May 19, 2021

Transforming Foundational Industries

Augmented reveals the stories behind the new era of industrial operations, where technology will restore the agility of frontline workers. 

In episode 18 of the podcast, the topic is: Transforming Foundational Industries. Our guest is Dayna Grayson, General Partner and Co-founder of Construct Capital, a newly formed VC firm.

In this conversation, we talk about how Dayna became a trailblazing female VC, her early thesis around the SaaS model as transformative for industry to avoid ERP lock-in, her experience from being on the board of many famous startups, including Formlabs, Desktop Metal, Onshape, and frontline operations platform Tulip. She explains why she co-founded $140m fund Construct Capital in late 2020. We discuss how software is transforming industries that have arguably been somewhat stale since the industrial revolution. She shares her approach to invest in and scale the startups by non-linear and product design aware founders; we look at some recent investments of hers, engineer workflow tool Copia, EV charging software ChargeLab, fresh food assembly automation Chef Robotics. Finally, we touch on the future of manufacturing. 

After listening to this episode, check out Construct Capital as well as Dayna Grayson's profile on social media:

  • Construct Capital (@constructcap):
  • Dayna Grayson (@daynagrayson):

Trond Arne Undheim: "My takeaway is that Dayna Grayson is right about factories. The factory floor is a too limiting framework to use to understand emerging manufacturing firms. Production facilities might also become microfactories, industry products become tech platforms. What does industry look like 15 years from now? We won't even recognize it. The foundation is changing. Foundational industries, yes, but created in new types of foundries."

Thanks for listening. If you liked the show, subscribe at or in your preferred podcast player, and rate us with five stars. If you liked this episode, you might also like episode 14, Get Manufacturing Superpowers, episode 10, A Brief History of Manufacturing Software, or episode 11, Empowering Workers to Innovate. Augmented--the industry 4.0 podcast.


#18_Connecting, Automating, and Transforming Foundational Industries_Dayna-Grayson

[00:00:00] Trond Arne Undheim, host: [00:00:00] Augment. It reveals the stories behind a new era of industrial operations where technology will restore the agility of frontline workers. In episode 18 of the podcast, the topic is transforming foundational industries. Our guest is Dana Grayson general partner and co-founder of construct capital, a newly formed VC.

[00:00:23] In this conversation, we talked about how Dayna became a trailblazing female VC, her early thesis around the SAS model. It's transformative for industry and her experience being on the board of many famous starters, including Forum, lapse, desktop metal, Onshape, and frontline operations platform too. She explains why she co-founded the 140 million fund construct capital.

[00:00:45] In late 2020 we discussed how software is transforming industries that have been somewhat stale since the industrial revolution. She shares her approach to investing at scale to startups of non-linear product design awareness. [00:01:00] We look at some recent investments, numbers, the engineer workflow tool, Copia, Evie charging, some for charge lab, fresh food assembly, automation, chef robotics.

[00:01:11] And finally we touch the future of Manufacturing. Augmented is a podcast for leaders hosted by futurists, Trond Arne Undheim , presented to the frontline operations platform and associated with MFG works. The Manufacturing upscale community launched the World Economic Forum each episode dives deep into a contemporary topic of concern across the industry and airs at 9:00 AM Eastern time every Wednesday. Augmented upskilling the workforce for industry 4.0 frontline operators. Dana, how are you doing today?

[00:01:46]Dayna Grayson: [00:01:46] I'm great. Thank you for having me.

[00:01:49] Trond Arne Undheim, host: [00:01:49] Yeah, I thought we'd talk about foundational industries. It has to be a topic you're increasingly interested in. So Dana  you started out as a systems [00:02:00] engineer, so you were already in the engineering space but then you had certainly a lot of interesting career experiences. And importantly, you were involved in product design at the backboard and then went on to Harvard got your MBA. You've been involved in several VC firms and now you're starting your own. What would you say got you on this track? It is a very specific track for. For a woman to be a VC in foundational industries, which we're going to get into it's very special. How did you get there?

[00:02:34] Dayna Grayson: [00:02:34] Yes.  I started when I was in college, I majored in engineering and I had the opportunity to work with a couple of founders on an eye-gaze technology that they had commercialized into a company and so that was like my first taste into entrepreneurship and  this was in the late nineties. So there's also a lot going on in the startup ecosystem and it was the heyday of boom. And [00:03:00] so everybody was raising capital and so it was a great time to kind of grow up, in the venture world and understanding technology companies get funded and how big they can become. I then went on and joined Blackbaud after college, after a brief stamped in consulting.

