Emily Fontaine engages with VC firms, startups, and portfolio companies every day, she told Business Insider, and she knows what she wants from them.
As IBM’s global head of venture capital, Fontaine leads IBM Ventures, which partners with companies working on everything from quantum computing to artificial intelligence to cybersecurity. She said she wants to connect with 800 startups worldwide this year.
“We’ve got a really good formula for that,” Fontaine said on how she decides whether to invest. “Our mission is super clear: accelerate enterprise innovation with emerging technologies that are delivering real business value.”
Fontaine said she evaluates investments based on “five key pillars.”
Strategic fit
As the head of a corporate ventures arm, Fontaine said it’s important to back startups that align with IBM’s broader goals.
“We want to back companies with a differentiated vision that’s aligned to major trends and IBM’s long-term strategy,” she told Business Insider.
While once known as a hardware giant, IBM has recently started focusing on AI and hybrid cloud. Fontaine oversees the company’s $500 million Enterprise AI fund.
Technology and product
Fontaine’s next evaluative pillar focuses on the product itself: “Are these breakthrough solutions? Are they exceptional quantum quality? Is this technology fantastic?”
Market and competition
Beyond considering the actual technology, Fontaine said she thinks about a startup’s financial viability, like the total addressable market and “strong tailwinds,” or whether industry trends are favorable.
“Is there clear white space for leadership?” she asked, referencing a company’s ability to fill a gap in the market.
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Team
Fontaine described herself as a collaborative leader. She said she goes to the office as much as possible and encourages her team members to do the same. Twice a week, she blocks out her whole team’s calendar for dedicated collaborative time.
The same focus on teamwork applies to the startups she backs, which, for one, need “high-quality founders with deep domain expertise.”
“But even more so — as we do not lead deals, we co-invest alongside top-tier VCs — you have to think about who’s on the cap table?” Fontaine said. “Is that a cap table you believe in?”
A cap table — or capitalization table — is a document that outlines investors’ equity stakes in a startup.
Financial discipline
Ambition is great, but Fontaine said she’s also focused on making sure a startup has reasonable financial goals.
“Do they have realistic milestones? Do they have scalable models?” she said.