- Former Tesla production VP Greg Reichow is a partner at early-stage VC firm Eclipse Ventures.
- Of the 3,000 startups that approach Eclipse annually, the firm invests in about 10.
- Reichow revealed what he looks for when deciding to bet on a company and its founders.
Former Tesla vice president turned venture capitalist Greg Reichow says he looks for a few characteristics in a startup’s CEO that impress him enough to cut a check.
“I would capture it as, that they were humble and that they listened,” said Reichow, who spent six years at Tesla, including a stint running manufacturing operations, supply chain, and automation engineering as vice president of production.
Each week, as many as 50 companies approach Eclipse Ventures, the early-stage VC firm at which Reichow is a partner. They run the gamut of industries, from social media to fintech to software-as-a-service.
But Reichow and his partners are selective about which they choose to invest in. The Palo Alto-based firm has backed just about 70 companies since its inception in 2015, and now has about $2.5 billion in assets under management. It often provides an initial investment of $2 to $4 million for early stage startups and up to $20 million for later stage ones.
Reichow most often signs off on startups tackling autonomous driving, logistics and fulfillment, next-generation computing, and automation technologies. His investments include automated aircraft startup Reliable Robotics, manufacturing software company Symbio Robotics, and warehouse automation company 6 River Systems, among others.
Reichow cares less about the company’s industry than he does its leadership. Eclipse is attracted to CEOs who exhibit similar characteristics in the early stages, said Reichow, a partner for the past five years.
“In this business, a lot of times the CEOs that are big, brash, large egos tend to get a lot of the news coverage,” the former Tesla exec told Insider. “One of the key things that we look for when we’re meeting with a founding team is, obviously, how well do they understand the thing they want to go build, but two, are they open to new ideas? Do they listen to the people that are around them?”
Working with CEOs that have an ego is a turnoff, Reichow said. He prefers leaders who listen to their customers and employees.
“That gives those CEOs an ability to learn at an outpaced rate, which I think helps their organization overcome a lot of the barriers that you have with building a new startup against incumbents, and ultimately leads to a lot more success.”
To Reichow, the founders who listen are also the ones who can effectively sell the public on a new product.
“The CEO has to be able to sell the idea,” he said. “If they don’t have that gene that says I really desire to understand what’s happening around me, oftentimes what they’re selling is maybe not what you really need or is not actually real. Ultimately, you just can’t build a business on that.”