The aim of the Morning Talks series of interviews is to present the impact of Dealflow.eu partnerships on the EU innovation and investment ecosystem.
For this interview, we met with Tom Weller, Head of Innovation at Evenlode Investment Management
“A truly compelling narrative for us is one where there is a whole value chain business model, joining deep pockets to difficult problems that are typically hard to find cash for.”
Could you delve into your journey at Evenlode as Head of Innovation and how your diverse background in scientific research, innovation, and education has shaped your role there?
Our team at Evenlode Investment Management knows a lot about innovation and its role in corporate creativity and long-term growth. I’m a long-term thinker, I went to work on graphene superconductors because I thought it was going to be a carbon century, and superconductors were going to be part of the solution to our energy transition. Two decades later time has proved me at least half right. In the meantime, I transitioned from materials discovery to energy scavenging startups and then physics education. Evenlode was a start-up a little over a decade ago, and over recent years we’ve grown from 11 people to 30 to 40 people. We realised that all that tacit knowledge about innovation needed structure so that we can deploy it in our collective decision making as effectively as we deploy other types of qualitative and quantitative data. I’m accustomed to operating in uncertainty and building new structures, I’m an intrapreneur, so it suits me well to be building new data structures in an existing team. Growing up alongside our innovation analysis were our philanthropic startup investments. Early on we realised that there was a deep parallel between the early stages of individual companies and the creative aspects of larger ones. You see this in the rise of app marketplaces and corporate venture capital. As we developed our practice we built an appropriate governance structure based on our Evenlode Foundation, which mandates both startup investing and giving from a proportion of our profits, I manage the investing with the Evenlode Impact.
Given your role examining innovation across various industries at Evenlode, which sectors or technologies have caught your attention recently, especially regarding long-term value investing in the EU?
We follow relevant academic literature and ideate from our background reading to proactively surface answers to questions of this type. We keep a register of every fragment of discussion on innovation, and we note when the same topic recurs, and in that way surface the answers to this type of question proactively. We also meet fund managers and analysts specifically to ask about the topics that interest them and react to that. My team has recently worked on photonics, quantum communication, direct ocean capture, mRNA, the microbiome, event driven architecture, app marketplaces as corporate venture, and of course, there has been a lot of chatter around AI, but that’s not new, just in the public consciousness now. As I said to Funds Europe in Spring of 2020, AI is about trust in the training partners. New themes I’m looking for in large corporate approaches are niche models overlaying more generalist LLMs, clean models for monetisation, and multi-modal models; all these should come with a trust base in some form.
Drawing from your PhD in condensed matter physics and materials science, are there any parallels or insights from the world of physics that you apply to the world of investment?
I love to think about coherence, which is a concept used in lasers and in superconductors. In lasers the brightness and singular colour comes from amplification that depends on all the atoms releasing their photons with the same timing, their coherence, this I’d equate to everyone propagating the vision and messaging and stimulating each other to do so. In superconductors cooperative interactions between electrons at low temperatures remove resistance, in the simplest model we think about the interactions by considering many pairwise interactions, and the distance over which those pairs form as a coherence length. I’d imagine from that that we can look at.
What are the main challenges you face when looking to invest in EU start-ups or scale-ups?
Covering legals across different countries. Economising travel by effective planning, and avoiding flying – which is hard to do travelling to far-flung areas.
Given that dealflow.eu connects innovators and investors, how do you see projects like these influencing the decision-making processes in investment firms like Evenlode? Can such platforms significantly impact the deal flow and investment landscape?
There are a lot of events out there, so it is important to find those that add value for your particular needs as an investor. I am looking to widen our opportunities across Europe, and understand the EC and EU approach to funding, so this suits me particularly well.
Storytelling often plays a crucial role in investment pitches. From your perspective, what elements make for a compelling narrative, especially for businesses that align with Evenlode’s philosophy?
We are specifically looking for asset light business models with strong cash generation protected by deep economic moats. You need a deep enough moat now to get you to the long term moats your business is capable of. A truly compelling narrative for us is one where there is a whole value chain business model, joining deep pockets to difficult problems that are typically hard to find cash for.
As someone who has worked across academia, government, and startups, what advantages do companies gain when they receive EU funding, specifically regarding solid value creation?
I loved that our EU grant brought stakeholders from across Europe together, adding diversity of thought, resource, and approach. The cross fertilization is healthy, and supports the fundamentals of science and business – finding the right people to do something good for the world. A company gains insight and a broad community with insights across geographies. If we take solid as a relative judgement, then we might imagine the EU funding enabling a company to create value more than if they had not received EU funding.
You have been selected as one of the Expert Reviewers for the Innovation Radar Prize 2023. What strategies or insights do you think are crucial for startups to succeed in pitching their innovations during the in-person event in Lisbon?
Don’t try to do too much. Always deliberately make a connection early in a pitch. Always give the audience a gift, teach them something, and if appropriate give them a call to action. Omit needless words. If you’re using slides can you omit words altogether? They are a visual aid, not reading material. There are always stats that support stories, and so it is important to pin down your key stat – don’t have too many. You want to include enough to get your audience to know if you’re a good fit, and if you are a good fit, to want to speak to you again.
More about Dealflow.eu
Supported by the European Commission, Dealflow.eu discovers and supports the most promising EU-funded innovators and connects them with relevant investors and corporates. The initiative was launched to help groundbreaking innovations secure the funding needed for their future commercialisation by offering them tailored support and matchmaking services.
To learn more about Dealflow.eu, visit https://dealflow.eu/
Disclaimer: Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the Directorate-General for Communications Networks, Content and Technology. Neither the European Union nor the granting authority can be held responsible for them.