Stanford-Born VC Fund’s Goal: Transform 1 Billion Lives In 10 Years

Reaction

Dan Matthies and Enrico Carbone couldn’t have predicted that after just six weeks at the Stanford Executive Program at the Graduate School of Business, their cohorts — hundreds of them — would join them in creating one of the most influential and global venture capital firms in the world.

Reaction is the result. The global venture capital fund founded by more than 150 SEP and school alumni across 45 countries. Its mission is to amplify innovations and expand their value, thus improving lives. Reaction exists to find innovations anywhere and scale them everywhere.

The venture capital firm’s founding partners are all SEP alumni — entrepreneurs, investors and company leaders — making it a first-of-its-kind fund. “What we are trying to do at Reaction is to discover innovations that will help solve global problems and enable those companies to enter markets throughout the world that they can benefit from the most,” explains Matthies, who serves as one of Reaction’s managing partners. “We believe in getting the right innovation to the right person at the right time.”

“We take entrepreneurs who are great scientists or technologists and connect them with the industry leaders who can open the right doors for them at the right time to amplify the change their innovations can create,” says Carbone, also a managing partner.

MISSION: IMPROVE A BILLION LIVES BY DEMOCRATIZING WORLD-CHANGING INNOVATIONS

Dan Matthies

At Stanford, Matthies says, he got to know many of the 225 leaders in his cohort and discovered they had similar values and goals.

“Our ambitions were to build something quintessential, to surround ourselves with great people that we wanted to work with and learn from, and to dedicate our efforts and resources to achieve a higher purpose,” he says. “We realized that if we combined our access, knowledge, and influence, together we could scale innovations that would promote greater well-being and health.”

Reaction quantified this in its mission to improve a billion lives, within a decade, by democratizing innovations that change the world.

Matthies shared a moment on campus that inspired the class to redefine what success meant.

“We did an exercise where you imagine you’re at a party thrown for your retirement,” he recalls. “Speeches are given not by you, but about you and about what type of persona and leader you were. You were asked to imagine if you were there listening to the speeches, what would define a life well lived? Would it be promotions or pay increases received, or market share achieved? Or would it be about the difference you made in the world, the lives you changed and the pride you shared with those close to you for what you had accomplished together? There was a moment where everyone was looking around the room, you started to see tears and feel your own eyes swelling, and you realized it would be a heavenly moment if what were said about you was about the positive effect you had on others.

“After doing this exercise, you start to think about success differently. Our class became devoted to creating a legacy where others would remember us as leaders who worked to make the world a better place, as a global community dedicated to changing lives for the better.”

‘WE CAN BUILD AN ECOSYSTEM WHERE EVERYTHING IS BETTER OFF’

Enrico Carbone

Stanford was the perfect environment for this type of venture to materialize because it lies in the heart of Silicon Valley, the world’s best playground for innovation. “Silicon Valley has historically been the center of creativity, risk taking and collaborative innovation,” Matthies says. “Reaction was created to house a community where all SEP alumni could continue to stay connected and build relationships with other SEP by Solving Enormous Problems — also SEP!”

At Stanford sporting events, students wear shirts that read “Fear the Tree” which is a warning to visiting teams to fear the school as a fierce competitor. At Reaction, alumni aim to “Build the Forest,” by uniting as a greater force.

“If we work together, we can build an ecosystem where everything is better off because it works collectively,” Matthies says. “A model that’s better for entrepreneurs, investors, and company leaders.”

The cohort structured a thesis, set of values, and an initial team, from which Reaction was launched in the first quarter of 2020. The inaugural fund itself is called W250 after the room at Stanford where the idea was born. The triangle in the logo represents the change Reaction strives to create and is displayed in Cardinal red, a color proudly worn by Stanford alumni.

At the heart of the firm is Matthies and Carbone, the two general partners who are dedicated leaders who ensure there is accountability to execute decisively. Matthies was born and raised in Princeton, New Jersey, surrounded by academia from an early age. He earned an executive MBA from Wharton before attending and graduating Stanford’s Executive Program in 2019. He has lived on both coasts and in Australia and Europe, and has developed a love for international business — and by extension global business ventures. Matthies worked at Bloomberg for 21 years where he built, launched, and lead a number of global businesses.

Carbone grew up in Sao Paulo, Brazil, where he worked in Investment Banking for over 20 years at firms including Merrill Lynch, Credit Suisse and BR Partners prior to attending SEP. Following Stanford, he relocated to nearby Palo Alto to actively focus on investing in health, environment, retail and technology companies in both North and South America.

A DIVERSE & EXCITING PORTFOLIO

Reaction invests in companies tackling some of the biggest global problems: health, environment, and social inequality challenges, all areas of passion for Reaction’s founding partners. Matthies believes each of these challenges also represents one of the world’s biggest opportunities. Standouts in Reaction’s portfolio include Mango Materials, which sequesters methane gas to create biodegradable plastics, and Genetesis, which interprets bio-magnetic signals to predict and prevent heart disease.

Jumbotail is India’s leading new retail platform for food and grocery that seeks to fundamentally re-engineer the food and grocery value chain in India using technology, data science, and design. Its founders’ ambition is to create fair access to markets and increased economic opportunities for India’s ecosystem of millions of mom-and-pop “Kirana” grocery retailers, brands, and staples producers and farmers. Jiffy.ai was founded to radically change how enterprises automate complex business processes, and puts the power of real-time innovation in business users’ hands. It uses HyperApps — pre-packaged and true end-to-end automation applications that are reusable and extensible across an entire enterprise — on its cognitive automation platform with capabilities ranging from intelligent document processing and NLP capabilities to RPA and Low Code/No Code development.

“Entrepreneurs are choosing Reaction because of the influence, global reach, and industry access the Stanford community has to offer,” Matthies says. “We offer network on-demand. That is our competitive edge. We partner with those looking to drive not just positive returns but also positive change.”

SEP alumni launched Reaction for all Stanford alumni, he says.

“We thought we could create something for ourselves, for other alumni and for the benefit of those that come after us,” Matthies says. “We would love for someone to look back and say, ‘The Reaction community created a legacy as strong as any other prominent leader by working together. They are a world-class team that has driven world-class action.’ Reaction’s identity is characterized by the symbol for change, and we are committed to improving the world in a way that hasn’t been done before.”

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