[00:03:16]And similarly, actually fast forward to that time, bubble had burst already and and Blackbaud still was growing really well in the midst of that. And that just, Speaks to the real product value and the value they're providing for customers at the time. But they had raised a growth equity around the capital from, I think it was JMI and Hellman and Friedman, and we're really doing quite well. So I had the fortune of not having to be miserable in bust, but actually going through a growing tech company. And I was still working. On the engineering side and the product development side and the design side at that time not certainly on the investor side yet. And so I described my career up through working at Blackbaud is kind of [00:04:00] applying my engineering experience from undergrad and really seeing how companies were built from the bottoms-up.

[00:04:06]It was after Blackbaud went public and I went to business school that I started becoming curious about how companies were built from the top down, from the investing side, from the board management side. And certainly from the entrepreneur's perspective. And so really like, it was the turning point of me going to business school and then getting exposed to more venture capital careers and opportunities that I thought, Hey, this would be a great way down to approach entrepreneurship world. So I joined a venture capital fund in Boston, and I guess the rest is history because I've been in venture capital ever since.

[00:04:44] Trond Arne Undheim, host: [00:04:44] So the rest is history. What was it? An instant love affair with venture capital? Did you enjoy it basically, I guess in college already, you were exposed to it and you were a per using and I guess in going to lectures and talking to VCs, but you instantly just [00:05:00] discovered this was a big passion.

[00:05:01]Dayna Grayson: [00:05:01] Yeah, I would say I was definitely training and learning. What is it all about? I think definitely I would like to think anyway, that my experience on the engineering side and product development side and working on the operating side gave you some empathy for what, at least operators, if not entrepreneurs were going through, as they set up their companies. And certainly as they built their companies, It also gave me some insight into great success because Blackbaud had, has had, and has still been a successful public company into, to what success really looks like. So I was really excited by the opportunity to get in on the ground floor, working alongside or supporting other entrepreneurs as they began that journey.

[00:05:45] But i would say, what really developed over my career was this focus and specialty. Where do you find your niche? I, issue the purpose of some venture capitalists to come in and say, I want to focus on X and then they just go focus [00:06:00] on X. Your expertise, and where you choose to focus is really born out of your experience. For some that comes directly out of their operating experience when they become venture capitalists, they're able to apply that and really focus on opportunities that they know well. For me, it was born out of my investing experience over the years. And I had the privilege, to join NEA in 2012 as a partner. That's where I, invested in Tulip for example.My first investment, there was a company called Onshape and it was in the CAD space.

[00:06:30] And, really, if you were to say, I guess the rest is history from there on, it would be starting with that investment because that's where I got exposed to the manufacturing space. And all the things that are yet to be digitized in the areas around manufacturing and supply chain.

[00:06:46]Trond Arne Undheim, host: [00:06:46] People who know you that I've talked to, they say that not only, obviously are you very passionate and focused and knowledgeable around Manufacturing, but you also brought with you, some of this eye for what the [00:07:00] consumer or the clients really want from your product design background.

[00:07:03] Can you give me just, I mean, you've been involved in quite a few investments before your current fund, but so you said Onshape was pivotal and that's a great company that then got acquired by PTC. You've also involved I've been involved in Form labs. And desktop metal, and other 3d printing company  before you also then were on the board of Tulip.

[00:07:28]What was special about those companies and what did you learn in those companies that sets you apart from the rest of the enough that you have developed this thesis? We're going to talk about in a second.

[00:07:39]Dayna Grayson: [00:07:39] I mean, you learn so much, mostly from the entrepreneurs that are leading those companies first and foremost, you learn about different entrepreneurial styles. And you really learned that there's no one way to skin the proverbial cat, every, whether it's more of an engineering focus company, whether it's more of a engine culture, whether [00:08:00] it's a market driven culture, those are two different paths that different entrepreneurs take. But beyond that, it's very individualistic.  I would say I try to really work with, every entrepreneur that I backed, I tried to find that thing that's going to be really attractive to everyone that crosses paths with him or her. It, what does that drive? What is that thing that's gonna make the first employee and the last investor, both equally excited to say this, person's going to change the world.

