Ask A VC — Christina Bechhold, Investor at Samsung Global Innovation Center & MD of Empire Angels
by Elizabeth Galbut (@design4innov8)
“Ask A VC” is an interview series by SoGal Ventures, featuring prominent venture capitalists around the world. We hope to inspire diversity in the tech community — empowering our generation to grow into exceptional entrepreneurs and investors.
Christina Bechhold is an investor at Samsung’s Global Innovation Center in New York, focused on early stage investments in software and services. She is also Co-Founder and Managing Director of Empire Angels, a member led angel group of young professionals investing in technology startups with a focus on supporting young entrepreneurs. She is a regular contributor for the Wall Street Journal on startups and small business, a mentor at The Brandery and Venture for America and a member of VFA’s Women’s Initiative Committee.
Christina was previously a Vice President at Citigroup with background in capital markets, emerging markets and structured finance. She serves as Chairman of Hope on a String, a non-profit, grassroots organization that seeks to foster an environment of social transformation and economic development in Haiti through participation in music as well as Vice President of the Board of Governors of the Hotchkiss School Alumni Association. In her spare time, she’s an avid golfer, tennis player and adventure traveler.
In the past five years, we’ve seen many large corporate technology companies entering the venture capital arena. Samsung’s Global Innovation Center business model is quite unique. What differentiates Samsung’s strategy? What characteristics make a venture the right fit for the Samsung Accelerator program?
Samsung is a company that is deeply dedicated to innovation — in 2014 alone, we spent almost $14 billion on R&D. Amazing software is being built by entrepreneurs around the world, and we want to ensure those startups have a clear gateway to engage with Samsung in each stage of their lifestyle. The Global Innovation Center can partner with entrepreneurs and startups in a variety of ways. GIC can incubate the new ideas of entrepreneurs through our accelerator programs, invest in early stage companies, establish a partnership or even acquire startups that have market signals and are strategically significant to our businesses. We’re a group comprised of operators and investors who come from startups ourselves, and really understand the needs and challenges.
The Samsung Accelerator was created to support entrepreneurs in developing breakout software products and services that have a deep, lasting impact and address market needs. It’s geared towards seasoned entrepreneurs, providing capital, operational and product support from a management team of experts in business, design, and strategy. We accelerate products by enabling founders to partner with the largest technology platform in the world.
Not every technology-centric startup is a great fit to be venture-backed. What advice can you provide to founding teams on how they can think about their businesses?
The great fallacy of our current market environment is that fundraising is an accomplishment in and of itself. Practically any decent idea with a good team can get at least some money from the myriad of investors wading into the early stage pond. Outside capital though is really just step one on a fast track marked by increasingly elevated expectations and accountability. If you’d rather retain complete control and remain accountable only to yourself, early venture funding isn’t for you. Maybe you’re building a lifestyle business, or can generate enough revenue to reinvest and grow. Your equity is your most valuable asset — don’t give it up easily.
Venture back-able startups are 1) scalable and 2) returnable. Scalable means you can get big, quickly — users, customers, geographies — and you can do so with economies of scale. Returnable means you can provide your investors a return commensurate with the high risk present at the time of investment. Generally speaking, you should feel confident you can build a business that is worth at least 10x what it is at the time you raise — if I write you a check at a $3 million valuation, we should both expect at least a $30 million company.
What’s the best advice you’ve received about being a VC?
Take the meeting — your network is your strongest tool. Also, focus on the key questions that have to be answered to make an investment decision, not all the little ones.
How do you see Venture Capital as an industry changing in the next ten years?
We’ve seen strong inflows to early and growth stage investment over the last few years, due in large part to the search for yield as interest rates have remained so low. We’ll see some of that money reallocated towards traditional asset classes as rates move back up, perhaps even a large outflow if (when!) there’s a significant market correction. I think valuations are peaking, particularly in later stage rounds, such that many financial investors are either stepping to the sidelines or moving earlier where prices are more palatable.
Over the next decade, I’ll be curious to see how many of the new seed stage and micro-VCs fair — if they perform well, I expect more a-few-million-dollar funds will be started by first timers. If not, I expect we’ll see those structures become much less popular. Fund economics are really challenging, especially for small ones. There’s a lot of exuberant optimism in startups right now, I hope the industry is able to maintain that energy over time, through the next economic cycle.
In addition to your role at Samsung’s Global Innovation Center, you’re the founder of Empire Angels, an angel investor network based out of NYC. For individuals who are making a significant amount of money in their current jobs, but have never invested in startups before, what opportunities exist to learn more?
Empire Angels is a group of young professionals eager to invest in, learn from and support early stage technology companies, particularly those founded by our peers. We started out as a handful of friends looking at a few companies and have grown to a large collection of investors from a variety of industries and backgrounds. We’re always happy to share our story with those looking to become angels, just send us a note: info@empireangels.com
