Pariter Partners founders Matteo Elli and Jari Ognibeni, Image Credit: Pariter Partners
The Org interviewed Pariter Partners, an Italian investment company with a primary focus on entrepreneurial scientists and deep tech companies in pre-seed and seed stages. Pariter is covering an untapped investment opportunity that sees Italy as the most prolific country in IP production, but less efficient in building tech unicorns.
The Pariter team is founded by:
Matteo Elli: An angel investor and institutional investor with over 10 years of experience in the financial market. As one of the first members of Fondo Italiano di Investimento team, he was a member of investment found committees and an advisor. He has invested directly and through third parties funds about €1 bln in private equity, venture capital funds, and innovative companies.
Jari Ognibeni: An investor in technological and product startups in Italy and the USA. He is the founder of the first hardware accelerator in Italy and of the most active Italian seed investors.
They both answered our following questions:
What do you think are critical elements that limit traditional funding models for the success of the startups?
Very often during funding phases, startup teams look just to maximize the amount of money they can raise. What they discover later is that paying back investors with part of their equity implies that who is investing money is also influencing decisions, as a part-owner of company capital. On the other side, most investors look for startups that can repay their capital with high returns, given the market as they know it, which can change very quickly. The result is that startups most of the time onboard investors who are focused just on capital return but are not capable or interested in supporting the business development. This means technical ventures with very high potential but with a potential long investment duration are not deeply understood by many Italian investors.
To overcome this inefficiency, we are focusing on evaluating know-how, technology, industry, market experience, and networking both from investors and startup sides. We want to evaluate capital and skills equally to become partners in co-creating the first part of the entrepreneurial journey of every team we select. Most of the time we are the first capital in the company and bring not just money but the business support of our network of partners and investors.
Pariter Partners is a syndicate network made by more than 200 investors, coming from large corporations to business angels, that proactively support the venture and its challenges at 360° by creating hands-on, mentoring, and coaching moments so that investors can transform their capital and experience in a concrete acceleration for the portfolio startups. Most of the time we just address questions or create a connection that allows the entrepreneur to zoom out and embrace a powerful new point of view.
We do not provide just capital to our portfolio companies but operative support in product development, market analysis, and sales activity. Syndicate investors are not passive investors but are involved in the active support of portfolio companies. Pariter means equally together.
Why did you decide to found Pariter Partners?
We decided to found Pariter to create a different way to invest within the Italian ecosystem, based on the goal of turning entrepreneurial scientists and deep tech companies into successful ventures.
Leveraging our international experience and approach in the Italian VC market and know-how on prototype hardware, we detected deep tech as a huge market opportunity in terms of the availability of talented teams and the potential market for real applications that can disrupt every industry from healthcare to automotive.
Our approach is unique in Italy, as Italian investors are traditionally risk-averse regarding this kind of investment, even though it’s common in markets like the U.S.
Finally, in Italy, we can count a relevant number of highly qualified people, great research centers, amazing technologies, and a creative culture. We strongly believe in the Italian ecosystems and for these reasons, we created a new and fresh firm like Pariter.
What do you think is your competitive advantage compared to other funding solutions?
To turn our aim into reality, we have focused on developing a concrete way to strengthen strategic technologies in our country. We built a unique ecosystem and a specific proprietary acceleration and investment program that supports research teams bringing their technology from the lab to the market. We call it ScienceLab.
Furthermore, in 2020 we created Pariter Equity (pariterequity.com), the first and unique syndicate investment platform in Italy.
With Pariter Equity, we manage our investors’ network and the platform allows other investors to create and share syndicate deals. We provide them with the investment structure and technology layer to collect commitments and deploy capital.
The innovative component lays in the possibility to invest in alternative investments as deep tech companies in a smart way for every investor: we provide full support and methodologies to create effortless syndicate vehicles.
Practically, we give access to alternative asset investments by sharing great deals and opportunities to other lead investors to create their own syndicate deal.
This is why we are recording amazing interest from corporations, private investors, and even wealth managers.
Obviously the syndicate deals of Pariter Partners are shared on the platform with the same approach.
How do you select the right team/prototype?
We believe people are key, so we spend a lot of time with teams before going through with an investment decision. Investing in pre-seed/seed stages requires great attention to the technology and market evaluation, since there is a high probability of having developed the right technology without a potential market and vice versa. Thus we invest a lot of time analyzing the team experience, the technology, and the market potential, which is not always easy to predict and is still a crucial variable to manage.
