Investor Profile: Matteo Leonardi of Grey Silo Ventures

Matteo Leonardi is Investment Manager at Grey Silo Ventures.

FUNDRAISING DYNAMICS

What’s the best way for founders to get on your radar?
All channels are good channels. Of course having a good reference from a trusted party helps a lot, but we try to scrap every source of DF: co-investor referral, accelerators / incubators / uni spinoffs /studios, but also events, LinkedIn and website inbound.

What’s the most common mistake founders make when pitching to you? 
A founder needs to convey the right message about why what they are building is solving a real problem and why they are the right team equipped to do so. Often times this gets overlooked and we see founders spending a lot of times trying to tell us what's broken in the food system. Another typical mistake is not arriving prepared on your TAM to SOM calculations. A great founder will have matching bottom-up and top-down, data driven calculations on how big their obtainable market is.

What advice would you give to (FoodTech/AgTech) founders before their first meeting with a VC? 
Do a little bit of reverse DD. Get to know not just the fund focus and portfolio but also the person you'll be talking to (often times funds will have a person covering sub verticals) and you'll already have a credibility badge on how you work. Also, make sure your story is straight and concise, first meetings are all about installing conviction in the mind of the listener.

Do you have any key metrics (e.g. revenue numbers) you expect startups to hit at the stage you invest? 
No, especially because we invest (also) very early. Signs you are able to gain traction (whatever that may be at the earliest of your entreprenurial journey) are surely a big plus.

What are some red flags that prevent you from investing? 
Surface level: 1) broken cap tables, 2) no clear USP, 3) part-time founders.

DD level: 1) signs of co-founder misalignment, 2) lack of a specific skillset among the founding team (e.g commercial officer, scientific / technical co-founder).

PORTFOLIO COMPANY DYNAMICS

What’s your philosophy around being hands-on or hands-off with your portfolio companies?
In a rally metaphor: we like to think that founders are the drivers at the steering wheel and we are the co-pilot giving race info. Of course that changes if there is a specific need from the team and/or something we clearly can help with. In that case we try to be hands-on, but never in a pushy way.

How do you like founders to handle things when everything is going wrong? 
First of all to communicate everything that's going on and don't be afraid of calling for help. It may very well be that we've seen something similar to what you're going through in another company, so we can assist and support you in taking an unbiased decision.

What’s the strangest situation you’ve advised on, in relation to a founder?
I prefer not to dwell too much on this, but team dynamics are always the hardest to settle.

CURRENT INTEREST

Are there any startups you’re looking for right now? Ones that are working on a solution to a specific problem?
Of course. We have invested in 10 companies, and are in talks to invest in 2 more soon. We plan to reach 15-18 companies before drawing a line and evaluate our first years. In food: we are still on the look-out for a fat alternative company, and enabling technologies that help current products become cheaper, tastier and more sustainable still pick our interest. In agri: we'd love to make a bet in robotics, and are always eager to listen to founders with deep connection to farmers (those who know how intrinsically complex agriculture is).

What’s a topic (investment-related or not) that once brought up gets you super excited? 
Food cultures and their history. Ingredients, recipes, culinary traditions are what got me to study food science in the first place.

FINAL QUESTIONS

What’s the biggest misunderstanding founders have about you or your role as an investor?
Being a CVC, that we are investing in companies expecting to engage in collaborations or JDA straight away. Grey Silo Ventures was born with both a strategic and financial end goal in mind, but we know that startup-corporate engagements take place at Series B (if not beyond), especially when production related. As we invest way before that, we do not expect to see any obligation to work with us this early. However, we strongly appreciate keeping a close interaction from the beginning as we support our portfolio companies with the knowledge and network that our parent company built in over 40 years of being in the agri-food market and that can facilitate GTM, scale-up and procurement.

What’s the most fun part of your job that founders might not realize? 
Our job requires jumping from case to case quickly and adaptively, as we may spend hours trying to get up to speed on a sub vertical in syn-bio one day and wake up to read scientific publications on plant breeding the next. Most think that this is the most thrilling side of VC, but the best part for me is the human-human interactions that go beyond learning a new concept or understanding a new technology.

What’s one company (in any industry) you never had a chance to invest in, but wish you had?
Lovable.