[00:08:29]And then it's about once you make that decision kind of working, and supporting that entrepreneur  to be able to continue to hopefully change the world, right? Giving that person the resources that you can bring to bear, whether they're financial or advisory network or talent and kind of giving them the most leverage to be become successful.

[00:08:55] Trond Arne Undheim, host: [00:08:55] When you speak about it this way, it sounds so easy, I've come across a lot of [00:09:00] investors. It's not always very easy to see how they operate and how they add value. It's a little bit of an invisible way that a venture capitalist works with a company.  What were some of the things that you learned along the way? And if anything, where they transferred, like how to become successful as a board member, working for for NDA or other things where there was also just things that you were learning on the job, or are there actually ways to pick up how you become more efficient or less, I'd working with these founders and like you said, extracting. The best from them and also giving them the best opportunities from the perspective of obviously not being involved in the day-to-day running. You're not really in a hyper privileged position in the sense that you don't have the time and luxury to spend all your time. I was assuming on any of these companies at any given moment.

[00:09:54]Dayna Grayson: [00:09:54] You definitely don't have the time or  the entrepreneurs have the time and that's not [00:10:00] your role to be spending, tons of time with each company. They have a company to run and employees and customers to serve. I think you've kind of  recapped it pretty well and that as a board member, I would call it her as an investor.

[00:10:15] Your job is to figure out how the provide the most help with the least amount of distraction and when it can be most helpful knowing what to get involved in and what not to get involved in what to weigh in on and what not to weigh in on is kind of the difference between the best investors and the best board members and the worst, in my opinion.

[00:10:36]Also recognizing. That it's your opinion and that's really all you can give and knowing Winton's or your opinion. And when not do is certainly a difference maker for some companies and entrepreneurs. I'll also say that it's something you learn over time, venture in general and startups more broadly have changed from almost like a cottage industry [00:11:00] 20 years ago. Where it was definitely very individual, very service level. Really cottage, is it going to scale? Can you provide this in a repeatable fashion into a much more institutional industry today, venture capitalists and entrepreneurs can read and learn a lot without having to be on the job.  and that's perhaps thanks to the internet, but also thanks to the number of entrepreneurs and venture capitalists. That I've tried and found and try it again over the years then provided all the data for others to learn from. Without that though, you really do have to keep just trying to and failing and tweaking your style and tweaking your focus and and hopefully landing on some great opportunities in that, in the meanwhile. But I'd say traditional.

[00:11:46]Trond Arne Undheim, host: [00:11:46] So the startups though that you have been involved in, have, I mean, w almost without exception have been enormously successful. And th this is not, I mean, surely NEA, it does invest in good [00:12:00] companies, but the companies that you were involved with, they were all extremely successful. What would you say that you brought with you and we can get into kind of the fund that you created? Was it the thesis around exactly how those companies operated or, what sort of re pattern recognition is it that you think was the most valuable in conceptualizing this next fund of yours? Was it something specific about what any of these four or five companies were involved with, or was it more. The founding teams had something special that you now think you have a secret sauce at finding and working with, or how would you describe kind of the competence more in detail? It's very interesting.

[00:12:41]Dayna Grayson: [00:12:41] First, all the credit goes to the founders because it will always be the founding team and you can have a methodology for how to invest, but it's ultimately your access to working with the great founders that are going to dry, great returns and build great companies that is most important. Guess I've been fortunate [00:13:00] to, create networks and be around some of the entrepreneurs and and they've enabled me to work with them over time. That's created that success. But second of all, in terms of your question around, why did we jump off and do this fund in a dedicated way, focused on foundational industries, because as you noted, I was investing in these spaces previously at NEA.

[00:13:19]But my partner, Rachel, who was early at Uber and scaled and around the U S and Canada for that company, and then ran the new mobility business. We gotten to know each other over several years, while we were both in our past jobs. And we noticed one thing and that was that if you look back historically at second there's of the text-based individual World that have drum really great value driven, really great value enterprise software, for example, or consumer internet, those are two well-known areas in the venture and tech world that.