For every potential investment, we organize a dozen meetings with corporations active in the market with the aim to get from them their point of view on the technology and the market potential. From the other side even for corporations this opportunity is pretty important for tech scouting and most of the time they end to invest in the syndicate dedicated to such a startup. This approach is crucial to bring value to the companies and to our investment evaluation process.
How do you support tech teams in their go-to-the-market strategy?
Supporting tech teams while they approach a go-to-market strategy is a determinant touchpoint and we know this is where we can make the difference while providing network occasions and references.
We push every team to meet individuals and companies who can represent potential partners, suppliers, or clients and to receive insight on the market. Our mantra is, let the market say what the market needs." Forget everything you believe about the market and listen to the market. Full stop.
Investing in pre-seed and seed stages requires deep experience in technology analysis and even more so in the market dynamics, which we both learned during previous successful and non-performing experiences.
This is why we normally tend to organize several meetings with managers of corporates that are part of our network and push tech teams to activate syndicate investors even before the investment decisions have been taken.
How do you onboard investors and partners?
By creating a positive ecosystem and a consistent reputation, we can attract investors who are first interested in becoming partners of Pariter and second, of our portfolio companies. We invest time and energy in involving all investors in the activity of all the tech teams, and we engage them in several activities that go from analyzing together strategies and metrics to experiencing the product. We create the condition for our syndicate investors to deploy capital in unique investment opportunities and be supportive and active on their investments.
Furthermore, we share deal opportunities and allow our investors to monitor their portfolio through Pariter Equity platform.
Investing in deep tech companies is not easy given the complexity of the technical innovation and the academic approach that teams usually apply. The impact that engineering innovation can have is huge: from healthcare to hardware production, robotic automation as well as artificial intelligence are the basis of our future.
We make it feasible and more transparent for corporate and angel investors to understand the value of these teams and their innovative solutions.
Are you structuring a program/methodology to lead startup teams to success?
Yes! That's the Pariter secret sauce. We developed a proprietary framework to lead pre-seed investment and research teams to success, the ScienceLab framework.
As anticipated before, ScienceLab can be considered our core competitive advantage, as it allows us to connect the dots, find answers, and provide resources to our ventures' most relevant issues.
More specifically, ScienceLab supports research centers and entrepreneurial scientists in increasing the conversion of science and technologies in real market applications.
We supported and invested in teams thanks to our activity with research teams active in some of the most important Italian research centers such as Istituto Italiano di tecnologia (IIT - the most important Italian research center), Università di Trento, and Politecnico di Milano (two of the most important Universities for science and engineering in Italy).
We designed the ScienceLab framework as a fundamental tool to turn technical research into entrepreneurship. Our proprietary framework pays great attention to the go-to-market analysis and strategy and we spend a lot of time on that with our team the results are amazing. Seeing a tech team made of researchers evolve from the first meeting with us to negotiating with a multinational company is a great satisfaction.
Our framework combines activities both on the business development side and the product/technology development side. We take into account more than 50 KPIs both on the business and product sides monitoring the evolution and improvement on such topics, from the design of one sales slide to the BOM or the assembly process of the product.
Seeing ScienceLab working is electrifying, as it concretely leads our teams to learn very quickly how to approach market, customers, and partners, accelerating their growth and raising capital from other investors.
What do you see in your future?
Our aim is to increase our network by focusing on the number of research centers and new investors (we would like to see more and more companies invest in deep tech opportunities). We want to reinforce interaction between scientists and corporations using ScienceLab like an enzyme to increase the speed of tech transfer. We would like to support more teams, collaborate with more universities and labs, and let more companies get in touch with such technologies and investment opportunities.
Our final goal is to create a seamless flow between ScienceLab and Pariter Equity by developing vertical investment vehicles on specific topics, such as robotics. We want to create a unique ecosystem dedicated to specific areas bringing the experience of corporates and investors to several scientists, generating know-how and positive loops.
Furthermore, we are internationalizing our investors’ network, giving the opportunity to foreign investors to invest in high-quality deals in Italy, and on the other side, we are sharing investment opportunities abroad with Italian investors.
By doing this, Pariter Equity will become the one-stop-shop for alternative asset investments.
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