Formation Venture Engineering Does Well By Doing Good

Formation Venture Engineering, is a new venture capital fund focused on building companies that have both financial gain and a positive impact on the world.

“Everything that we do has to have both a massive technical and financial gain opportunity and a massive reduction of human suffering opportunity, otherwise we won’t do it,” said Rahul Bhansali, a co-founder of Formation Venture Engineering. “I want to do something different. I want to surround myself with people that are making the world a better place.”

This approach, which Bhansali calls “venture engineering,” includes a comprehensive plan for making sure the companies that receive the investments are groomed for success. The plans for these companies include pre-planning exits and building strong management teams to help bring game-changing technologies to the world.

Prior to starting the fund, Bhansali said that he had a background in risk analysis and commodities, but realized that he wanted to do something more meaningful with his career. He co-founded Strong Arm Technologies, a company that uses sensor technology to predict injuries in the workplace and is considered a major safety innovation.

To ensure that their portfolio companies stay on track, the fund leads all their rounds and heavily screens potential investments up front. They also make sure to work with venture capitalists who are on board with their approach.

In addition, they engage in a process of asking key questions to industry experts and gathering as much knowledge as possible about a potential investment to inform their building process. This has led to successful investments, such as LeviSense Medical, a company that produces medical mattresses with advanced technology to prevent bed sores.

Winning Big

“We’re trying to build in such a way that they win big,” said Bhansali.

One example of this approach is their incubator, FVE Foundry, which leverages successful technologies and creates new companies.

“This is the prototype of how we run our incubator, where we’ll have a company that’s successful, we can leverage their technologies, new applications, and create new companies,” said Ajay Verma, CEO of FVE Foundry. “And this is the first example that has come out of that.” They recently sold a company that is expected to have a significant impact on reducing the misdiagnosis of cancers and other diseases.

“The first company that we sold is going to have a serious impact on the reduction of the misdiagnosis of cancers and a good number of other diseases,” said Bhansali. “What these guys developed is a way to do that very quickly and very, very accurately. It’s called multiplexing, and what it allows them to do is to take one sample and run over 20 different tests on it at the same time.”

According to Bhansali, the key to successful company building, is maintaining a strong foundation of trust within the management team. However he said that this can often be difficult due to the natural tendency for fear to arise within teams, which can lead to conflict and ultimately the destruction of trust. To combat this, Bhansali said his fund focuses on open communication and transparency, as well as providing support and resources to help management teams navigate challenges and build trust.

Overall, Bhansali said his approach to venture capital is based on a lack of ego and a willingness to learn, which has proven to be a successful strategy for building successful companies that have a positive impact on the world.