Working in a rapidly changing VC industry
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Based in Palo Alto, California, Chad originally came to NGP Capital from the investment banking world, where he advised growth-stage technology companies on their M&A, capital raising and restructuring strategies.
Ossi, who works out of NGP Capital’s office in Helsinki, Finland, came to the company with a background in management consulting, advising large companies and equity investors on topics ranging from portfolio strategy to business planning, commercial development, and due diligence.
Here they share a little about themselves, including their perspectives on working in a rapidly growing and changing VC industry.
Congratulations on your promotions! Can you tell us a bit about how you made your way into the VC world, and what you’re working on at NGP Capital?
Ossi: “I moved from management consulting to the VC industry, and I realize that this is not the most typical career move. But my study background was interdisciplinary, including everything from business and economics to engineering, media technology, and philosophy. In addition, I have always been fascinated by science and technology, and I wanted to move into a role that would allow me to immerse myself in those topics, while leveraging my management consulting skills. As it turns out, VC was the industry I didn’t know I was looking for.
"I moved from management consulting to the VC industry, and I realize that this is not the most typical career move."
“NGP Capital has given me the opportunity to do a lot of different things, including engaging with entrepreneurs, learning about new technology and markets, supporting portfolio companies, and doing financial modeling and scenario analysis for investment prospects. For the last couple of years, I’ve been working with the Intelligent Enterprise team on a variety of topics, including cybersecurity and computer vision.”
Chad: “I came to venture capital from an M&A advisory firm. I have primarily concentrated on an area we call “smart mobility”. This has become somewhat of a buzzword lately. At NGP Capital we define it as anything that involves moving people or freight.
“What I find particularly attractive about smart mobility is that the technological innovation in this space is often a win-win for cities, users, and the environment. Take our investment in the scooter and bike sharing company, Lime, for example. At its core, Lime’s approach to shared mobility creates a faster way to get from point A to point B, while expanding access to convenient transportation for every income level.”
What advice would you give someone who would like to make a career in the VC world?
Chad: “Based on my experience, there is no one path into the into the VC industry. Some people come from finance backgrounds. Others are former entrepreneurs or have operations experience in a specific industry. Regardless of how you get into the industry, I think it’s important to develop a clear vision about the type of companies and the investment stage (seed, Series A, B, or later, etc.) you want to work with. That will help lead you to the right company and platform. It’s a big space, and if you don’t have a vision, it’s easy to lose focus.”
What have been the biggest lessons you have learned at NGP Capital?
Ossi: “In the VC industry, you’re always dealing with risk and uncertainty. Any number of things can go right or wrong. But one thing I’ve learned is that the success of an investment – or failure, for that matter – is not random. As Series B and C investors, NGP Capital has the luxury of meeting with founders who have already raised millions of dollars and built businesses with $30+ million valuations. These companies tend to have some things in common, for example, a stellar founding team, a drive to solve big problems, and exceptional products and technology.
"But one thing I’ve learned is that the success of an investment – or failure, for that matter – is not random."
“The other thing I have learned has been how to assess the long-term potential of a company based on very limited data. It’s critical to talk to the company’s customers, try to understand customer preferences and behavior, and look very carefully at unit economics and cohorts.”
What do you look for when founders/entrepreneurs come in for a meeting at NGP Capital? What do you want to hear from a founder/potential portfolio company?
Ossi: “For me, it’s very important to understand how a founder thinks. The best founders I’ve seen are very clear and very articulate about describing their company and, perhaps more importantly, the value of their product or service to their customers. They are good at explaining not only the long-term vision of the company, but also the steps they need to take to reach that vision.”
"The best founders I’ve seen are very clear and very articulate about describing their company and, perhaps more importantly, the value of their product or service to their customers."
Chad: “Meeting with founders and entrepreneurs is one of my favorite parts of the job. It’s great to hear the inspiration behind someone’s decision to start a company. I find many of their stories are rooted in solving problems with deeply personal connections. For example, one entrepreneur we recently met with drew on their relative’s difficult experience with a long commute as the inspiration to launch a platform that would alleviate some of these issues.
“In addition to understanding a company’s mission, it’s also great to hear about the founder’s background in a particular market. Founders typically have deep thematic expertise, and I always appreciate listening to their perspective on their particular field of focus.”
Tell us a bit about yourselves personally. What do you do in your off time?
Chad: “Outside of job I enjoy reading, listening to live music, drinking wine and visiting hot springs.
“I split my reading about 50/50 between fiction and non-fiction. When reading non-fiction, I’m drawn to topics about which I have little background knowledge. This is a habit I developed in college, where I found that some of my favorite courses were on topics outside my sphere of knowledge. At NGP Capital, we often try to employ pattern recognition when examining a sector. I’m often surprised at the number of connections or inferences that can be made between two seemingly disparate subjects.”
"At NGP Capital, we often try to employ pattern recognition when examining a sector."
Ossi: “I’ve been into music all my life. I play prog rock/metal on the guitar, mostly for my own pleasure, but sometimes also with friends or performing in social events. Playing music is a complete body-and-mind experience that gets me fully immersed. And I love to tinker around with data and engineering. Recently I’ve even started doing some mobile development.”
How would you describe each other?
Chad: “Ossi and I often exchange views on Smart Mobility topics and how things differ in Europe versus the US. I consider him to be a consummate professional. He is always well prepared for whatever is on the agenda. It’s always worth an early morning call to hear Ossi’s insights.
“On a personal note, I understand that Ossi is a skilled morse code expert.”
Ossi: “Chad is very smart and knows the right questions to ask entrepreneurs.
“However, without a doubt, what I’ve learned to appreciate most about Chad is his deep knowledge of French natural wines.”