Partner - 4Di Capital, Board Member and Chairman, HealthQ Technologies
Laurie Olivier, a South Africa and Global venture capitalist and entrepreneur with a shopping list of deals, titles and accreditations to his name, is high in energy about his latest venture with HealthQ Technologies, a Health and Wellness start-up out of Stellenbosch, South Africa. Laurie says, as quoted from his interview with Martin Carstens from Ventureburn, that the partnership shows "the signs of a winning entrepreneurial team," and that has "…the combination of capable, youthful energy with experienced investors, in conjunction with the explosive growth at the cross-section of the global digital health and wellness sectors, comprises the right ingredients for great success."
Read on to find out more about Laurie's view of HealthQ, the responsibilities of a VC to drive entrepreneurs, non-negotiable's in these relationships, and key characteristics of entrepreneurial activity in South Africa. If you have any questions on entering the American market, please reach out to the SABLE network via its website. We encourage you to join the platform to make the most of the network of experts.
SABLE (S): When was HealthQ conceived and at what stage did you feel like you had come across a commercially viable idea?
Laurie (L): The HealthQ founders were introduced to each other in September of 2009 at the Bio-2-Biz business plan competition in South Africa. I attended the annual business plan competition on the invitation of Emory University and the South African Government as part of a five person international judging panel that were tasked to find the most attractive bio related startup opportunity in South Africa – the winning prize being an investment by the then South African government sponsored Innovation Fund. The competition is aimed to promote entrepreneurship in the South African biomedical space, and Riaan Conradie and Franco du Preez, who had just completed their PhD studies at that time, presented a business plan for establishing a chemical based consumer calorimeter company. The judges did not rate their innovation to be feasible for commercialization, but I was impressed with the two young highly qualified entrepreneurs and their specialized knowledge in a field that I thought was set for significant growth, namely wellness. On an international basis I then had already noticed the first early signs of this field opening up, and now three years later this is rated by investors as one of the hottest technology market segments. Judged by the recent Consumer Electronics Show in the US, the health and wellness consumer device market are gaining tremendous momentum and many startup companies are trying to capture part of this growth. At the time of the Bio-2-Biz competition I thought that Riaan and Franco's expertise would become a much needed resource going forward, and suggested that we jointly investigate the establishment of a facility that could add value and benefit from what might become a major future technology area. HealthQ was hence established as a facility to test and industrialize new innovations in the wellness space, especially those innovations that occurs at the vortex of wellness market and various technology disruptions, including mobile, social media, and big data.
S: HealthQ is at the forefront of health and wellness research, locally and globally, but how does this translate into impact for the every day consumer?
L: HealthQ was subsequently tasked to assist with the testing and industrialization of a technology called LifeQ. The LifeQ product, worn by the user, will be able to determine the amount of calories and type of food that is being metabolized in real-time. Through constant electronic monitoring, both the energy uptake from food consumption and the energy expenditure of the user from vital functions and exercise will be accurately tracked, without the need for manual data logging and intervention, or the use of inaccurate proxies such as accelerometers or GPS. Being essentially a dashboard with the ability to track processes inside the human tissue, the product will have a wide variety of other applications including the effective determination and management of nutritional intake and exercise towards better sleep, and of advance performance factors like EPOC (after burn) by extreme athletes.
S: For both HealthQ and 4Di Capital, what did each party identify in the other that would be the value add to a successful relationship and investment in one another?
L: All the HealthQ founders are rightly concerned about the plusses and minuses of bringing VC investors on board. On the positive side VC's have a lot of experience with startups and could represent great soundboards for management throughout the evolution of the startup. Their networks are typically vast, and the hand that they can provide to a new technology company during the seed phase could be very helpful. On the other hand, they often have their own priorities at mind when serving on the boards of companies, and can be limiting on board level if they do not role up the sleeves to get to know the business intimately in order to best add real value on the strategic decision making level. Against this background the HealthQ founders preferred to have as its investors rather a consortium of large influential global families, that boast the same or even better networks than most VC's and that tend to have a more operational interest in their investments than the average VC. With 4Di having relationships with two prominent successful families in the global playing field, the HealthQ founders thought that an investment by 4Di would offer the best of both investor classes. 4Di is rapidly building a reputation to be one of the most capable seed stage VC's in South Africa, and the HealthQ team feel very comfortable that the 4Di team will be team players that can add a lot of value to the company, and they understand the need for rapid strategy and plan adjustments during the early discovery intensive days.
S: For each, what were the non-negotiables?
L: For HealthQ, most important was the need for flexibility to evolve a strategy during the seed phase without having to limit its efficiency and frugality by trying to prove an initial plan that was based on sketchy information at the time of conceiving the idea. Thus the HealthQ inventors wanted investors that would have trust in the management team and its judgment, yet knowing that they have a relationship with the team that would make them real decision-making partners regardless.
