because it’s about decarbonization, it fits hand in glove with our narrative. And so, if everything were to go perfectly, this could make just a tremendous difference in our ability to address climate change in the short term, and have a tremendous positive impact on our portfolio companies and the companies we will invest in over the next year or two, because our thesis remains about these sectors. The bearish part of this is that this is all really big. It comes on the heels of the Bipartisan Infrastructure Law, and it requires the federal government to do a great deal that it’s not to date capable of doing. New offices have to be stood up – for the infrastructure act alone, the Department of Energy had to stand up 30 new offices to manage the dollars that are going out the door. And so it’s not to fault the federal government. It’s just that the two came together very quickly. I think it would be fair to say that today, as the Act has just passed, we don’t have either the personnel nor the organizations within federal agencies to get this out the door. Now, we have to build that. the bearish scenario is that we don’t build it right. It takes longer to get out the door. There’s a lag time that impacts investors in a negative way because the returns come later down the road, but it also takes up precious time with addressing environmental issues including climate change. So the most bearish thing, the biggest concern I have about this is whether the federal government is fully equipped to do what’s necessary to make this money as impactful as it needs to be both from an economic perspective in reducing inflation and growing the economy, growing American jobs, but also in a climate/ environmental perspective, and addressing carbon in a timely fashion.

(Credit: Rocky Mountain Institute)

With the recent passage of the CHIPS Act, it seems like America has embraced some bipartisan action regarding industrial policy. Could you speak to the effect of the CHIPS Act, and the importance of good industrial policy in general?

People who feel we lost our leadership role as a manufacturing economy were in part right about that. I think we still manufacture a lot of things in America, our manufacturing economy has played such a significant role in our economic well being. But we’ve also not done as well where things like chips are concerned, in maintaining our lead in high tech manufacturing. Other countries have done well in that – it’s not like we’ve forfeited our position completely, but I think the CHIPS Act is going to allow us to reestablish our leadership position. That’s important for a couple of reasons. Obviously, it helps grow the economy, we’re becoming more and more of a software driven economy. But in addition to that, it would appear that the legislation is going to incentivize jobs to stay on shore. And finally, it hopefully resolves a problem where the supply chain is concerned, because I think there were a lot of different issues around supply chains and chips, and this hopefully will impact our ability to have chips available, and not have to rely on other foreign countries to provide them for us.

(Image courtesy of Blackhorn Ventures)

You’ve been around the block as far as climate legislation is concerned. What is it specifically that makes this time truly historic?

I’d say the first thing is the amount of investment that is involved. When I was Governor of Colorado, we went through the Great Recession, and we had the American Recovery and Reinvestment Act. And the total amount of investment in clean energy was $90 billion. And President Obama was very much a person who believed that we needed to address climate change and clean energy. This time, first of all, it’s 14 years later. The issues that impact us related to climate and the environment are significantly more pronounced than they were 14 years ago. People who are looking at the clock and thinking about the window we have to address this have shortened the timeframe within which we have to act. So there’s far more money, but that money is tied to the urgency that we have to act. It’s also concentrated in places where we’re pretty confident it’s going to cause people to invest at a deeper level on the private side and help us to make that transition from a carbonized economy to a decarbonized one.

I’d like to add that this bill really does more from an environmental justice perspective than any piece of legislation that I can ever remember. The kinds of ways it incentivizes to build out energy efficiency and low income neighborhoods, the things that does to ensure that power delivered to low income neighborhoods is clean power, is remarkable. There are a variety of incentives for transportation to be carbon free, and that transportation be available to low income people and people who live in marginalized communities. This legislation does more than any other thing I’ve ever seen in that regard. And that is also how we should think about our energy economy in transition, that this time, we should leave no one behind.

Is there anything else that you think is important to keep in mind as we’re going forward?

The IRA is being called a climate bill– but there’s nothing in the bill that puts a limit on emissions. There’s nothing that requires a reduction of emissions. Nothing like a clean energy standard, or when there was the Clean Power Plan. Prior legislation had that, this legislation does not. So, you know, we really have to work very hard at ensuring that the incentives work, that American consumers and American workers are fully participating in this and that the parts of this that are about environmental justice also are being fully executed. I think it’s incumbent upon all of us to do that and not just rely on this as legislation that was passed and will now address climate. It actually doesn’t do that without full participation of the American worker, the American consumer.

Could you start by walking us through your experience, how you ended up at Blackhorn, and what each of your previous experiences taught you?

I started my career as a big company guy. I spent six years with McKinsey and Company and then five years at Becton Dickinson, a $20B medical technology company. I had wonderful experiences there, both on the strategy side and then eventually as an operating person. But in 2000, the entrepreneurial pull was too great. I moved to Silicon Valley and worked as an operating leader in four different entrepreneurial companies, in telecommunications and then in medical technologies. At my heart, I’m someone who loves to learn. In a startup, you are faced with decisions all the time, and you can figure out, sometimes within minutes, generally within a week, whether that decision was good or bad. I really love that this allows you to learn iteratively, both intuitively and analytically, and very, very quickly.

Working at a startup can be quite challenging, what was the most important skill that you think it taught you?

I think the balance between making decisions extremely quickly, which is an instinctive thing to do at a startup, and making decisions methodically is very interesting. It really does depend on the situation, depend on the company, depend on the magnitude of the decision. Eventually, you learn, and you figure out how to make decisions at the right time. I think a lot of entrepreneurs have tendencies that they may not be aware of to make decisions either too soon or too late. There are lots and lots of examples of that which I’ve seen throughout my career.

What advice would you give to a first time founder who’s really interested in becoming an entrepreneur, but isn’t sure they’re ready to leave their day job and go for it?

