B.spkl co-founder: The killer sentence that sold us on our investor

In that typical New Zealand way, WNT Ventures partner MJ Alvarez and B.spkl’s Christina Houlihan have friends in common and met a number of times informally before the startup went looking for seed investment.

B.spkl is the first spinout from Crown Research Institute GNS Science and was co-founded by GNS ion beam material scientist Dr Jerome Leveneur and Houlihan, who formerly worked at EY, and on the commercialisation side at the CRI.  

B.spkl is developing a catalyst-coated membrane technology that overcomes bottlenecks in the manufacture of electrolysers in clean hydrogen production, and raised $2.8 million in an oversubscribed seed round in April 2023 led by WNT Ventures to scale up its breakthrough technology. That included a $750,0000 repayable grant from Callaghan Innovation’s technology incubator programme where investors are required to put in $1 for every $3 invested by the government.

There are other potential markets the platform technology could be applied to but the co-founders are focusing now on green hydrogen, which has the ability to cut carbon emissions and is in growing demand globally. The patented technology Leveneur has worked on for more than a decade reinvents an essential component of a hydrogen electrolyser catalyst-coated membrane, reducing the amount of costly iridium and platinum required. 

The cleantech startup’s biggest challenge so far has been finding talent and hiring that from New Zealand, given electrochemistry skills are in demand globally. One way it’s overcome this is to share people it can’t afford to hire on its own with others; one staffer, for example, works part-time with B.spkl and part-time with Victoria University.

It is also trying to create capability by bringing on two summer interns who could grow with the company.

B.spkl’s co-founders met up with Alvarez again when they took part in Creative HQ’s accelerator programme.

“That’s where we really started to talk about B.spkl and the opportunity and started becoming more than acquaintances in the innovation ecosystem to what I now call friends,” says Houlihan.

The startup had approached several of New Zealand’s specialist deeptech investment firms that the co-founders knew were interested in the technology. It ended up with a couple of term sheets on the table, and ultimately went with WNT Ventures.

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Caffeine talked to Alvarez and Houlihan about how they maintain their investor/founder relationship.

Why did you choose WNT Ventures over other investment firms?

CH: There was one killer sentence that MJ said, when I look back, that sold us, which was ‘we succeed when you succeed’. It’s been such an important sentence for us and is now one of our values as a company because underpinning that it was about building a trusted relationship; it became about having our values aligned, it was about having a shared understanding of the vision for B.spkl. As we had discussions we very much became aligned that our visions and our passions were the same, so that was a very important sentence to me that helped make our decision.

Why did you choose B.skpl out of the hundreds of approaches you get?

MJA: I think there is a lot of value in being in the right place at the right time. I had heard of B.spkl a few months prior to the accelerator but when we reconnected and I saw them at the Creative HQ showcase, then spent some time talking to Christina and met Jerome and started talking and discussing it, it felt that a lot of things that I was maturing in my thesis on hydrogen and energy were also maturing in how they were approaching the business. 

We do get approached by a lot of people but it’s about having the right people doing the right thing. I liked that it was a team with a vision, with a complementary set of skills, but also you just see when they’re good people to work with. This is a very long-term relationship so I choose very carefully how I am going to spend my time because we are very involved in the companies we are working with. 

What else did you get beyond money from the investment round?

CH: One of the key things we were looking for from our investors and our board in particular as well was around the value-add. We recognise that our problems aren’t unique. They’re unique to us but the things that we experience as startups and deeptech startups have been felt by startups across portfolios. There’s a lot of recognition that the capabilities that MJ  and the wider WNT team brings is there to help us and help us be successful. 

One of the key things I always make sure I’m doing is reaching out to MJ whenever there’s something around ‘how do we do this? What would be a better way? I’m struggling with this, has it been experienced before?’, so we have that really open, honest communication to get their knowledge and insights into what other people have done. It is super-valuable to me on top of just having someone who I can flick a message of complaint to when something’s not working and get a ‘it’s okay’. 

MJA: I am really fortunate that I get to work with great people, and part of that is seeing how people are growing into their roles, which have been the first time for them. The road to get to where we are now hasn’t always been plain sailing at the beginning. There were a range of things that are not not unique to B.spkl: getting a capital raise underway and then going from an idea to money to a team. That’s a lot of changes and seeing how the founders or executive team leadership evolves with that, it’s what I really enjoy. 

With Christina the range of things that we would work together on has been ‘how do we complete the capital raise?’ to moving to ‘how do we fit out the lab?’ and then ‘what are the key hires and how do we manage that team?’. All of those things I learn a lot by doing it with different founders and seeing all the perspectives they bring, but it’s just really joyful seeing Jerome and Christina build this thing that was their dream and how we have a space and have people.