[00:13:54]You went back 20 years in the case of enterprise SAS, Salesforce was just [00:14:00] starting, SAS, was not considered to be a great model yet the ERP solutions were around, but yet there was a vintage, a few vintage years, late in the 2000 tens 2008, 2010, that.

[00:14:15] Really you for the investors in the companies that really started, then that was kind of the turning point for early stage venture capitalist of if I got into, SAS companies back in that time period, and really stuck to my knitting and kept investing there and staying in those faces over the next five to 10 years, you really got in early, you saw the change and you drove some really enormous returns for your investors.

[00:14:39] The same thing happened with consumer internet. If you look at foundational industries where we're investing you see this brewing, on Jake does some metal Form labs, a number of other companies that I would say are just starting that wave of innovation. And so if I zoom out as a venture capitalist, I say, okay, I've got early proof that there's going to be [00:15:00] a real turning point in these industries, manufacturing, supply chain, production of any sort.

[00:15:06] And now the time to really double down on that. Early stage investing focus and build a whole portfolio around it. And we have seen, we've been seen, we've seen increasing number of investors, turning their attention here just as they did in the enterprise SAS space in the period from 2010 to 2015, same thing with consumer internet.

[00:15:27] I think we'll see more and more people turning their attention to these foundational industries, but we feel like it's a time to have a dedicated fund.

[00:15:35] Trond Arne Undheim, host: [00:15:35] So you're a fund is called construct capital and as the title of the podcast is not just foundational industries, but you have these three verbs, so connecting and automating and transforming what is a foundational industry and what makes other industries less foundational? It's a very aspirational.

[00:15:54] Dayna Grayson: [00:15:54] Thank you, I suppose, because we use it well, this group of industries and we're glad [00:16:00] that it's resonating with people that we named, these group of industries that make up half the GDP, that have. Been around for hundreds of years, since the industrial revolution, in some cases, they haven't really changed the way they operate since the industrial revolution, but they still drive over half the GDP.

[00:16:17] But, they have not been it enabled. They have not been digitized and not been tech enabled. They did not have a modern it stack, let alone digital processes that run employees or, back office tasks on a daily basis. So those are the obvious ones. Here are Manufacturing supply chain and logistics mobility and transportation, where Rachel has spent a bunch of time, but it also encompasses.

[00:16:46] And the reason we call it foundational industries and encompasses a number of sectors that support those sectors, like financial services, business services, workflow automation productivity, legal. Education, even we're seeing a number of things in the [00:17:00] education space right now. So it encompasses a lot of other foundational industries outside of those three main ones.

[00:17:06]But you mentioned connect, automate and transform. And that is the three areas that we look for businesses bringing digitization or bringing it enablement functions to those industries through.

[00:17:21] Trond Arne Undheim, host: [00:17:21] Can you give me some examples? I know you've made some investments already. One that I caught my, I guess, was the engineering workflow tool. Copia is one of them. What was it that made you invest in that? In what, how do you envision that's a product is going to kind of I guess connect, automate, and transform or either.

[00:17:43]Dayna Grayson: [00:17:43]  They only have to do, we used to be like, you only have to do one of those things. Do have to meet, the reason we break it apart between connect, coordinate and transform is you do have to meet the industry where it is.

[00:17:53]Some companies or firms is say, we want to be automation firms, or we want to be deep technology, breakthrough technology [00:18:00] firms. You, everyone has to pick where they're going to focus. And we stipulate that in some cases on the manufacturing shop floor. Yes, we all want to automate the actions here, but sometimes they're missing basic connectivity.

[00:18:12] They haven't moved to the cloud yet. They don't have a modern it stack.  and so you mentioned Copia, Copia is a company that's really establishing like modern developer operations in the industrial world. We forget that, we really benefited from that. And then in general, it space how developer operations work, moving to the cloud, how you in code, how you collaborate around code, how you do the remote deployments without it guy coming to your workstation, how you monitor for uptime.

[00:18:44] All of these things are automated in the it world. They're still very manual. In the industrial world the machinery is all instructed by local code and in some cases, the it department quote, unquote really doesn't even have a view of [00:19:00] what code is out there or what machines are actually working.

[00:19:02]And so we invested in Copia because they do have this vision of creating this code, cohesion across machines. How you can monitoring collaborate in how code is being developed and then eventually how you can do remote deployments and better cloud monitoring across your production environment.

