Greetings to 3k+ Impact Supporters! 🌍 It’s August Solliv 👋 Today’s article and podcast are part of The Impact Highlight Series - a podcast series that I run with EUVC (Andreas Munk Holm) and ImpactVC/Better Society Capital (Douglas Sloan & Ellie Broad) where we are starting with 10 interviews with some of the most prolific impact investors in Europe. In this series, I don’t write a full article as you have been used to, but you get all the show notes from the interviewee below 🥳
We dive into what it took to launch a new kind of impact fund, the lessons learned from backing 3 unicorns, and why founder learning velocity is Jon’s No. 1 metric for long-term success.
Agenda:
Jon’s journey from analyst to co-managing partner at MMC
Launching Eka Ventures: why impact needs its own home
Choosing the themes: consumer health & sustainable consumption
Building conviction around shared value
Distribution in health: why access is half the battle
Generalist vs. Specialist: where Eka fits in
Fund I analysis: what worked and what didn’t
Operating in the “real world”: why it’s harder, but worth it
Lessons from unicorns and founder growth
The problem with how VCs evaluate “team”
A look at the person behind - who is Jon Coker?
…Engineering degree, love of sport, close family, first job in finance. Bringing that all together.
…started in VC in 2007. Early employee at an angel syndicate. MMC Ventures. 11 years of learning in generalist VC
…believed VC needed to do a few things differently. To think more about the long-term impact of the companies they back and to go deeper into people assessment. Set Eka up with three core principles: Shared Value, Consumer Tech, and Founder Assessment.
The first line on your website is “We invest in founders creating positive system change” – what does that mean? Would you argue that all impact startups create systems change, or is it something special?
The thesis is the system change, and the companies are the building blocks of the change
Two themes: consumer health is the change from a reactive healthcare system to a proactive one that focuses on helping people stay well. Sustainable consumption is a shift from a linear, carbon-intensive and wasteful system of consumption to a circular, decarbonised and efficient one. Both of these systems are lower cost / higher margin and better for the lives of the underlying customer.
Your investments focus on creating positive impact in the climate and health sectors – that is a broad scope within impact. What is it specifically?
…it sounds broad, but it is actually quite narrow in the two themes I answered in the previous question. When you add the consumer technology lens, we are very specific in what we understand and invest in.
…the level of expertise we have in both venture and consumer technology is significantly different from most other funds investing in impact at seed. When coupled with a scaled fund that allows us to price and lead rounds, it means that we have a very differentiated position in the market.
… in Fund I, 70% of the investments we made did not have a competing term sheet. So there is clearly a gap at Seed for what we do.
Eka Ventures in “shared value“ - what is it? And how do you use the concept?
…shared value is the creation of economic and societal value in parallel.
…reducing food waste in grocery is a great example here. If it is done in a way that doesn’t impact demand, then it both improves margin for the retailer and reduces the environmental impact of food. Early diagnosis in health is another obvious example.
…we believe that waves of technology unlock shared value opportunities that don’t exist for the incumbents. That is why we exist as a fund.
You’ve invested in venture capital for over fifteen years, including backing two companies that have gone on to become unicorns – what are your business-building lessons from that time and from those investments?
…the most important is the founders. And as a VC, not just saying you are looking for great founders, but actually thinking about how you will assess that.
…there are certain behaviours that have been consistent in the people I have worked with who have built extraordinary businesses. The way we assess founders is built on this.
…this need for exceptional leadership is just as important in impact as it is in venture, but we don’t see many impact funds lead with that. That is what we want to do differently.
What’s your best tip for generalist VC investors about impact?
…impact isn’t an investment thesis in and of itself. VCs need to decide where they are going to be experts and then build on that. We decided that at Eka, our core objective is to identify investment themes that would deliver impact and value in parallel. We end up co-investing with a lot of generalist VCs because the value opportunities are huge.
…impact processes are very different from ESG processes, but they often get confused by generalist VCs. Impact is what the company does, so the processes need to scale carefully with the company and be deeply embedded in your core decision-making processes.
What’s your best tip for other impact VC investors?
…don’t lose focus on the importance of exceptional leadership. It is easy to get tied up in the idea of impact because it can be so compelling, but without great leadership, the company won’t scale, and without scale, there is no impact.
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