For Matthew Goldstein success began with failure. In 2009, he was one of the first hires for Next Autoworks, an early-stage automotive startup that failed within two years of his joining, despite raising $110m in venture funding from the likes of Kleiner Perkins Caufield & Byers and Alphabet subsidiary GV (then known as Google Ventures).
“It was a disaster,” Goldstein said. “We lost everything, but I learned much about the startup ecosystem and the roles that investors play.”
Leaving the wreckage of Next Autoworks behind him, Goldstein got his MBA from Stanford University and then spent four years as an investment principal at venture capital firm Trinity Ventures, investing in cybersecurity, software-as-a-service (SaaS), financial technology (fintech), devops (development and operations) and cloud infrastructure. Some of his investments include lending marketplace Dealstruck, app development platform Docker and cybersecurity firm Harvest.ai, which was acquired by Amazon for a reported $20m in January 2017.
Now Goldstein finds himself at Microsoft Ventures, having left Trinity in mid-2016 to help Nagraj Kashyap launch the software provider’s early-stage corporate venturing group. Kashyap, corporate vice-president and head of Microsoft Ventures, said Goldstein covered what they call “the middle of the stack”, making use of his experience investing in devops, security and fintech.
Having made the jump from traditional VC to corporate, Goldstein said corporate venturing had the potential to be better for both entrepreneurs and their limited partners.
He said: “With so much capital flowing into the ecosystem the best founders have their pick of investors. By bringing to bear the brand, resources and relationships of the corporate parent, CVCs have the potential to meaningfully change the trajectory of the companies they back. This earns us a seat at the very best of tables.”
He described the relationship with Microsoft as critical for the startups the fund invests in.
Kashyap said: “Our promise is to provide access to Microsoft for the investments we do. To help them amplify their business using the relationship that Microsoft has, whether it is on the product side, the sales side, the marketing side, and help the companies we invest in to build a deeper relationship with Microsoft, but also with our ecosystem of partners, as part of the fund.”
However, with Goldstein’s optimism about the potential of corporate venturing came a note of caution. He said there was still work to be done before CVC could truly break out.
“We have a window of opportunity, right now, to change the perception of corporate venture, to elevate it to a professional capability, developed and nurtured, versus a side-project for so many vice-presidents of finance, marketing or strategy,” he said. “Only when organisations commit to the entrepreneurial ecosystem and build the right teams with the right incentives will the industry break out.”
Goldstein is doing his part to make the most of that window of opportunity with an impressive list of investments for Microsoft. They include backing marketing platform developer Dynamic Signal as part of its $25m series D round, contributing to industrial 3D printing platform Markforged’s $30m series C and leading a $26m series B round for AirMap, the US-based developer of an airspace management system for drones.
At the time of the AirMap investment, Kashyap said: “We are excited to support their growth and, by extension, the growth of commercial and recreational applications for both piloted and autonomous drones. We believe that by investing in companies like AirMap, Microsoft’s resources, platforms and AI technologies can help fuel the future of the drone ecosystem.”
Goldstein has not had any exits yet in his time at Microsoft Ventures and he cannot pick one investment he is most proud of. “I love all my children equally,” he said. However, he did speak with pride about the team that they have built at the firm, which has also been one of the biggest challenges faced there.
“We have grown incredibly quickly, from five investors at launch to 11 now, plus another six-person value creation team,” Goldstein said. “We have built everything from scratch, from our deal customer relationship management and portfolio tracking tools, to our brand, processes and advisory relationships. It has been fun to feel like a startup ourselves, but a ton of work.”
While his story may have begun with failure, Goldstein sees more success in the future. For himself he plans to keep making, managing and exiting investments in great companies. “That is my jam,” he said.