Mentor insights with Johanna Campion
Johanna is Venture Partner at the ATI Boeing Accelerator. As part of our ongoing effort to profile stakeholders involved in the programme, I recently sat down with her to discover what her cross-sector experience can bring to aerospace, learnings from her time as an angel investor/ startup advisor and her recommendations for founders during COVID-19.
Prior to working with the programme team and I, Johanna spent 25 years in investment banking providing strategic advice on mergers and acquisitions, IPOs and other capital raising with a particular focus on media and telecom.
After leaving banking in 2015, she moved into angel investing and working with startups. We first met when I was fundraising for my previous business, and then worked together on a few Ignite accelerator programmes where Johanna was an investor and/ or mentor.
Today, Johanna has a broad portfolio of roles (including a NED at Web Financial Group SA, a board seat with Hiveonline and, most recently, Chair at QStory), activities and investments. She’s an invaluable part of the programme team, whether that’s been supporting Gabriela, Ksenia and I or working 1:1 with our cohort.
Outside of her work on the ATI Boeing Accelerator, she continues to mentor on other accelerators and is an investor in 40+ early stage companies.
You’ve worked in various sectors including technology, media and telecoms. Why aerospace and why now?
My introduction to aerospace was as a little girl, visiting old airmen, some of whom flew in WW1, in and around Southampton as part of a campaign to get a blue plaque put on the former home of Bert Hinkler, the first man to fly solo from England to Australia in 1928. I still have the photos some of them gave me of the planes they built and loved in the 1920s and 1930s.
Today, building planes is a huge and sophisticated industry. Aerospace is a large and valuable part of the UK economy but has not yet got the same reputation for innovation as other sectors (such as fintech) and few startups target aerospace as their primary client base. So the opportunity to get involved to help change this intrigued me.
I saw a lot of corporate innovation — whether by investment, partnership or acquisition — up close in my professional career. Aerospace has the same need for innovative solutions but many entrepreneurs, who could bring great solutions, find easier paths to get started in other more accessible industries.
So it seemed a timely initiative to launch the ATI Boeing Accelerator, and build a entrepreneurial ecosystem focused on aerospace. We’re doing so by bringing together corporates and founders, investors and government to change the pace of aerospace innovation and create some aerospace champions of the future.
What can aerospace learn from an industry like TMT?
The speed of innovation brought by new technology transformed the TMT landscape beyond recognition.
For me, there are 3 key lessons from the companies that both survived and thrived:
- Start early, educating leadership teams about the challenges and opportunities that each new technology would bring so they could take the right decisions
- Understand your vulnerabilities and opportunities and move quickly to address them
- If you can’t build it yourself then buy early and invest in the future; not defending the past.
“We’re building an entrepreneurial ecosystem in aerospace by bringing together corporates and founders, investors and government to change the pace of aerospace innovation and create some aerospace champions of the future.”
In aerospace, the combination of cutting-edge technology, long product life cycles, heavy regulation, and complex manufacturing create a barrier for startups to easily see where they could fit. The aerospace companies have to help to make it easier and more accessible to startups coming in from outside to effect change.
Creating standalone structures within large corporates to facilitate this transformation process — with the resources and power to onboard early stage businesses with relevant business or technologies as suppliers or partners or nurture new in-house initiatives — have proved effective in both in TMT and financial services.
What interested you about startups, and how did you get started as an angel investor?
I’ve always been very curious about how businesses really work. Having had the privilege of spending time with senior management at large multinationals and seeing their perspectives, I was very interested to get close to the cutting edge of how things were changing in the startup world and what that meant for what was coming next. I started with adtech and fintech as these were industries I knew well.
Before making my first angel investments, I spent a lot of time reading decks, watching founder videos, reviewing business models, taking pitch meetings and getting a sense of what is normal at this early stage. My first investments were very small, learning as I went along. I was able to build trust in my judgement, by listening to my concerns more diligently and finding fellow investors where possible to share perspectives.
“…Aerospace companies have to help to make it easier and more accessible to startups coming in from outside to effect change.”
How did you get involved in accelerator programmes, and what value do you see them bringing to the startup community?
My first involvement in an accelerator programme was as a cohort investor in Collider, a marketing and adtech accelerator. Sadly mine was not the most successful cohort they ran at least not so far! However, it was an invaluable experience both for the network of investors I met and what I learned from the companies in my cohort in understanding the challenges of running an early stage startup. I am also mentor for a number of Ignite, Techstars and Metro Hospitality Digital programmes.
I see accelerators playing an important role in the startup community. Properly resourced with a rich and deep network relevant to their focus, they can be game changing for startups — and for corporates looking for innovative solutions. Not just for the active cohort but also for the network benefits of accelerated corporate access, both formally and informally, sharing of knowhow and providing a nexus to bring a specific community together whether by geography, sector or technology.
For investors, they provide useful screening as there is, as we saw with our first cohort [268 applications for 9 places!], tough competition for a place on these programmes. Many of them accelerate corporate access, which helps both validate the business and reduce time to market. This then contributes to making the startups more investable earlier in their journey.
