How does a venture firm approach investments in deep technology?

Seth Winterroth is Partner at Eclipse Ventures, a VC firm that partners with exceptional entrepreneurs to build companies that redefine physical industries.

Seth has nine years of experience in venture capital, serving as Associate at GE Ventures before he joined the team at Eclipse. 

On this episode of Boost VC, Seth joins us to explore how Eclipse thinks about investing in emerging technologies, explaining how the team engages with customers and leverages internal expertise to identify high-magnitude market opportunities. 

Seth shares his interest in robotics, discussing why the acquisition of Kiva Systems sparked his interest in this particular deep tech field and how he identified the opportunity to invest in 6 River Systems—the first deal he led at Eclipse. 

Listen in for Seth’s advice to young VCs on cultivating patience and responding to chaos with calm, engaging with founders in a way that’s rational and devoid of fear.

Topics Covered

The thesis at Eclipse Ventures

• Small teams of engineers solving hard development problems
• Industries that operate in physical world (80% of global GDP)

How Seth thinks about investing in emerging technology

• Start with markets, customer pain points
• Find specialist to develop n-of-1 solution
• Add traditional engineers with experience scaling technology

What gets Seth excited about robotics

• Kiva Systems acquisition by Amazon sparked interest
• Saw market trends driving adoption of autonomous systems

The success of Seth’s first investment at Eclipse, 6 River Systems

• Robotics company in supply chain logistics
• Acquired for $500M by Shopify in 2019

How Seth identified the opportunity to invest in 6 River Systems

• Ideal team profile and product differentiation
• Gap in market to replace Kiva Systems

Eclipse’s institutional process of thesis development

• Engage with customers, purchasing decision-makers
• Internal engineering expertise to identify gaps

Eclipse’s internal venture equity program

• Cases where did research but didn’t find right opportunity 
• Engineer storm vs. wait for lightning to strike

What Eclipse does to win deals

• Build relationships with founders
• Provide evidence of value-added capital

The part of a deal Seth is most excited about

• Find high-magnitude market opportunity to match worldview
• Go to partners with conviction and say THIS ONE

What Seth would tell his 25-year-old self

• Be patient, don’t rush to have track record in venture
• Respond to chaos with calm, be rational and devoid of fear

What differentiates Eclipse from other venture firms

• Tackle category of economy traditional VCs shy away from
• Deep involvement with companies to improve odds

Seth’s biggest accomplishments before age 20

• Live on own and travel world
• Spend meaningful time with and learn from grandfather

Connect with Seth Winterroth

Eclipse Ventures https://eclipse.vc/

Eclipse on LinkedIn https://www.linkedin.com/company/eclipse-vc/

Eclipse on Twitter https://twitter.com/eclipseventures 

Seth on Twitter https://twitter.com/Sethwinterroth

Seth on LinkedIn https://www.linkedin.com/in/sethwinterroth/

Resources

Kiva Systems Acquisition https://techcrunch.com/2012/03/19/amazon-acquires-online-fulfillment-company-kiva-systems-for-775-million-in-cash/

Willow Garage https://www.businessinsider.com/a-look-back-at-willow-garage-2016-2

DARPA Grand Challenge https://www.darpa.mil/about-us/timeline/-grand-challenge-for-autonomous-vehicles

6 River Systems https://6river.com/

Bright Machines https://www.brightmachines.com/

BrightInsight https://brightinsight.com/

Foxglove Studio https://foxglove.dev/

Kevin Kelly’s Blog ‘You Are Not Late’ https://medium.com/message/you-are-not-late-b3d76f963142

Richard Hamming’s Talk ‘You and Your Research’ https://www.youtube.com/watch?v=a1zDuOPkMSw

Team of Rivals: The Political Genius of Abraham Lincoln by Doris Kearns Goodwin https://www.amazon.com/Team-Rivals-Political-Abraham-Lincoln/dp/0743270754

Lincoln https://www.imdb.com/title/tt0443272/

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