The Voice of the Entrepreneur

The Voice of the Entrepreneur

Interviewed by on April 29th, 2024

“What are the Wrong Reasons to be a CVC?” Conrad Burke posed to Nicolas Sauvage of TDK Ventures. He continued, “It’s a cool job, and it’s got a cool title, and you get to go around the world and eat cool meals, and everybody’s really nice to you? That would be a terribly wrong way to approach going into venture capital.”

As a VC investor and former entrepreneur, Conrad would know. In 2002, after the failure of his previous enterprise, he founded Innovalight, a nanomaterials company, in Sunnyvale, California. With his team, Conrad uncovered a use for his materials in solar panels during the rise of the solar industry. They raised about $60 million from investors and exited through an acquisition by chemical giant DuPont in 2011, making the venture a huge success.

Optical Background

Although he founded a nanomaterials company, Conrad is not actually a classic engineer by training. Instead, he has a strong classical science background as an applied physicist from Dublin, Ireland. In the late 1980s, Conrad left Ireland to lay the TPC-5, the first optical underwater cable between Japan and the United States.

After this project, Conrad joined AT&T, which later spun off as part of Lucent Technologies, a telecommunications company. There, Conrad designed, sold, and marketed optical components, lasers, and transceivers for the European telecom market. However, he did not stay long.

Becoming an Entrepreneur:

In Silicon Valley, telecommunication technology valuations were rising during a period of great ‘exuberance’. Conrad recalls, “Particularly in times like that, raising money during those periods was actually relatively easy.” Consequently, he moved back to Silicon Valley and started a MEMS (Micro-Electro-Mechanical Systems) optical switch company.

Unfortunately, Conrad learned a hard lesson. “It was a classic. Raised a lot of money, we’d filed to go public, and the telecom bubble crashed all around us,” he lamented. Companies like Lucent had rapidly scaled capacity to keep up with projections. Demand was projected to double every three months until it didn’t. In March of 2000, the markets crashed as projections adjusted to reality, popping the dot-com telecommunications bubble.

Conrad learned that “raising capital is not a measure of success.” When one takes money, they agree to a successful return for their stakeholders, employees, and investors. Since they had filed to go public just before the crash, they unfortunately got caught right in the middle of it.

Round 2

Despite his failure, Conrad was undeterred. In 2002, he was a jockey back in the saddle, founding Innovalight. In 2003, to pay the bills, he joined Sevin Rosen Funds to moonlight as a VC. This would not last long, as Innovalight gained traction, and by 2005, Conrad was working there full-time.

Although Innovalight’s silicon ink made of nanomaterials was proving to be a success, Conrad heard in the news that solar production was ramping up in China, so he planned a visit. Conrad remembers, “I came back in almost disbelief at the sheer scale of capacity being built in China almost being ignored, frankly, by a lot of my peers in the solar startup space.”

Instead of making more efficient solar cells, Innovalight opted to pivot to a licensing model. The Chinese market had a great deal of resources being funneled into it, which would make it difficult to compete. The licensing model was very different from what their early investors signed up for, but thankfully, the board agreed to shift the strategy.

Blind spots missed by managers can lead to unexpected pitfalls. Thus, Conrade recommends “to ignore what you perhaps you’re reading geopolitically. Get on an airplane. (For example,) fly to Shenzhen, go visit some companies and just see for yourself. And make a determination for yourself what you think is going on because not everything is reported in the news.”

The success of Innovalight following the pivot took no small amount of luck, insight, and guts. This time, Conrad managed to exit while the winds were in his favor. DuPont’s 2011 acquisition just missed a period of decreased valuations and cooling in climate tech.

The Right Reasons to be a VC

Following the acquisition, Conrad spent three years managing Innovalight at Dupont, although, like Lucent, he did not stay long there. In 2020, Conrad rejoined VC and founded his own firm, MetaVC Partners.

Armed with his experience, Conrad realized that the jockey is the most important factor when investing. “The person who’s going to ride this horse. It’s all about the entrepreneur and the founder. They can be the most brilliant minds, … but can you back this person to run this thing?” They need passion, conviction, and mental fortitude to run the enterprise for ten-plus years and cajole others into their company.

“Being a CEO, being a founder, it’s the loneliest job in the world. And I recognize that I’ve done it,” says Conrad. “(All issues) stop with you.” As an investor, in the early stages, one is responsible for coaching, mentoring, and listening. Call it therapy for want of a better term, but be available, especially as an experienced founder.

Conrad explains, “I find I draw tremendous energy hanging out with crazy entrepreneurs, doing crazy things, working late hours. I think that’s, it’s very fulfilling, and it can drive your day. It gives you energy.” According to him, that is the right reason to join CVC. Being an investor takes skill, long days burning the candle at both ends and a willingness to enter ten-year relationships with entrepreneurs. One doesn’t get a review of how they’ve performed until investments mature five to ten years later. Thus, one of the raison d’etre for being a venture capitalist has to be for the entrepreneur.

Looking Ahead

MetaVC Partners is not Meta’s investment arm, formerly Facebook. Conrad explains that the name was chosen when MetaVC was founded in 2020 to reflect the firm’s focus on investing in metamaterials.

The term “meta” comes from a Greek prefix meaning “after” or “beyond.” In English, it often signifies change or transformation. In the context of materials science, “meta” refers to engineered artificial materials composed of nanoscale structures that can interact with light in entirely new ways.

Metamaterials have a wide range of applications, including computing, sensors, biomedical devices, communications, and space exploration. Conrad is particularly excited about their potential in medicine, from drug discovery to advanced biomedical devices. One notable investment by MetaVC is in LeadOptic, a company that has developed tiny optics for a bronchoscope. This bronchoscope can navigate deep into the lungs to detect tumors or cancer with real-time imaging. Conrad remarks, “These clever entrepreneurs have come up with these remarkably novel ways to use what looks like now quite a simple idea of optics of getting deep into lungs and seeing things that could never be seen before.”