[00:19:23]Trond Arne Undheim, host: [00:19:23] That's interesting. It strikes me though that a lot that the companies are going to span an enormous sphere of activity, just to bring up one of the other investments you've made in charge lab, which is an EVs charging software infrastructure play. I guess that's quite different from an engineering workflow. So first off that company what's interesting about it to you and also, how do you really wrap your mind around? I understand you're investing in it. You're not day-to-day, explaining every detail of each business, but these are pretty different areas. [00:20:00] They may be all foundational, but this is really challenging for a right now. I guess you're at the core team. You're two people. It's very ambitious.

[00:20:09]Dayna Grayson: [00:20:09] I'll point out. First of all, that the lab, for example, is in the mobility and transportation space. An area that my partner, Rachel, who works with that company knows better than I, I do. So we do have some degree of specialization even within foundational industries, but there is commonality between all of our investments or most of our investments, I won't say forever, but most of the investments, and that is number one, they're all software based.

[00:20:33] So we're really looking for disruption through software. So both in the case of Cobia, which is an industrial, automation, it, the ops solution. And in the case of charge labs, which is a charging, an Evie charging play, it's a software company. You, there are a number of hardware companies that are creating hardware, charging stations.

[00:20:54] We decided we really want to.  focus on how software is going to be leveraged across a [00:21:00] number of hardware, starting stations. And this company, based in Toronto has a really great solution there as well as some really early and, but promising partnerships with the hardware providers. So we believe that this change needs to come through software through all these industries.

[00:21:16]And then the second thing that I think that unites. All of our companies is we look for companies that can go to market pretty quickly. It's not a long sales cycle. It's not a big hardware deployment cycle. It's not a deep tech innovation. They may have had a deep tech or breakthrough tech innovation, but it's been proven and now they're packaging it with software and bringing it to market.

[00:21:38] So we definitely love companies that have. Technical barriers to entry in and a deep technology inside the company. But we want to see, how are you packaging and bringing it to market Parkway through software?

[00:21:51]Trond Arne Undheim, host: [00:21:51] If I just was to hit on one more, you're also in fresh food assembly automation with chef robotics. That's a whole, that's another space really [00:22:00] exciting with food tech is something. Yeah, I guess everybody loves that. I discovered when I was at MIT, it's like the impossible, not to be fascinated by food technology,

[00:22:10] Dayna Grayson: [00:22:10] but yeah, but chef for example is at its core, I Manufacturing company because they're assembling parts, they'd go into a finished product.

[00:22:21] Trond Arne Undheim, host: [00:22:21] So that makes a lot of sense. That makes a lot of sense. Are you having a lot of fun with this new venture of yours?

[00:22:26]Dayna Grayson: [00:22:26] We are, we're having a ton of fun. We're just stacking out now that people will, hopefully we'll be getting out at some point in 2021, we'll be opening an office. So we're just doing the build-out on that. We've hired a couple of folks. We're going to be hiring more. We have these working points of view to help us stay focused as you. Picked up on, we have one in Manufacturing, we have one in mobility, one in supply chain. And so we do go deep. We hope we're never going to be smarter than the entrepreneurs about the spaces that they're in, nor do we want to be.

[00:22:57] We want to do that. The ideas come from the [00:23:00] market, but we do want to come at our investments with a research based approach. So that's what our team helps support us on.

[00:23:08] Trond Arne Undheim, host: [00:23:08] So you said you invest in, in companies that already have proven their technologies and you want it relatively quick go to market and product market fit. But how long is this transformation of broadly of these foundational industries, which you pointed out it's taken more than a hundred years for some of them to slowly transform some of them faster than others. How much longer is it going to take before they transform? Or is it just an endless process?

[00:23:36] It seems like you're saying the insertion of a SAS type software platforms is going to really accelerate this. And there, there is a theme to the kinds of digitalization that you are supporting with your investments. Is this now going into a very fast cycle where we're not going to recognize the industrial companies of tomorrow from the ones of the [00:24:00] past or are we still in the era of this is hardware in it. It is slow. And these markets are going to be slower than the typical venture returns. I'm just asking that question, I guess, because in another sort of converging sector right now, there's a lot of attention amongst some of the same players, by the way. So I wanted to ask you a little bit about that environmental turn of industry right now, but that's, even in the clean tech space historically there was this boom and people invested in clean tech and then they got out because. Guess what? It wasn't so wonderful. As everybody thought it was still hard, there was new technology, but it took time.

