- On Thursday, General Catalyst announced that journalist-turned-VC Katherine Boyle was promoted to partner.
- Boyle has led some of the firm's most controversial investments in startups working closely with the federal government, specifically with the Department of Defense.
- She told Business Insider that Silicon Valley and officials in Washington, DC, are much more comfortable working together than they were even 5 years ago, although she still helps guide founders who are apprehensive about building a business model around a single customer.
- Although Boyle previously had check-writing power, she is eager to step up the rate of investments in her new role as more technical founders warm up to working with parts of the government.
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Silicon Valley and Washington, DC are entering 2020 as frenemies. Katherine Boyle, General Catalyst's newest partner, thinks the two could end the year as work spouses.
The journalist-turned-VC was promoted to partner on Thursday, and has led some of the firm's more controversial investments over the last three years. She doesn't shy away from regulation, the r-word that has other Silicon Valley VCs apprehensive in boardrooms across California.
"Regulation is really just a proxy for market size," Boyle told Business Insider. "Yes, they have tech risks, but if they make it through the regulatory process they can succeed."
It's a difficult time to advocate for more collaboration between startups and government in left-leaning Silicon Valley. Over the last six months, big tech companies like Google and Microsoft have been subjected to employee-led protests over secretive government contracts. Startups like Palantir have reportedly pulled out of college recruiting fairs after pushback from socially conscious students over its contracts with immigration and defense officials.
But Boyle maintains that there's never been a better time to work with government agencies, as long as founders and CEOs are honest with employees about what they are building and who the core customer is, because that's what has gotten other tech companies in trouble.
"For any company that is working with the [Department of Defense], we think it's very important to be forthright that they are working with the DOD," Boyle said. "They have to have conversations about the ethics of working with the DOD. If the team is pivoting to working with the DOD and aren't upfront about it and the projects and the ethical lines they think exist, it can be problematic."
The fact that large companies are considering working with government officials, though, is progress, Boyle said. The more comfortable tech companies get working with federal and local governments, and vice versa, the more everyone benefits.
"If you had talked to Washington even five years ago, they would have laughed and the same would have been said about founders and Silicon Valley," Boyce told Business Insider. "Now, that's very much shifted. These deeply technical founders are excited about working with the DOD and intelligence community, and I'm excited to work with companies that have that as the core part of their strategy."
Perhaps trickier than managing employee's expectations, though, is building a successful startup based on a single, notoriously budget-conscious customer: the government. When she first started at General Catalyst 3 years ago, Boyle said the biggest hurdle she had to overcome was finding founders who were creative and scrappy enough to make that business model work.
"From the very beginning, and it's somewhat controversial when you talk to founders, but companies that are selling to the government or thinking about it have to fundraise very well," Boyle said. "And that is based on the strength of the founder and their ability to tell a compelling story. That wasn't believed about deep tech. The pervasive view was that the tech speaks for itself and that's not the case."
Anduril, one of Boyle's portfolio companies, is a good case in point. The startup builds virtual and augmented reality technology for military clients, and has faced its own set of public scrutiny for its work with US Customs and Border Control. But its founder, Palmer Luckey, has successfully brought in more than $185 million in venture funding that catapulted its valuation north of $1 billion in less than 2 years. Luckey also founded virtual reality startup Oculus, which was acquired by Facebook for $2 billion in 2014.
"It takes fundraising prowess you don't see from PhDs spinning out of a lab," Boyle said. "It comes down to, can a visionary founder that is deeply technical tell the story in order to survive the challenges of working in a highly regulated industry?"
Going into a highly politicized election year, Boyle's take may prove to be a contrarian one. But she's determined to help founders see it through.
"If you look at the history of tech, every major technology that stood the test of time has had a regulatory body watching it," Boyle said. "There's always a market on the other side."