When an investor is a “real champion” for a startup

After Dennisson Technologies founder Anvil Bañez set up his wearable tech company in June 2020 in the middle of Covid, he realised he needed new lab space. It got to the point where suppliers weren’t happy to continue sending the amount of chemicals they needed to a residential address.

New Zealand Trade and Enterprise recommended the CEO approach Auckland-based Level Two (now Outset Ventures), which provides lab space to startups, along with capital via its deeptech fund.

“It got to the point where they said ‘hey, this is really awesome, we’d like to support you on this through investment’ and the fool I was, I was shrugging it off a little bit saying ‘I’m not looking for investment, I just need lab space’. Eventually I realised I really do need money to start up,” Bañez says.

Dennisson Technologies raised $150,000 from Outset Ventures and then did a second $1.58 million round led by Icehouse Ventures in 2022.

It has developed AuraFlex, an actuation module that can create motion in a slim package. Bañez describes it as a “completely new engine for movement”. Its working prototype, contained within force feedback gloves used for virtual reality, has previously been described as a muscle that you could put on like clothing, which will move your body for you.

Its platform technology can be used in many applications including virtual reality haptics; assistive apparel, such as clothing for work safety or rehabilitation; and soft robots, which have soft muscles rather than rigid motors. Right now, the company is focused on applying it to assistive and adaptive apparel.

The startup hopes to have its first commercial contracts within the next year and a product containing its technology on shop shelves within three years. 

There’s a mission behind the company – Bañez wants to help his father, and the company’s namesake, to walk again. When young, Dennis Bañez contracted polio, which has hampered his ability to walk on his left leg. Despite that, he became an award-winning powerlifter and opened a gym. 

His son wanted to create a superhero spandex his father could use instead of a leg brace to help him walk, and Anvil has been working on exoskeleton prototypes since his fourth year of university engineering study. He was still completing engineering officer training with the Royal New Zealand Air Force when he decided to set up the company. 

His wife Kim – a chemical and biological engineer who he met while at university – started helping in the business in late 2020 and became chief technology officer in 2021. 

Angus Blair, a partner in Outset Ventures, became involved with Dennisson Technologies on his first day on the job and Caffeine talked to them both about how they met and the value of their relationship.

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How did you meet?

Anvil: I was still training at the airforce at the time and flew from Blenheim to Auckland just for the day to pitch to Imche [Veiga, former Outset CEO] and Angus. It was both his first day from the investment side and me from the founder side.

Angus: It was quickly passed to me by Imche and I started to structure what would end up being my very first deal. I think I knew more than Anvil at the start but it wasn’t a lot. It meant we were both learning how to do this on the fly and I think that is part of what made us able to be so close. 

Often when a founder meets a VC there’s this gap because it might be the first transaction the founder has been through and the investor has usually done dozens. We were more similar from an experience standpoint.

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What has been most beneficial to you from this relationship?

Anvil: Angus specifically has been just above and beyond in terms of helping Dennisson. He’s been a real champion for us. Cash is always one thing but I think the value that Angus has brought us in the last few years has been he’s always welcomed being a sounding board for us. 

As young founders and first-time founders, some things you don’t know what you don’t know. Angus has been able to coach us through a few things, whether that’s investment or reviewing our financials and how we’re doing and introducing us to other VCs and potential customers and end users. 

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What attracted you to Dennisson?

Angus: My first impression was Anvil is someone who is not thinking about entrepreneurial startups; he’s thinking about problems and solving them. That’s what being mission driven is. Growth founders eventually get obsessed with venture building as well, but in deeptech ventures, where the R&D road is going to be long, you need to find someone who’s obsessed with the actual problem they’re solving and the technology they’re building. 

They need staying power. When you’re trying to develop something like a new material to be a flexible exoskeleton, this isn’t something that’s going to be easy and it’s not something that is going to make you a lot of money in the near term as it’s going to be a long way to go before this company is ready to have a product in market. Staying power only comes from that sense of mission; it can’t come because startups are fun and it’s a cool lifestyle and people call me a founder and I’ll go to the right parties. 

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Have you pivoted the original idea of an exosuit?

