Startups, VCs and Corporate Boards: Practical Insights from Darden Alumni
By Dave Hendrick
Husk Power Systems Co-founder and CEO Manoj Sinha (MBA ’09) started his innovative “mini-grid” energy company as a student at the University of Virginia Darden School of Business. More than 10 years later the company is accelerating construction of small power plants across India and Africa. After a recent infusion of capital via an equity investment led by Shell, the company is starting new power plants at a pace of about one per week, with a goal of developing 5,000 plants in the next 10 years.
Sinha detailed the ups and downs of his entrepreneurial journey during the 2019 Darden Reunion Weekend alumni founders panel, joining alumni at various stages of the entrepreneurial journey in reflecting on the unique challenges and rewards of starting and building a new venture. In addition to Sinha, the panel, sponsored by Darden’s Batten Institute for Entrepreneurship and Innovation and moderated by Techstars Farm to Fork Accelerator Managing Director Brett Brohl (MBA ’09), included:
- Erik Breuhaus (MBA ’14), CFO and co-founder of CounterFlow AI
- T.R. Harrington (MBA ’04), founder of Darwin Marketing
- Meg Greenhalgh Pryde (MBA ’18), founder of Brandefy
Pryde shared her experience taking her company, which helps consumers compare store-brand products to name-brands, through multiple incubators, beginning with UVA’s summer incubator program, hosted at the i.Lab and operated by the Batten Institute. She had recently returned from another accelerator in Cincinnati, Ohio, where she said she achieved a year’s worth of business development in three months. “Each accelerator and incubator helped us in different parts of our business,” Pryde said.
Breuhaus is working on his second Charlottesville-area startup, following a stint after Darden with PsiKick, a venture-backed Charlottesville company that develops ultra-low power, wireless sensing devices. His current company, CounterFlow AI, which offers a “next generation threat analytics tool,” recently closed a funding around. There’s a vibrant investing ecosystem in Charlottesville, Breuhaus said, with a “large number of people willing to support innovation.”
According to data collected by the Batten Institute, funding for ventures founded by Darden alumni has increased dramatically in recent years, jumping to $586 million in 2018. Even if funding is plentiful, finding top tech talent can still be a challenge. Breuhaus said Charlottesville is well positioned to develop a robust data science ecosystem, particular with UVA’s planned expansion of its Data Science Institute.
The importance of finding and retaining the right personnel was a recurring topic for the entrepreneurs. Harrington said conducting due diligence on potential new hires in China, where he founded Darwin Marketing, was exceedingly difficult. However, he said he learned to study candidates closely when asking them during interviews: “Would you have a problem if I called the last three people you worked for?”
Sinha said he initially prioritized product innovation when deploying capital, but he would prioritize placing the right people into the right roles if he could repeat his path.
Another message to the crowd of Darden alumni, many of whom had started or invested in ventures: If you’re interested in starting a venture, start a venture.
“I’m a huge believer and huge evangelist that everybody should try to start something,” said Harrington. “The world does not move forward without people starting new companies.”
Finding a Path to Venture Capital: People and Persistence
“I got into the venture business following the sale of my own company,” said Jonathan Ebinger (MBA ’93), a leading venture capitalist from Silicon Valley. “I took the approach that I enjoyed finance and numbers, and that venture capital would be a different asset class for me to explore. I quickly learned that as a VC, I spent a smaller amount of time on the numbers and almost all of my time on people.”
Sean Foote (MBA ’93), general partner of Co=Creation=Capital, also based in the San Francisco Bay Area, concurred.
“We invested in Pandora and the best thing we did for the company was to hire the recruiter who hired their CEO. That’s it,” said Foote. “We didn’t ‘do’ Pandora, the management team did. We try to remember our strengths.”
Ebinger and Foote, both longtime VCs from the Bay Area, were the featured speakers for a discussion about the venture business led by Sean Carr (MBA ’03), executive director of Darden’s Batten Institute. They discussed their respective pathways to venture capital after Darden, their current portfolio companies and their new fund, Transform Ventures.
Both Ebinger and Foote agreed that your value-add as a VC will vary based on the industry and at what stage you invest. Ebinger discussed Coupa, a company in which he invested during its infancy and saw through to its IPO in October 2016. “There came a time when I went to Rob, the CEO, and said, ‘Look, it’s time for me to step off of the board,’” Ebinger recalled. “’I helped in getting you to this point, but I can’t realistically add more value from here.’”
Carr asked the two alumni what industries they are most excited about now from the investor perspective. Leveraging data to improve customer experience across an array of industries was a clear theme. Ebinger spoke about a health tech company he has invested in that will allow users to input personal health and wellness data into a protected platform that can use the data to match the customer with the best health insurance policy available for their specific medical needs.
How should one go about getting into the venture capital business or supporting promising entrepreneurs?
“Corporate venture capital is a great way to get into this industry,” said Foote. “It is the fastest growing vertical within venture capital, and a sector that has seen a lot of positive momentum over the past two years.”
Foote also suggested that experienced industry leaders look at ways to mentor and advise entrepreneurs, and explore angel investing as an avenue of support for early, promising ventures.
Foote and Ebinger have developed their own way of supporting UVA’s entrepreneurial ecosystem through Transform Ventures, their new, later-stage tech fund that leverages affinity for the University to access the best companies in often competitive financings. They plan to donate their general partner profits back to UVA.
Key to Joining a Corporate Board? Don’t Burn Bridges
At a panel devoted to serving on corporate boards, four high-profile alumni shared their experiences and views on the current role of corporate governance. The panel, moderated by Jen Coleman, executive director of the Armstrong Center for Alumni Career Services, included:
- Cathy Friedman (MBA ’86), director of Altaba Inc., Radius Health, GRAIL and Lyell Immunopharma
- Naren Gursahaney (MBA ’89), director of NextEra Energy and ServiceMaster
- Michael O’Neill (MBA ’74), former chairman of the board of CitiGroup
- Doug Scovanner (MBA ’79), director of Prudential
Gursahaney, who previously served as CEO of ADT Corp., said when approached for director positions, he considers three chief factors: Is there something I can bring to the table? Can I learn from other board members? Is the culture of the company and the board a good fit?
While board members are rarely held personally liable for corporate malfeasance, Gursahaney said one shouldn’t discount the reputational risk of serving on the wrong board.
As to how to land a board spot, Friedman said to start from a position of “never burn a bridge,” noting that some of her board spots began with word-of-mouth endorsements from colleagues from 25 years ago.
If you don’t maintain the reputation of being someone who is good to work with, you may not be in the consideration set when board positions open up, Friedman said.
Friedman told the audience to consider joining a nonprofit board as an entry into the world, and not to discount the simple act of telling colleagues that you’re interested in serving on boards.
On today’s corporate boards, it helps to have a differentiated and highly desirable skillset, O’Neill said, noting the importance of risk management experts to banking boards, for instance.
The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D., MSBA and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
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