[00:24:38] Dayna Grayson: [00:24:38] That's the period we'd been in with transforming like the industrial space, for example, over the past five years to a decade of, you're and just like with the you've seen in clean tech and who knows what will happen in the FinTech space, if it will come back. Or, even the SAS space, which I mentioned before it bubbled along. And then there was a time period in which, like I said, in [00:25:00] 2008, 2010 and beyond, if you were investing early, then you really did quite well. If you're investing early in SAS in 2000, maybe you were in Salesforce, beyond that, you might've been too early. We don't think change will happen overnight. We think, Watch, like every space that goes through a transformation, there's a period where it becomes, Oh jesus, is this ever going to work? And everyone loses faith.  but we think right now there's the opportunity to get in with real value and ROI based software, hopefully solutions that people get immediate value through and then you can grow up and see if they actually transform the markets. But in the past, words have been used like digital transformation. Digital transformation has been, I would say like clean tech because five years ago, it's very hard monolithic, huge changes to companies that people invest a lot of dollars behind their like ERP projects. That [00:26:00] fail, that have been really hard to make successful. We're much more interested in something that shows like, even if it seems like a point solution, it unbundled some of the ERP solutions and people are actually using it and paying for it and they've got some semblance of product market fit. They've got some way to get budget on an individual basis and hopefully it can grow up to disrupt some larger opportunity within that industry.

[00:26:27] Trond Arne Undheim, host: [00:26:27] Interesting on this environmental or sustainability or ESG angle is there an angle there in your fund or have you explicitly stayed away from that? Because I have noticed that for many industrials, especially on the corporate side now the discussion on sort of social impact and environmental impact is heating up and there's arguably a chance that some investments will be. Yet again, I guess, channel towards that space. Is that something you're looking at actively or are you going to stick to your more generic thesis on kind of foundational [00:27:00] digitization?

[00:27:01] Dayna Grayson: [00:27:01] I think we, we will, we do not have a working, thesis or point of view around sustainable technology. Now do we have any working thesis around any specific technology. We have VCs around markets soif we were to develop something or invest in something around sustainability, and we have, like you said, the charged lab, that's technically a sustainability type of a solution, but we invest in it around the mobility thesis. We know that there will be a compounding number of EBV EVs electric vehicles on the road over the next 10 years and they all need to be charged in more flexible ways. So that's interesting to us versus the need to bring electric vehicles to the road, which I think many other people are, and have already solved that problem.

[00:27:52]Trond Arne Undheim, host: [00:27:52] There's another aspect that you and I talked about a little bit in the prep, which is this new financial instrument called specs for industrial companies, [00:28:00] especially would you just for the favor of some of our listeners that may not entirely understand what a spec is, would you first just explain exactly what the vehicle does and why it showed up now on the market and why it has been i mean by some viewed as a little bit of a cheating way to get to market fast. But by others, I guess proponents would say this solves a real issue for hard technologies that would have otherwise perhaps never gone public, or at least not this decade. What do you think about it and we'll end it? What exactly is it? Cause I think it's not clear was what exactly it is.

[00:28:35] Dayna Grayson: [00:28:35] It's basically a fund even think about it, for private investors that might be listening or. Entrepreneurs that might be listening. You think of it as a dedicated fund that is set up specifically to go find one investment.

[00:28:49] And it just happens to be set up in the public markets and you, and that fund is re raises money on the NASDAQ or as a public entity, [00:29:00] but it doesn't hold anything to start. So then they have 18 months to two years to go find a company to invest in and therefore acquire. And then that fund becomes that holding that company.

[00:29:13] So it's no longer a holding company, a blank check company is that's, they're called, but it becomes the company that they acquired. And oftentimes, as you noted they look for acquisitions of companies before they planned to go public on their own or before they want to go public on their own. Because I guess, some may look at it as a way to get public sooner. I think how it's been used over the past year, is to accelerate the IPO or the public listing of certain companies but also I think it's been used wisely in my opinion, my humble opinion for some companies that are quite capital-intensive right, that need access to more capital and it allows public market [00:30:00] investors to contribute to those, to that capital investment versus private market investors. So alternative, alternatively, some of these companies could stay private and they raise from, other private funds. We've seen this happen a lot companies don't go public for 10, 15 years, and then they're valued day one at a hundred million plus sort of valuation, a hundred billion.

