We recently sat down with Ari Rubin, Partner at Celesta. He talks about the most important factor in evaluating a company, and how the firm helps our companies scale.
What led you to venture capital?
My 20 year-career has given me different perspectives I draw upon in investing. After graduating from U.C. Berkeley, I became an engineer at Raytheon, Space and Airborne Systems. Raytheon was a great place to develop as an engineer because of its strength as a systems company.
After business school I worked at UBS and J.P. Morgan’s technology group where I advised clients on transactions including M&A and financing.
Subsequently at Qualcomm, I got to see how the deal sausage truly gets made at a company that operates in an extremely strategic way. I enjoyed facilitating transactions that created an infusion of technology, teams, and businesses that represent some of the major drivers of growth today.
I joined Celesta with the 4th fund. It's been a blast collaborating with great CEOs and teams to build their companies around novel technologies.
What markets are you interested in?
Promising applications often lack the infrastructure to meet their potential, whether it’s computing infrastructure, sensors, sustainable chemical processes or instrumentation. We consider a broad range of markets, such as semiconductors, software, intelligent systems, bioconvergence (where deep tech intersects with medicine and healthcare) and energy efficiency. Our approach to investing is proactive in that we fixate on certain trends, survey the landscape, and invest in companies we believe will be best positioned to transform their industry.
What do you look for in companies?
The quality of the technology is of utmost importance. We look for technological innovation that can add real value to society and can become the basis for a sustainable advantage. Other criteria follow, such as whether the market is attractive and whether customers are engaged.
The quality of the CEO is extremely important and probably the most imperative factor. Hearing a list of accomplishments doesn’t resolve whether he or she will be successful. Personality and talent shine through as we get to know each other over time, and I enjoy forming long-term business relationships and friendships.
How are you helping companies scale or navigate during this volatile environment?
We are emerging from a period where capital was often seen by companies as being very cheap. The industry saw a lot financial engineering like SPACs that helped companies get even more money in, and companies could go a long time before having to show profitability.
We have always advised our portfolio companies to be thoughtful, because deep tech requires incubation. They know they need to have ample cash so they can be focused on hitting their key milestones before their next financing.
Beyond that, companies are facing different types of challenges. There are those who are performing at or above plan, and their business model is resonating with customers. In a recent example, we helped a CEO refine their management presentation so the company can attract later stage investors. We then facilitated introductions to suitable investors who ended up participating in the round.
There are companies within our portfolio that are a little behind their plan. In such cases, we might focus on trying to identify the root cause, bringing in experts to help resolve a technology hurdle or make warm connections to potential strategic partners or key hires.
Where do you find inspiration?
I’m inspired by people who are great at what they do, whatever it is. I am in awe each time an athlete demonstrates mastery of their sport. I am inspired by scientists and researchers who are driven in pursuit of knowledge.
In evaluating new investments, we are looking for CEOs who inspire, lead by example, exhibit integrity and possess deep knowledge. The ability to articulate a compelling narrative is extremely important. I am also looking for innovation or big ideas that will forever change the world. Qualcomm pioneered CDMA for wireless communications and remains at the forefront in connectivity. That’s the type of innovation I am driven to find.
What has surprised you the most as it relates to venture capital?
I’ve been surprised by the way that funding networks line up capital for the most promising ventures. It often results in Celesta co-investing alongside other venture funds, institutions, strategics, or high net worth individuals. It often comes down to relationships folks across the firm have with other investors. Ultimately, that guiding influence enables Celesta to assemble an entire syndicate, whether it’s as part of an initial round or a follow-on investment.
What do you like to do for fun?
I live in the East Bay with my wife and two little girls and spend most weekends playing with them at the park or the pool. I also enjoy playing tennis and am on a few USTA teams.