For 4Di, HealthQ represented an unusual global investment opportunity, with a combination of seasoned entrepreneurship, and young dynamic thinking that, if smartly superimposed, could lead to a great outcome. Also, the investment partnership entered into with the rest of the HealthQ investor base of influential global investors, provides a great extension and complement of 4Di's value adding network that could have great spin-off benefits to the rest of its portfolio.
S: Particularly 4Di, what roles will you play in ensuring HealthQ's success?
L: 4Di works in close partnership with the HealthQ team, on all aspects of the business. Its value add ranges from helping to structure the initial investment agreements and assisting with the evaluations of the product under evaluation and industrialization, through to assistance in finding global commercialization partners for HealthQ and its customers.
S: What are your short-, medium- and long-term goals?
L: HealthQ is a longer-range investment opportunity with a strong global reach that would balance 4Di's otherwise portfolio of investments that boast shorter-term exit opportunities and where often 4Di is the only or one of only a few local investors. Another long-term goal associated with HealthQ is of course to identify global investment opportunities in the wellness space through the networks and reach of HealthQ.
S: How do you see a deal like this benefitting South African startups, entrepreneurs, etc.?
L: HealthQ is a great example for and encouragement to other South African startups and entrepreneurs on how to position its capabilities to team up with leading global partners in targeting high growth technology opportunities. With the proliferation of information through the Internet and of all the technologies that streamline communication and international investment, South African entrepreneurs have a great opportunity to step up its participation in the global technology startup world, and in particular to take a front seat role in areas where South Africa has a global competitive advantage such as mobile communications and businesses where the internet and social media could play a material role towards a successful outcome. In the case of HealthQ, South Africa's sport and outdoors orientations are also of great value.
S: What lessons could they learn from your success to date?
L: The importance of a strong supportive investor base is fundamental for building a great company with global reach and intentions. Also that frugality during the early formative years is essential, so to keep independence in making the best decisions for the company, without having to yield to funding pressures that often skews the decision-making and strategy of startups. A smart entrepreneur should be prepared to spend at least one third if not more of its time at the outset of the venture towards getting the right partners on board and validating the startup technology, market and business model.
S: Following your experience, where do you see South African entrepreneurs being most challenged in how they scale and go to market?
L: Access to global finance and commercial partners is generally a key issue. Naturally all the restrictive laws around intellectual property and foreign exchange, that render the need for expensive advice during early founding days when funds are scarce, are not helpful either. There is also comparatively much more red tape involved in establishing a new entity in South Africa than for instance what would apply in the USA. Finally, in comparison to the evolving segment of the global startup community, South African startup founders with global commercial experience are still a scarce resource, and this generally represents a major concern to South African early stage investors.
S: You have described a lot of characteristic about what is great about the relationship between 4Di and HealthQ, but can you summarize the key characteristics that make a successful entrepreneur and entrepreneurial team?
L: Prior startup and deep domain experience, combined with visionary but effectual thinking, and a touch of naivety and stubbornness are a powerful set of ingredients towards success. And then I feel strongly that a combination of older and experienced team members with younger aggressive innovators represent the ideal mixture of an effective entrepreneurial team. It should be avoided to seek all these talents in one person, as this might bring out a much less effective compromise. Frugality while the technology concept is still in the proving stage is essential, plus a willingness to sacrifice and to prioritize results and company success ahead of personal fame and comfort.
About Laurie Olivier
Laurence (Laurie) Olivier is the Atlanta based partner of Veritas Venture Partners, a pioneering seed stage venture capital (VC) firm that invests in Israel and the USA. He is also a partner of 4Di Capital, a South African (SA) based VC firm, which has Luxembourg listed Reinet Investments as its anchor investor.
Laurie's involvement in VC commenced in 1989, through representing the interests of a major global resources company, Anglo American, on an Israeli focused VC fund, Anglo American Ventures and several of its portfolio companies. Laurie has served on the boards of more than 20 publicly traded and privately held businesses, including the then largest industrial holding company in SA, Anglo American Industrial Corporation Ltd. Laurie was also an advisor to Columbus VC, the globally focused venture investment arm of Reinet, and currently serves on the boards of a variety of technology companies in SA and the USA.
Laurie holds a B.Engineering (Electronics) from the University of Pretoria, and a B.Com (Hons) and diploma in Datametrics from the University of South Africa. He has served from 2007 to 2009 as Chairman of the American Israel Chamber of Commerce (AICCSE), is a board member of the Southern Capital Forum, served as a commercialization advisor of the Industrial Science and Research Council of South Africa, is an advisor to the University of Pretoria, and has also served as an advisor to the VentureLab of the Georgia Tech. In 2004 Laurie was recognized as VC of the Week by the Dow Jones Venture Reporter and in 2007 was featured by the Atlanta Journal Constitution in its series "Movers and Shakers of the Atlanta Metro". In 2010 he received the Founders Award from the AICCSE.
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