Investing in the Future of MIT-Led Venture

Chris Sklarin (MIT ’88) has seen the benefits of VC as a software engineer, a deal closer, a startup consultant, and an equity investor. Now, as Managing Partner of Castor Ventures, he’s reinvesting in his MIT roots.

Chris Sklarin’s move to Managing Partner of Castor Ventures is a homecoming — of sorts. Long before he closed telecom deals across the world and advised startups on capital formation, the New England native attended MIT as an undergrad (‘88), and the language and skills Sklarin developed as an engineering student would inform the path that led him to Castor. He’s worked as a software engineer and an investment team member, and now Sklarin — who earned his MBA from UC Berkeley in 2002 — has refined his focus even more: Investing alongside the world’s top VCs in MIT-led startups like Kinsa, Consumer Physics, Agile Stacks, and others that could change the world as we know it.

Sklarin, who leads Castor alongside Principal Cainon Coates (Sloan MBA ‘15), sat down with us to discuss his path from MIT undergrad to Managing Partner of Castor Ventures.

What’s your connection to MIT?

I attended MIT as an undergrad, graduating 6–1 (Electrical Engineering) in the class of ’88. I lived just up Mass. Ave. in Cambridge at Zeta Psi, across from the old Necco Plant and above the bike shop/pizza place. Necco is long gone now and a biotech company is situated across the street.

I had great times and learned a ton at MIT. I played horn in the MIT Brass Ensemble, the Wellesley Symphony, the IAP Symphony, and in a few musical theater productions. And I wrote my thesis in Probability Programming under Professor Al Drake of 6.041 fame.

What sort of work did you do after graduating from MIT?

My first career was in software engineering. I did this until 2002, working for Stratus Computer, Boston Technology (now Comverse), Object Design (eventually acquired by Progress Software), and Priority Call Management. While at Priority Call I transitioned to Sales Engineering and traveled the world closing deals. Eventually, I moved to California to pursue an MBA at Berkeley while remaining with the company.

Tell us about your investment background. What roles did you hold prior to becoming MP of Castor Ventures?

After business school, I became a founding member of the investment team at JumpStart, a seed investor in Cleveland headed by Ray Leach (Sloan ‘02). Three years later, I moved to Chrysalis Ventures, opening offices in Cleveland, Pittsburgh, and Ann Arbor. While there, I was board observer for HealthMedia, which sold in 2008 to J&J for $185M at a tough time in the macro markets.

I eventually moved to BioEnterprise, a Cleveland-based health care accelerator, where I advised clients on capital formation. Several went on to great exits, including Explorys, which was purchased by IBM, and CoverMyMeds, which McKesson bought for $1.1B.

Later, I worked for seven years with Edison Partners, a growth equity firm out of Princeton, NJ, and the Castor Ventures opportunity came along in 2017. I was already a community member and supporter, and I’d been in touch with Alain Hanover, our Founding Managing Partner. I was very excited to join the team full-time last year.

What sparked your interest in working for Castor Ventures?

I’ve seen the range of investing, from seed to early venture to early growth capital. After graduating from MIT, I worked for two software companies that had IPOs, and one of them was purchased three times while I worked there. The team I was with at Priority Call had a good exit to Sema, which was eventually purchased by Schlumberger. These businesses were backed by VC and I enjoyed creating products that benefited from it. After business school, it made sense to join the investing side of the business, and that path eventually led me to Castor.

The opportunity to lead a fund that’s investing in MIT-led startups is really amazing. MIT grads are among the most talented and hard working entrepreneurs in the world, and they’ve created excellent opportunities for private company gains. Working at Castor also allowed me to reinvest in my Boston roots.

Which trends are you most excited about?

Mobility, healthcare IT, FInTech, and enterprise software are ripe for disruption — I’m closely watching those categories. Old industries that took to tech slowly are seeing their models turned upside down and it’s amazing to watch. I’m not sure what cryptocurrency and Blockchain will mean to old line companies, but I’m excited to watch and learn. “The Silver Wave” (companies addressing the aging population) also has my attention.

What are the three most important lessons you’ve learned on your VC journey?

  • Learn to discern between a great company and a great investment — they’re not always the same thing. Bad deals can flow from good companies, and sometimes you have to walk away when a business model doesn’t support the returns that investors need to see. For instance, I once had to walk away from a company that was ostensibly a services brand that used software, not a software company that provides a service. Software facilitates higher profit and growth margins, but the company’s customers were paying for a service. It would’ve been very difficult to change the company’s business model to pave the way for the growth typically afforded a successful software company.
  • The most valuable capital a company can have is growth via sales and customers, so make sure you’re solving a problem that customers are willing to pay for. Here’s a good test: Figure out a problem that is $100,000 worth of pain and see if you can charge $50K (or more) to get the client out of that situation.
  • Don’t run out of cash.

Which resources or sources of inspiration (podcasts, books, blogs, mentors, etc.) are most useful to you on a regular basis?

I’m a fan of the blog AVC by Fred Wilson (MIT SB ’83, Wharton ‘87). I also really enjoy Brad Feld’s work (MIT SB ’87, SM ‘88).

What else would you like to share about yourself?

I enjoy a really good bike ride and bicycle tours. Cycling is the best way to see a place — the speed is so much better than driving through town in a rental car.

Castor Ventures is a network of MIT alumni investing in MIT-connected businesses. Click here if you’d like to learn more about venture investing with Castor.

Smart, Simple Venture Investing