By Yvonne Hyland, Head of Portfolio Business Development, B Capital Group

Executives overseeing IT and innovation at large companies are always looking for ways to gain an edge in their industry – whether by streamlining internal processes or adopting new technologies. That often means turning to outside partners – and the best of which can be under-the-radar options still new to the market.

So how can business technology leaders find the right startups to meet their needs, and get the most out of those relationships? 

The Fairfield-Westchester chapter of professional organization Society for Information Management (SIM) held a roundtable to discuss. Featured speakers included B Capital Group General Partner Karen Page, AI startup TruEra CEO Will Uppington, and North Andover Investors Collaborative (NAiC)’s chairman, Joseph Puglisi – a former Chief Information Officer, who led technology in a number of companies.

Centered in their conversation: What makes for a strong and innovative technology partner; and how CIOs and their companies can not only leverage startup technology, but grow with it. 

What investors look for in startups

B Capital General Partner, Karen Page, used the analogy of a rocket for describing how the VC firm chooses investments, where the rocket is the company and its founder or CEO is the captain.

“It’s really a simple basic premise: When we’re looking at companies, we want to know, is that founder supremely experienced and capable? What has given them the right to win in a particular space?” Page said.

For example, when B Capital invested in TruEra, the firm looked at the caliber of the startup’s leadership team – including their CEO, Uppington – as well as the company’s strategy for claiming its piece of the $62 billion AI market. 

TruEra makes it easier for data scientists to understand and explain why a model is giving a particular prediction. This visibility is necessary for quality control, especially for AI software involved in use cases where there are real stakes. These stakes might include the need for activities managed by AI software to align with regulations, or it could relate to critical enterprise activities that depend on AI software of large scale. 

“You have a lot of people wanting to use machine learning, but feeling like they don’t have the governance or safety or methodologies or best practices in place to make sure that, if you do move something to production, you’re going to be able to maintain that quality and performance over time,” said Uppington. 

Puglisi, with NAiC, noted that investors also use their own industry expertise as current or former executives to judge the product itself. 

“We look at the competitive landscape, we look at the management team, we’re looking at go-to-market strategy. And the one other thing we look at is the product or service itself,” said Puglisi.

How CIOs can get involved with startups

IT leaders can get involved with startups as customers, as advisors, or as angel investors and through other routes.  

“It could be informal. Oftentimes, an angel investor might become an advisor to the company, and they might spend a few hours a month with the founder” or others on the startup’s leadership team, stated Page. 

“A more formal route could be joining an advisory board made up of CIOs at customer companies, or at companies that are considering becoming a customer of the startup. 

Puglisi emphasized the value of accessing emerging startup products. “It’s wonderful to have visibility into new technologies that are coming out before they’re generally available, or before their general release,” he said, adding that early users may also get a break on pricing. 

IT and innovation executives “play an important role in the informative side of the growth of a business,” Page said. 

What startups look for in CIO advisors

Before you can jump into any of these roles, startups will want to know what you bring to the table.

“It’s about filling in gaps or helping you build the business in some way,” said TruEra CEO Uppington.

He said startup leadership teams could be seeking an advisor with specific domain expertise that the team lacks; or the startup could be looking for support in building a pipeline for onboarding new business. 

“Driving deals and leads is probably the most valuable thing that any startup really needs,” said Uppington.  

CIO knowledge of the industry landscape and connections come in handy. 

“One of the most difficult things for an early stage company to do is all the things they need to do. There’s too much to do, right?” said B Capital’s Page. “You’re juggling all of this at one time. The more you can pull people in around you to be mentors and advisors, the better off your company’s going to be.”

For introductions to TruEra, other innovative startups, or to join the B Growth Network, contact us.