Anvil: Dennisson has spent the last year figuring out where we actually fit and what value we bring to the industry. Initially I was thinking I was going to make an exosuit so that I can help my dad walk or get people out of wheelchairs, and what we quickly found was we weren’t the exoskeleton company, we weren’t the product company. We had a technology that could enable the ability to provide motion but in a package that is slimmer, lighter and more comfortable as a wearable. Essentially doing what Iron Man does but in the form of Spider-Man.

With that understanding we went back to the market and got a lot more engagement from many different industries. The last year has been a narrowing-down exercise for the company of understanding ‘hey, we’ve got all this interest and it can go into many different applications but where’s the first application that we want to land into?’ and we realised that it really is in the wearable side. We want to apply the technology to things like spandex to provide assisted capability. Similar to what the e-bike did for cycling, we’re trying to do for wearables. 

Angus: They went through this incubation process with us where we’re pretty hands on. That normally looks like a two-hour workshop every fortnight for about six months and dozens of other touchpoints through the week on an as-needed basis. They went through two major pivots during that time: they changed the core material that they were using from electroactive to light-activated polymer, and also changed their core application from medical device rehabilitation into the force feedback glove application. 

Since then they have narrowed it down to where the actual person in-market will end up being much more likely to wear it. Their main goal at the moment is to improve the underlying performance of the material. 

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Do you have a working prototype?

Anvil: We’ve got a full-scale wearable glove prototype to showcase in November. The prototype is in the glove format mainly because it’s the easiest embodiment to demonstrate the wearable technology. But really what we’re showcasing is the muscle itself – the module technology that makes everything work. It could on a glove, it could be on leggings, it could be on back support, it could be on many things. 

Angus: Sean Simpson’s [LanzaTech founder and Outset investment committee member] key insight was this is a true platform technology, which means it has a lot of different markets and that manages the market risk for us. We’ve got to get to a point where we’re producing this material that’s very high quality, very high performance, has those strength characteristics and that we’re producing at scale where the economics makes sense. So there’s a heap of technical risk to overcome. It’s about finding the right commercial partners and hitting the milestones on the way but we know this team can do that.

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Do you have other mentors?

Anvil: One of the other mentors I had was Michael Blackhurst who was in Fisher & Paykel Healthcare for 23 years. He’s moving from an advisory role to a consulting COO role, helping us commercialise the product. We have advisors in the US as well that are well connected in the wearables industry, and we also have advisors on the healthcare side as it’s not just about a product, it’s really around how we’re helping the users. 

We went through the Startmate accelerator in 2022 as well. Their mentors have been very valuable in helping us understand our position in the market.

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How will your relationship change as the startup grows?

Angus: It will definitely change eventually and the amount of advice that we’re able to give changes as the business adapts. Anvil is always having to learn to do new things that he hasn’t done before and that will continue for a while. Eventually we’ll still want to have five-minute chats, as we’re always learning from our founders as well. And if we’re understanding the nature of the challenges he’s going through on any given day we can connect him to someone in our network who has gone through those as well.

Anvil: Angus is helping us obviously as an investor but I know that he has proper interest in the company and where we’re going. I do see our relationship being sustained. He’s always going to be there for us, which is one of the values I’ve found with him. He’s not just in it because we’re a return on investment; he’s been a real champion for us and I think that will continue and I want it to.

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How proud is your dad?

Anvil: He’s happy and he’s proud, and I’m happy about that as he is the whole reason I’m doing it. We’re very close as a family and do Messenger calls every weekend and I update him on what we did last week. He’s just pretty happy with the fact that a lot of people could be helped by this type of technology; he doesn’t really focus on himself. Ultimately, I’m going to get the guy walking again, whether he’s humble about it or not.

What are the three most important things in a founder/funder relationship?

Angus

1. Trust: Both parties have to trust each other in order to work together in making the company a success.

2. Candour: Both parties have to feel comfortable speaking frankly and hearing feedback.

3. Knowing your role: The funder is not the founder and needs to remember that for the relationship to work.

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Anvil 

1. Understanding the founders: Understanding not just the startup but a true understanding of who these founders are as people, more than just their role as CEO and CTO.

2. Vision: It’s good to have someone from the outside who can remind Kim and I that there are a lot of flashing lights here but remember this was your vision – it’s in the name of the company.

3. Availability: As busy as he is, Angus has provided his time even if it's just as a sounding board. Part of the reason for that is we’re in the same building and it’s easy to catch up with each other when the need arises.

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