“I see accelerators playing an important role in the startup community. Properly resourced with a rich and deep network relevant to their focus, they can be game changing for startups…”
As an early-stage investor, what do you look for when assessing one of your investments for follow-on funding?
In looking at whether to invest in follow-on rounds (aside of whether I have cash available at that time), the most important thing is how they have communicated since my last investment and how transparent have they been about both positive and negative developments.
This drives my level of confidence in what they are doing and how do their prospects today line up against other opportunities on my desk. I have participated in 4 or 5 rounds for several of my companies, whereas for some others I have stopped after the first investment.
From your most successful investments, what does a good founding team look like?
It took me a while to really understand what good looks like. There are lots of people that are really impressive at pitching but not so good at the nuts and bolts of running a business on a shoestring.
For me, a good founding team has strong relevant skills for what they are planning to build and a clear understanding of any key skill gaps in the team and how they will plug them. Ideally, they will have clear evidence of why they are the right team to solve the problem they are focused on and why this is a problem worth solving.
I also look for coachability as accepting inputs from mentors, shareholders, advisors and consultants along the way can be very powerful.
I am also happy when I see experience of running a business in the team — as there is only so much a founder has time to learn along the way!
Lastly, but very fundamental for me, the team need to gain and retain my trust: both by how they conduct the conversation with me and in what they do afterwards.
“A good founding team has strong relevant skills for what they are planning to build and a clear understanding of any key skill gaps in the team and how they will plug them.”
Do you have any advice for founders raising their next round of funding?
- Tell your story in really simple language so anyone can understand what you do.
- Highlight what validation you have of what you are doing and what commercial traction you have so far.
- Have a clear explanation of how long the amount you are raising will last, what metrics or milestones will be delivered by then and why.
Do you have any advice for founders looking to work with corporates? What’s worked (and what’s not worked) during your time with corporate accelerators?
I’ve learned a lot about working with corporates, and B2B sales more generally, both from accelerator work and also from the boards I sit on and from my portfolio companies. The lessons are fairly consistent but for early stage founders, the consequences of spending too much time on a project going nowhere are much higher.
Both sides need to come to the table with realistic expectations on what can be done and by when. Checking this early on saves a lot of wasted time, especially for a founder who needs contracts in place to raise money soon. Taking the time in early meetings to confirm if there is budget for this year for this project and when is the cutoff date to use that budget by and continuing to confirm that this money is still available as the project unfolds etc.
Another key to avoiding bad surprises is mapping the decision making/ procurement/ onboarding process for each client project (in detail as it varies lot even within the same industry) to understand exactly how to get to a signed contract, how to go live and when payment will actually arrive. It sounds obvious but, in my experience, the process is always slower than advertised — even when the value proposition is compelling.
B2B investors understand this dynamic and will expect guidance as to how it works specifically for your product and client base and how this ties in to how much money you are raising.
From your investment banking experience, what does a good exit look like — whether M&A or IPO? What do early stage startups need to think about (if anything) about getting to that point?
For most very early stage investors, any exit is a good exit!
More generally, a good exit provides a home for the business to flourish and grow, and rewards employees and shareholders who have supported the company thus far.
For founders, it is important to understand where you fit in your industry landscape and assess possible exit routes in light of that.
Depending on your business, an exit to an industry aggregator who does innovation through acquisition may be a natural step once you have a certain number of customers. If so, it’s worth keeping an eye on the potential buyers so you have a sense of when strategically they might need your business.
For others with compelling tech and a first class team but a long and expensive route to market, a strategic buyer may come very early when the team is very small and may not reappear til you have built something huge or run out money.
Sometimes it becomes clear that, due to changing market dynamics, the business needs to be part of something bigger rather than continue standalone and so needs to find a new home.
In these days of huge private market rounds, the IPO market seems to be relevant only much further down the line for most startups. M&A shows up at many different stages: from very early to post IPO and many points along the way.
As you think about what an exit might look like, it is worth building a relationship with one or more trusted individuals — perhaps a board member, senior advisor, lawyer, investor or successfully exited founder — who can get to know the business well over time and can support you effectively in working through these topics as a sounding board (or in a more formal capacity when the time arises).
Lastly, what advice would you give startups managing this challenging time with COVID-19?
Communicate! Not just with your teams every day, as I am sure everyone is doing, but with your various stakeholders:
- Informal chats with board members rather than wait for next formal meeting,
- Convene a regular shareholder update call
- Send out your newsletters/ investor update emails etc.
Share how the business is doing in this new environment: the tough steps you have already taken to reduce your burn rate for the current environment, the challenges and opportunities you are facing, when you are going to run out of money and take questions.
This can bring great ideas, offers of help, insights from other companies and builds credibility and manages expectations for whatever comes next.
For more information about the programme, please contact the ATI Boeing Accelerator team:
Gabi Matic — gm@atiboeingaccelerator.com | linkedin.com/in/gabrielamatic
Wil Benton — wb@atiboeingaccelerator.com | linkedin.com/in/fatkidonfire
Ksenia Kurileva — kk@atiboeingaccelerator.com | linkedin.com/in/kseniakurileva
Thanks to Ksenia for her help in pulling this all together.
