Today, we publish an interview with Ger Goold, a Partner withIrish venture capital firm Kernel Capital. He a has a finance background and joined Kernel in 2009.
Ger focuses on Early Stage and Series A investments and recently led investments in Altratech and Tapastreet. Directorships include MPSTOR and BioAtlantis.
Prior to joining Kernel Capital, he worked in the energy sector in Queensland for a period, particularly focused on M&A transactions, and previous to that he spent 6 years with KPMG where he managed services to both Nasdaq-quoted multinationals and Irish tech startups.
FinSMEs: What’s Kernel Capital? What’s the investment strategy?
Ger: Kernel Capital is a venture capital firm with offices in Cork, Dublin and Belfast, managing the Bank of Ireland Kernel Capital Venture Funds which are one of the largest and most active sources of equity finance for technology companies on the island of Ireland. Our strategic alliance with Bank of Ireland and our network of over 80 institutional portfolio co-investors ensures Kernel Capital delivers an ‘access to funding’ continuum for all stages of company growth. To date, our team of six fulltime Partners have raised €173m in venture capital funds, the latest being in 2013; have led over 100 investments; and have assisted our portfolio companies to raise over €500m in equity and debt funding. The Bank of Ireland Kernel Capital Venture Funds are independently managed by Kernel Capital. We leverage our extensive network to enable our portfolio companies recruit the highest calibre people, to break into new international markets and to generate revenues of scale. Our portfolio companies employ over 1,100 people on the island of Ireland, almost all at graduate and post graduate level.
Our investment focus and expertise is on Information & Communications Technology and Engineering. Within these sectors we invest primarily in patent and ‘know how’ driven knowledge based companies, where the company promoters can demonstrate to us their vision and ability to create compelling new products and services. Our primary focus is on leading institutional Series A investments in the range of €1.5m to €5m.
FInSMEs: Personally, what do you like to see in startup founders? What don’t you like to see in them?
Ger: We aim to partner with resilient people of exceptional vision and ability from first time founders to seasoned entrepreneurs – pioneers who innovate and create new products and services. We like a demonstrable ability to access a sufficiently large market, or at least an understanding of the challenges to be overcome. We don’t expect founders to have all the answers, but it is important to have an appreciation of the questions. And no matter how technical the team is it needs to listen to the market and be focused on why their product will be bought.
FinSMEs: Today, a new wave of thematic funds is raising. In your opinion, can it result in a real advantage for the industry and for backed companies?
Ger: As the European VC market matures greater specialisation is to be expected as domain expertise deepens and new funds aim to differentiate their market offering. We are therefore likely to see more thematic niche funds launching, however the underlying market needs to be of a sufficient scale to support such funds e.g. you reference station12, which is targeting a $250m raise focused on European Media tech. At Kernel Capital we invest across the island of Ireland with a focus on ICT and Engineering, where we have deep sectoral expertise and a successful track record which allows us to bring clear value-add to our investees. Importantly this is a market where we see excellent deal-flow opportunities and where we are clearly differentiated as a market leader; this works for us. Specialised thematic funds is a strategy for new funds to segment the market, not a new concept. The VC market is no different to any other market, each participant decides on how to tailor their offering to the market in the context of their particular skillsets, something we have always done at Kernel Capital to some considerable success.
FinSMEs: Speak about some trends…fintech, IoT, wearable tech, virtual reality, etc. Which one do you bet on?
Ger: We get most excited by great teams with great products addressing large markets which they can credibly access. What those specific markets are is of less significance, and quite often by the time a particular market is trending the value investments have passed. Saying that, we are currently in the process of closing an investment in a company targeting an emerging market in the fintech space; the broad IoT space is an area we have been investing in with years, with a particular focus on upstream processes such as investees FeedHenry, enabling enterprise-mobility, and MPSTOR, who are providing disruptive software to the data-centre; while an existing investee Lumafit are in the middle of a very successful Kickstarter campaign for the launch of its fantastic wearable tech product. So all of the above and none of the above!