Where are you based?

CH: We’re in Wellington. There’s an emerging little deeptech hub, which has Hot Lime Labs, B.spkl and the Robinson Institute based on the same site, so we’re a cool little collaborative environment.

So the main value to you has been advice?

CH: Another aspect is that when we were first founding the company almost 18 months ago I was still working full time as a management consultant and for a while MJ really came and formed the third leg of B.spkl while we were still forming and setting up and getting running. And capital raising – that was incredibly valuable until I and Jerome could jump in with both feet 100 percent of the time. So it was not just advice, it was actual physical lifting of some of the load to get us off the ground.

How often are you in contact?

MJA: Formally we have the board meetings monthly but then informally we have a very active chat. There are degrees of importance. So there are things where I need something now and then that’s ‘okay this is what I need and here in five minutes’. Then there are other things that they know I will get to them and I’m a very big fan of audios in What’s App and I compile a bunch of messages in that, so ‘this is what you need to do, this is what I think, or have you thought of that?’ We’re in almost constant communication one way or another.

CH: It’s definitely more than the rest of my investors. It’s more on a quarterly basis with them – some of them slightly more often depending on how often they would like to reach out and be in contact. Everyone is an individual, but MJ is more on a daily or at least weekly basis.‍

Is that level of contact likely to drop off as the company matures?

MJA: I have this conversation with all the companies that I’m bringing on. I always tell them I’ll try to make myself redundant as quickly as possible – that’s one of my goals. But it depends on the founders, it depends on the company, it depends on the dynamics and how many people there are. 

If there is one person doing everything it does require more support. It’s important because of the mental load to set up a company and grow a company, just to be there. I’ve done it myself and now I’ve done it with founders for years and I really enjoy that setting-up process. 

It’s always about trying to be the person I didn’t have when I was starting my own company. But at the same time also recognising my job is not to get in the way; I’m not running the company and I’m also trying to make myself redundant in a way that the company outgrows my knowledge and my advice as quickly as they can and then ‘how do I plug them with the next level of support they need?’ To me, that is success in terms of this relationship.

Why did you go for a formal board over an advisory board?

CH: When we got our investors on that was something that both WNT wanted but also in order to make sure that we were acting in the best interests of New Zealand with the IP we got from GNS they were keen they remained connected to B.spkl in our formative, early years as well. 

What is the difference between being a CRI spinout and another kind of startup?

CH: Being connected with GNS has definitely been an advantage for us. We have been able to leverage some of the equipment and services that we didn’t have the ability to build up ourselves right from the start. We’ve been able to go back to GNS and ask to use that thing  that we developed this on, and to access some of the capability and knowledge Jerome also came from. So there is a wider team of specialists in there that we have, and having the knowledge of John Sharpe [GNS deputy board chair] and his experience raising startups himself on our board has also been really useful.

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What are the three key things important to a founder/investor relationship?

MJ: 1. Authenticity and transparency: It’s really important not only to measure a [company’s] value but also in the people I’m working with. When founders are in pitch mode it’s very easy to go to the glossy version of the story, but what I really care about is ‘can I work with someone that is giving me their authentic self, whether that’s a good day or a bad day?’ Everyone has those, so it is more like ‘how do we deal and grow with that?’.

2. Excitement: I see hundreds of companies per year and I don’t get excited about that many. Seeing the ones I am excited about, but also the team needs to be excited about it. If they don’t have that sense of urgency and excitement that this is what is going to change everything then I can’t have it for them.

3. Being a good person: It is obvious but just being a good person, the bar shouldn’t be that high for that. Startup life is tough and I think it is quite glamourised, that whole startup investment space. The reality is that when we set up B.spkl lab it was just an empty room and a table and there is not much glam associated with that. It’s just more being a good person through the highs and the lows with investors and founders, as in the end that’s going to get you a lot further ahead, even if your company doesn’t succeed.

CH: 1. I love MJ’s answers; I should have gone first. Trust: being a CEO or co-founder can be quite a lonely place in the world because very few people travel this journey with you outside of your work life. The trust needs to be there in order to reach out for support, help and advice, and to know that even when things may not be going 100 percent to plan you can trust that you can tell them and they’ll still have your back.

2. Open and transparent: With trust, it’s that open, honest and transparent communication – and both ways. We have to be open and transparent, but also [hear] back from our investors on what is good, bad and ugly – or better, it’s good to hear back.

3. Friendship: Being able to build up the relationship to a point where you call each other friends, because if you can be friends with someone during this process, it’s a lot more fun than just being colleagues. You can get more enjoyment out of it.

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