Convergent Ventures, based in San Francisco, California, runs a seed-stage fund with a dual focus on life sciences and sustainability, which are of particular interest to NVNG’s investor base.
We had the opportunity to talk recently with Convergent General Partner Julia Davourie for our “5 Questions with…” series.
Q: Tell us a bit about Convergent.
JD: This past May, Convergent Ventures was founded to run Convergent Seed Fund, formerly PVP Seed Fund, a Phoenix Venture Partners fund.
Convergent Seed Fund is a $35 million fund that we raised in 2021 and is focused primarily on two big verticals: human health and life sciences as well as sustainability. We like to say that it’s about both people and planet health.
Many of our portfolio companies are rooted in hardware and fundamental sciences like physics, chemistry and biology. We invest at the convergence of these disciplines and AI/data. We’re a founders-first VC fund. That means we’re not just looking at the technologies, markets and products, we also focus on the founding teams. We work to identify founders who have the ability and potential to grow and scale their companies. And we assess whether we can support them in the right ways (in addition to investing capital).
One of our key approaches to both evaluating and supporting our portfolio companies is to create an ecosystem of corporates who are involved in the supply chains in the sectors in which our startup companies evolve. Historically, when you take Phoenix Venture Partners and Convergent together, we work with around 14 big companies such as 3M, Pfizer, LG, Corning, or Eastman Chemical. The Convergent Seed Fund is partnered with 3 multinational corporation “strategic” LP’s and it really has benefits for all of the parties involved.
The corporates share with us their vision of the future – where they want to invest, where they’re focusing their R&D, and we can make connections with relevant startups from our sourcing and our portfolio. Interestingly, the corporate partners can engage with startups in many more capacities than we can. Yes, they can invest but they can also do joint development projects, take a license, or even act as a supplier or buyer. It brings a lot of value early on to startups.
Q: What makes Convergent Ventures a good fit for NVNG?
JD: The initial point of connection is this idea that we both believe in leveraging the power and connections of our corporate LPs to help build the ecosystem. We also really enjoy working with the NVNG team.
Another way I think we’re a good fit is in the diversification of NVNG’s portfolio. The fact that we focus on companies that are rooted in science, and often, hardware, is unique. Few VCs touch hardware.
Q: What’s your take on the Midwest Ecosystem?
JD: When I look at the joint portfolios of Phoenix Venture Partners and Convergent about 20-30% of the companies we’ve invested in over the past thirteen years are in the Midwest. Specifically at Convergent, we believe that great companies can come from wherever – especially places with strong universities. We’re not just focused on California, for example, we are excited about what’s going on in the Midwest.
In areas that are traditionally underserved by venture capital, there are great opportunities because there can be a little bit less competition to get in – even at the seed stage. Then there are factors such as more efficient cost of capital in places like the Midwest that make for interesting opportunities. For example, companies don’t have to pay California real-estate or salaries. Valuations may be slightly lower and the companies get more runway for a similar investment.
The flip side of this is that, as companies start growing, need more capital and have growing teams, they may sometimes leave the region in search of that capital or talent.
Q: Tell us a bit about how you identify and vet portfolio companies.
JD: We source our companies from as many places as we can: incubators and accelerators, tech transfer offices and national research labs. But, for the most part, the companies we invest in come straight from our networks. It might be previous investees or co-investors and other VC referrals. It’s always nice to invest with other VCs we’ve previously worked with and know are value-add. We value this collaborative approach and work to build strong syndicates.
Q: As you look at Convergent Venture’s portfolio and the work you’ve done there – what are you most proud of/passionate about?
JD: In this role, I get to create lasting relationships with the founding teams. I’m closest to the four or five that I’ve personally led and often have an observer seat on their board of directors. So, I’m definitely very proud of those teams and how hard they work.
For me personally, even though our job is to make a financial return for our investors -and we do take this extremely seriously – I’m most excited about the environmental impact that the sustainability part of our portfolio will have. We have a company that’s revolutionizing energy savings and efficiency by improving steam systems, saving heaps of energy. Another one of our portfolio companies is among the first actually to measure carbon sequestration in the soil for agriculture. There’s so much talk about regenerative agriculture but we won’t really make progress there until we accurately measure soil carbon sequestration at scale. These teams and their impacts are what I get up in the morning for. I love it.