The 6 Traits Startups Need, According to GM’s VC Arm

On Oct 23, 2021

GM Ventures managing director Wade Sheffer looks for key traits in startups and founders.
They help him separate “great companies” from ones that will “disrupt the marketplace.”
Here are the six traits founders and startups need in order to impress GM Ventures.

Each year, between 300 and 400 startups approach GM Ventures, the corporate venture capital arm of the Detroit automaker. These companies are all competing to attract GM’s attention with new business opportunities or solutions to the tricky problems facing the auto industry today.

Just being great isn’t good enough. GM’s venture arm wants to see a few particular characteristics from those outfits and their leaders before sealing a deal.

“There might be some great companies, but then there’s some amazing, outstanding companies that are going to simply disrupt the marketplace,” Wade Sheffer, GM Ventures managing director, told Insider.

“We do focus on identifying and looking for novel technologies that’s going to bring significant value to the company either through an enterprise solution or hard tech,” he said, “meaning that it simply doesn’t exist today.”

Founded in 2010 with an initial investment of $100 million, GM Ventures currently has 24 active companies in its portfolio, including lithium metal battery technology startup SolidEnergy, solid state lidar company AEye, and low-power wireless charging provider Powermat. It has exited companies including electric bus manufacturer Proterra and fleet management platform Telogis.

In line with GM’s chief priorities, the venture arm is focused on businesses innovating within electrification, connectivity, automation, and smart factories. GM seeks out smart startups that it can form a commercial relationship with, and ultimately deploy their tech in volume. The startups bring the agility, GM supplies the massive back office.

It’s also how the automaker works to serve up the latest and greatest technologies on the market.

“Certainly there’s all kinds of pain points that we’re trying to solve, and what we try to do is get ahead of those pain points in a proactive way,” said Sheffer, who has held a variety of other leadership positions within the company, including in global purchasing and supply chain.

“The reality for us is identifying those companies that first, can bring something of value to General Motors, are very disruptive, and be able to potentially solve one of those critical pain points.”

In rooting those out, Sheffer specifically looks for startups that disrupt the industry with a brand-new technology, bring value to GM, and solve critical industrywide problems. And he wants founders who listen, are trusting, and aren’t afraid to partner up.

The startups not only have to impress the 10-person venture team, but their ideas are often then vetted by internal GM experts to gauge their viability and need.

At the helm of these companies should be entrepreneurs that can carry their technology forward, have an ability to connect with people, and especially “those that are open and willing to listen, engage, and be a meaningful partner,” Sheffer said.

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