I think a lot of these lessons come from my experience as a lecturer teaching entrepreneurship, first at the Haas School of Business for about 10 years and now at Stanford for 10 years. I’ve seen a lot of aspiring entrepreneurs, while I’m teaching them and then for years afterwards as we stay in touch. My biggest piece of advice is that there is no definitively right or wrong time to start a company.

For most people who are entrepreneurs, they will be more effective entrepreneurs if they also get experience working at companies that know what they’re doing. They will learn what works, what doesn’t, and what they should adopt in their own venture. By working in a larger company, you’re going to develop more skills, and most likely you will come up with an idea of a company to start.

Conversely, if you have a great idea that is calling you right as you’re leaving school, and you have the beginnings of a team, and people are following you, by all means start the company then. You might wind up working at a larger company afterwards, and then you’ll be better at doing that. If you think two or three chess moves ahead in your career, it’s kind of freeing. You realize, “Wow, there are different ways I could move on this board and still wind up where I’m where I’m trying to get.”

If you have a compelling idea then by all means go for it. If you don’t, by all means, go somewhere where you’re going to get experience. Go somewhere where you’re going to learn a ton, and then you’ll bring that to whatever you wind up doing as an entrepreneur.

What drew you to teaching?

I’ve been a teacher at heart ever since I was a little kid. I’m the oldest of four boys in my family and have always enjoyed mentoring and teaching. I think I have been a teacher in everything that I’ve done. I left McKinsey after my first two years to teach high school math and coach tennis and soccer which was a wonderful experience.

I really try as a teacher to provide information or ask questions to allow someone to find his or her own approach, rather than say, “Well, this worked for me, so it should work for you.” What I really love is helping figure out what would make the most sense for that person in that situation in that industry at that time. Overall, I enjoy helping great people achieve great things, whether that’s teaching, mentoring, or advising in whatever way I can.

Do you think that experience as a teacher affects the way that you approach venture capital?

Yeah, I think that approaching things as a teacher or as a mentor is a good mindset for venture capital. I don’t believe that venture capitalists or investors are literally “on the team” like some people say. They aren’t there with the founder and the founding team putting in 80 to 100 hours a week for that company. Thus, I find it presumptuous of somebody who’s an investor and gives advice, or money, or governance to feel as though they’re part of the team. I prefer to be a sounding board and available to help the founder when they need help…in whatever way they need it.

Nonetheless, I do feel as though I develop a fairly deep trust-based relationship with the CEOs that I work with, that I’m somebody they can call when things aren’t going so well to help them come up with the best answer for them. It also helps that I have been an operator, and I’ve seen some of these movies before, so I can help them see around corners. These are relationships that go beyond a typical VC-CEO relationship. In order to be a reasonable sounding board for someone, it certainly takes a lot of extra time and energy because you need to have a decent amount of context about what’s going on. It’s not something that you can do episodically once every quarter at a board meeting, or even once a month. You need to have much more frequent interactions to have the right context to be helpful. I’m thrilled that Blackhorn Ventures has given me the opportunity to do that as an operating partner. I really appreciate them for putting me in a situation where I can do that successfully, and allowing me to spend the extra time and energy with the companies that I work with.

Which portfolio company are you particularly excited about?

That’s a tough one because there are a lot of really exciting companies in the Blackhorn portfolio. One that immediately comes to mind is Aperia Technologies. Their idea is just brilliant. They attach a device to truck wheels, which uses the rotational motion of the truck wheel to create enough pressure to keep the tires inflated to their optimal pressure. It’s a very simple idea, and these folks have developed a fantastic device that does this really well. The company is growing two to three times per year, and they now have billions of miles on the road. Their approach also has predictive value for trucking companies because they can monitor when a tire is having trouble, and when it’s having serious trouble and needs to be replaced. They’ve been able to develop a sales system for very large companies, and they’ve landed a number of really great accounts in the last couple of years. It’s just poised to be just wonderful.

It’s a combination of a deep technologist and a technologically oriented CEO as co-founders. They are an amazing group of people. What I’ve appreciated the most about working with them for ten years is that their values, their principles, and the way that they do things are extremely aligned with our values and principles at Blackhorn. It allows me to again be a very close advisor to them because I can very much relate to how they do things.

Aperia is also a classic Blackhorn Ventures company in terms of its position at the intersection of multiple areas that Blackhorn has a perspective on. It’s an energy oriented opportunity. It’s a transportation oriented opportunity. It’s a supply chain oriented opportunity. It’s a precursor to some autonomous capability because your ability to track and measure things like tire pressure is on the path towards that. So there’s a bunch of areas that all come together, and Blackhorn Ventures does an effective job of having perspectives in individual arenas, but also then having perspective on how those arenas come together. That way we can make better decisions about what makes sense as an investment based on those intersections.

What do you think is most valuable for founders about working with Blackhorn?

Well, I’m really big on principles. Similar to Ray Dalio’s approach of having principles of how you want to run your firm. Blackhorn Ventures has adopted certain principles about how we work with founders, how we behave in Board meetings and in between board meetings, how we comport ourselves in the investing process, and how we continue to support companies as they continue to succeed. It’s an approach that resonates well with entrepreneurs. It’s easy for an investor to say that they are founder friendly, and many of them will have that on their websites. For some firms, founder friendly means that they let you keep your stock when they fire you. What you’ll notice with Blackhorn is that the founders that we work with are excited to work with us again. If you call up a few founders that we’ve worked with, you will find a group of people who appreciate the principles that we bring to our relationships with them.

What is it about Blackhorn that you enjoy most?

So the obvious answer is the team. I was trying to come up with a less obvious answer, but I will just say that everybody associated with Blackhorn Ventures is a well meaning, thoughtful, principled person, and someone that I truly want to be a partner with.