[00:30:24]It can be very lucrative if the longer you stay private, but it's still for the entrepreneur and the team. They still raise the amount, same amount of capital. They're still being delivered along the way. They're still having to prove value in that uptick. You're always raising capital as an entrepreneur. So it's really just a matter of when do you want to open that up to public market investors? And when do you want to stay product?

[00:30:47] Trond Arne Undheim, host: [00:30:47] Interesting. Look, I wanted to ask you some questions that pertain or to the learning journey that people might be interested in this study. So you have access to a bus insight [00:31:00] that I'm sure it was hard. One on your part, and we have talked about kind of how you got there, but if you were to advise either someone coming after you or someone, who's looking at, some of the successes you've had, where are the best. Ways to get in on this business of understanding foundational industries, whether you are the founders who, have some of these trying to just keep up and build the right product, or you could make maybe interested, like you said, on the investment side, perhaps from a more non-traditional background, but wanting to get into the excitement around the digital Manufacturing plays, where do you go to stay up to date? How do you stay sharp?

[00:31:42]Dayna Grayson: [00:31:42] I think it being just a constant sieve of information.  You really do have to be a Sam because you have to be able to process a lot and not saying I do a well, but I try to talk to a lot of people in the industry directly on a regular basis. Whether that's at operating companies that would be buyers of [00:32:00] software, of some of my companies or whether it would just be experts in the industry or whether it be other colleagues at other venture funds or at banks, et cetera, just to kind of constantly get a pulse of what people are seeing at different parts in different parts of the market. The buyers, the bankers but I think. My best advice to people who want to get into venture or think they want to get into venture investing is I think it's a balance. The best investors I know anyway, are have a balance of intuition, like understanding this entrepreneur really has that sort of something to prove portion of i want to go out and change the world and they're going to inspire people to follow them both on the, like I said, the employee and the investor level, but also the analytical rigor to, really understand the markets. Even if they don't understand them today, putting the analysis behind supporting that entrepreneur and that team really, grow [00:33:00] hand-in-hand with them over time with that analytical rigor of behind their decisions.

[00:33:05] So you have to be intuitive. You have to understand, I think when to act and when not to act. But it's really great to have that analysis behind you to shore up those decisions as that data becomes available. I'll know the data is not always available some of the earliest stages you're really skewing more or is this entrepreneur great. And is there data to really back up what they're doing? It's a belief that they understand the market. They understand how to navigate it and you want to help him or her do that.

[00:33:36]Trond Arne Undheim, host: [00:33:36] I love what you said about knowing when not to act or decide thing to get in on something, because it seems to me, and we're, I also do a little bit of this type of activity and there's, it's a waiting game, right?

[00:33:50] I mean, you really waiting, you cannot, even with a big fund you couldn't possibly you spend it the first week and you probably did not invest in the best deals. So [00:34:00] how do you have the patience to do that? To to know kind of when to cut the cut the check.

[00:34:09]Dayna Grayson: [00:34:09] That is a very timely question because we are in a very frothy time of the market right now in the private markets and then in venture capital and I guess in public markets and specs and everything in between we're in a very frothy time period and so I think the best governor that Rachel and I construct try to put on ourselves as knowing that this market will change. It'll either change perhaps for the better, and this will continue for many years or it will change and turn South World. Sometime over the next few years and so as a fund, as investment fund, you want to have a piece of both of those markets, right? Even if they continue, you want to have, what's called I guess, time diversity of money. And that is a key part of the strategy. You also want to have money saved the way to support your companies over time. The ones that do great, you want to [00:35:00] certainly hopefully invest more in.  and then the ones that might take more time. Before they become great you may also want import more money in those to help them continue their journey so you have to save capital support. The companies  are invested into .

[00:35:16] Trond Arne Undheim, host: [00:35:16] Speaking about protection for the future, what is the industry with a big, I guess, foundational industry look like 15 years from now?

