Silicon Foundry raises its profile with CVCs

Silicon Foundry started life as Sherpa Foundry in 2013, an offshoot of Shervin Pishevar’s and Scott Stanford’s Sherpa Capital.

Now it hopes to raise its profile as a builder of bridges between corporations and the startups that could have an indelible impact on their businesses.

“We’re helping them to identify potential targets (and) we’re helping them to connect with those players,” said CEO Neal Hansch. “We view ourselves as an extension of our members’ teams.”

Hansch said the goal is not just to gather information and insights for corporations, but to construct working relationships, including customer relationships.

Venture VC Q&A
Neal Hansch, CEO, Silicon Foundry. Photo courtesy of the firm.

One way it finds startups is with the help of Silicon Valley Bank, which invested in 2017.

As for Pishevar, he’s no longer involved in the business.

VCJ recently had the opportunity to speak with Hansch. An edited version of the conversation follows:

Q: How many corporates do you work with at present?

A: We work with over a dozen corporations. We’ve actually been at it for the last four years and have been quiet, if you will, working with a handful of corporates.

We opened up last year to start to invite in new members. And we’ve really been adding selectively at a pace where we are adding one or two members a month.

Q: Who are your clients?

A: It’s folks like Deutsche Telecom, AmorePacific, which is a major Korean beauty conglomerate, British Petroleum, Royal Bank of Scotland, Majid Al Futtaim, that is a large middle eastern shopping mall, entertainment, hospitality operator…and we even have the Michigan Economic Development Corp.

Q: What is the typical outcome of a client engagement?

A: I would say, not surprisingly, the most direct, straightforward outcome would be a customer relationship. A partnership would be a deeper, perhaps broader version of that.

There is some subset of members where we’re very clearly working with the corporate venture arm. In which case, obviously, the outcome there is primarily a strategic investment. Although maybe coupled with a partnership relationship and agreement. And there are examples of M&A.

Q: Are most of the startups you work with from Silicon Valley?

A: We find ourselves saying Silicon Valley, Silicon Valley, Silicon Valley quite a bit. I would say for most of our members that is the core of why they are working with us.

But when we have a member that wants to find the best drone delivery provider, that startup may be anywhere in the world. It could as easily be in Tel Aviv, or Toronto, or London, or Shanghai, as San Francisco or San Jose. Our work with our members spans all of those markets.

Q: Are there particular sectors where you have a special focus?

A: There aren’t. We get that question in nearly every initial conversation. We look at the world (for) disruptive trends, technologies, business model innovations, platform shifts, and those transcend any one sector, any one vertical.

Q: How does your business model work?

A: We charge an annual membership fee with a multi-year commitment, in most cases. This means we are not incentivized on a per-deal basis. We’re not pushing our members to do a deal so we get paid off the back of it.

The pricing is a mid six-figures-type pricing. For most members that’s the price of a full-time employee.

Q: You have an investment from and a close relationship with Silicon Valley Bank. How do you work together?

A: What they bring to the table in the partnership is relationships with literally thousands of startups and emerging companies. So as we are filtering for our clients, who are trying to identify the best players in the different categories they are interested in, SVB has those perspectives and those relationships.

Photo of questions and answers concept courtesy of masterzphotois/iStock/Getty Images.