Jan 13, 2016 · 29m · 20vc
20 VC: Investing in Hardware and The Future of IOT with Kate Shillo, Director @ Galvanize Ventures
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Kate Shillo, Director at Galvanize Ventures, exploring her unconventional journey into venture capital, early-stage seed investing in New York City, and Galvanize's hybrid model connecting education, community, and fund deployment. Shillo also shares strategic perspectives on hardware and IoT opportunities, fund deployment mechanics, and conversational AI.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 19.2% of the talking time here. How this is scored →
Harry as informed peer 2.3 Guest teaching 2.5 Guest disagreement 0.8 Harry pushing back 0.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:49 Correcting the Hardware Geek Label
Kate mildly resists Harry's framing of her as a self-confessed hardware geek, clarifying that the quote was taken out of context before explaining her nuanced view on IoT.
Hardest push from Harry ▶ 16:40 Pressing on Mobile Sector RiskHarry directly challenges Kate's heavy mobile portfolio weighting by bringing up Fred Wilson's pessimistic take on high mobile customer acquisition and retention costs.
Biggest teaching moment ▶ 11:16 Detailing Fund-Campus SeparationKate educates Harry on how Galvanize operates, clarifying that Galvanize Ventures is an institutional fund with a strict Chinese wall rather than a corporate venture unit.
Harry holds his own ▶ 19:34 Detailing Hardware Operational HurdlesHarry demonstrates strong knowledge of hardware venture risks by listing explicit friction points like tooling, distribution, and onboarding compared to software app downloads.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Kate Shillo's Unconventional Path: From Martha Stewart to Tech | 1 | 2 | 1 | 0 | Harry asks standard warm-up questions about Kate's career path. Kate shares her unusual background at Martha Stewart Living, describing how working closely with Martha was reminiscent of operating an early-stage startup studio. | |
| Launching Lerer Ventures and Early New York Seed Investing | 1 | 3 | 0 | 0 | Kate recounts helping Kenny Lerer launch Lerer Ventures out of Betaworks during the 2008 downturn. Harry asks general operational questions while Kate explains how they learned seed fund mechanics from scratch without formal venture backgrounds. | |
| Reflecting on Consumer Tech Investments and New York Ecosystem | 2 | 3 | 1 | 0 | Harry asks Kate to explain the structure of Galvanize and Galvanize Ventures. Kate educates the host on how the fund maintains an arm's-length institutional structure with a Chinese wall, while leveraging educational campuses for deal flow. | |
| Galvanize Ventures' Investment Strategy and Portfolio Dynamics | 3 | 2 | 1 | 2 | Harry gently probes on Galvanize's high volume of 48 investments in two years. Kate defends the broad approach, noting that remaining non-niched allows them to back diverse campus founders without being prematurely categorized. | |
| Navigating Mobile Investments, Hardware, and IoT Opportunities | 5 | 3 | 2 | 3 | Harry shows solid domain preparation by citing Fred Wilson's thesis against consumer mobile investments and highlighting hardware execution hurdles. Kate clarifies her stance on hardware and explains the data thresholds Series A investors require before committing. | |
| Patience in VC, Seed Fund Mechanics, and Future Growth | 2 | 2 | 0 | 0 | Harry leads into a rapid-fire round covering book recommendations and daily apps. Kate outlines seed fund economics, explaining why a $10M fund cannot meaningfully follow on into later rounds. |
Statements from this episode (13)
Galvanize Ventures Made 48 Investments in Two Years
“To date, Galvanize Ventures have made an astonishing 48 investments in two years”
Martha Stewart wanted to launch an internal wiki called Marthapedia
“She wanted to create Marthapedia.”
Shillo: VCs refused to invest in digital content startups in late 2000s
“No VC would touch content at the time.”
Shillo: Using Paperless Post for Ken Lerer's events led to investment
“Paperless Post was a perfect example of something that I used, I found, because I was doing events for Kenny, and I just didn't want to address all these envelopes, and he was like, oh, this is really cool, and I was like, actually, it makes a lot of sense, yo…”
Shillo: NYC tech thrives by connecting legacy industries with new startups
“And that was the whole push that we're now seeing, is that the New York market Is really working, you know, the older industry is really working with the new industry of consumer and e-commerce and content companies that are coming out of the startup world.”
Shillo: Galvanize Ventures is not exclusively dedicated to backing female founders
“I've been told I'm running a fund purely for female founders, which Would be awesome, but I don't happen to be. You know, that's just in the market because I'm a female working in VC.”
Shillo: Female VCs collaborate on deals significantly more than in the past
“Yeah, but I will say just one thing I've noticed between when I started doing this six or seven years ago till now, is that I'm seeing female VCs start to collaborate quite a bit on deals with each other, which is rad. I'm so psyched about that.”
Shillo: Hardware crowdfunding is primarily for advertising, not raising capital
“I don't think we think of it in terms of crowdfunding. I often think of crowdfunding as a bit of advertising. I mean, it's great to have that money, but chances are they probably raised around a seed round before that. So it's more about validating the custome…”
Shillo: Series A VCs will not invest in hardware before products ship
“I find as I'm an investor, a seed investor in a lot of these and talking to later stage investors, Their hurdle is shipping. If you haven't shipped your product and you can't talk about metric and how customers are engaging with your product, you're, they don'…”
Shillo: BuzzFeed has surpassed Huffington Post in market positioning
“You know, and something like BuzzFeed, which has surpassed Huffington Post, which is a lira investment, and Jonah was one of the founders of Huffington Post, he took what he learned from, you know, so he's been working at this for years and years and years and…”
Shillo: Galvanize's $10.2M fund writes $100K checks and skips follow-ons
“We're no longer doing follow-ons because it doesn't make sense for the size of our fund, which is 10.2 million dollars, and our initial checks are about a 100,000.”
Shillo: VC is highly stressful because investors lack operational control
“That it's easy. You know, I think from a lot of people looking in, it's fun because we're the ones controlling the capital, but it's incredibly stressful, and we're sitting in between having no control over the company, and hence the outcome.”
Shillo: AI messaging will enable direct transactions in Twitter and Messenger
“This technology will, through artificial intelligence, will allow those companies to be able to communicate on those platforms using, ah, transactional cards, which will be really exciting. So you could actually transact right there in Twitter and Facebook Mes…”