[00:35:25]Dayna Grayson: [00:35:25] I hope it looks like the enterprise SAS market probably, you know,  I would definitely have taken an ETF of SAS companies in 2004 to 2010 and beyond frankly. So I hope it looks like that market where things have become more it enabled in the industrial company World and I think the rest will flow from there. Great products will emerge a whole slew of other opportunities on the consumer side might emerge, but you first have to enable,  the sector. [00:36:00]

[00:36:02]Trond Arne Undheim, host: [00:36:02] Look, it's a super interesting to hear your view. You have a unique vantage point on on, on a pulse. I'm sure that people will be tracking the companies you invest in pretty closely. Final word. What what is your, I mean, one of the things that I guess stuck with me is you said it, that you consult a lot in order to make these smart decisions you told me earlier, you had even like a, almost like a formalized sort of industry panel in your final word. Is it more important to. To listen, or is it more important to do your own thinking or is it just a hybrid of those two that makes for the secret sauce that you have developed?

[00:36:43] Dayna Grayson: [00:36:43] I think it's a hybrid of the two. I, we continually talk about you want to do diligence, you want to do primary diligence as it's called research on the areas you're interested in to form your thesis, to like, it's your job to form the analysis and and it's your job to, [00:37:00] as the investor or the entrepreneur to form your differentiated point of view on the space. So talking to industry experts is great. As long as you're not outsourcing your decision-making to somebody else. I tell entrepreneurs the same thing, when they ask us, like, get lots of advice, but the difference, between the direction you may pack and someone else's direction that they may pick is. What advice you choose to follow? But I'm a big fan of listening and then putting it all into our point of view.

[00:37:33]Trond Arne Undheim, host: [00:37:33] Thanks so much. It's been very enriching for me and I hope for the listeners too, to gain some mind share into what you're up to. Dana. Thank you so much.

[00:37:41] Dayna Grayson: [00:37:41] Thank you. It was great talking to you.

[00:37:44] Trond Arne Undheim, host: [00:37:44] You had just listened to episode 18 of the Augmented podcast with hosts thrown out of Undheim. The topic was transforming foundational industries and our guest was Dana Grayson general partner, and co-founder of construct capital. [00:38:00] In this conversation we talked about Dana Grayson's role as a trailblazing female VC, and what she sees coming for industry. Her take on picking and helping founders and her take on the future ahead of us. My takeaway is that Dana Grayson is right about factories. The factory floor is a too limiting framework to use, to understand emerging manufacturing firms, production facilities might also become micro factories. Industry products become tech platforms. So what does industry look like 15 years from now? We won't even recognize it. The foundation is changing foundational industries. Yes. They're created in a new type of foundries. Thanks for listening if you'd like to show subscribe at Augmented or in your preferred podcast player and rate us with five stars.

[00:38:51] If you liked this episode, you might also like episode 14 gets Manufacturing, superpowers episodes, 10, a brief history [00:39:00] of Manufacturing software, or episode 11, empowering workers to innovate Augmented. The industry 4.0 podcast.


Dayna Grayson

General Partner & Co-founder, Construct Capital

Dayna was one of the first venture capitalists to build a portfolio around the transformation of industrial sectors of our economy. She co-founded Construct to expand this focus and pursue the next generation of massive companies to be built in the tech sector, establishing the partnership with Rachel around complementary investing skills and an early-stage only focus. Prior to launching Construct, she was a partner at NEA where she backed companies creating new advances in manufacturing, automation, and vertically integrated consumer brands. She led investments in companies including [Desktop Metal](, [Onshape](, [Framebridge](, [Tulip](, [Formlabs](, and [Guideline]( In 2020, Desktop Metal (NYSE: DM) went public where she remains on the board as chair of the compensation committee. Onshape was acquired for $525m by PTC in 2019 and Framebridge was acquired by Graham Holdings in 2020.

Prior to joining NEA, Dayna was an investor at North Bridge Venture Partners in Boston. She started her career in product development and led design efforts at Blackbaud (NASDAQ: BLKB), the leading global provider of software to nonprofit organizations, as the company grew to over $130 million in revenue and completed a successful public offering.

She is a graduate of University of Virginia with a B.Sc. in Systems Engineering, and while there she built a startup using computer vision and eye-tracking for the physically handicapped. She received an MBA from Harvard Business School, where, today, she serves as a venture partner and an advisor to the MS/MBA program. Dayna is a founding member of All Raise, with the mission of improving diversity in venture capital.