Vartega is solving the world’s toughest advanced materials recycling challenges, reclaiming post-industrial carbon fiber that would otherwise go to waste and turning it into a valuable product for a host of manufacturing purposes.
HG Ventures was an early investor and Ginger Rothrock recently visited Vartega’s expanded facility in Golden, CO.
Read more about Vartega’s origin story in CEO Andrew Maxey’s guest post, here.
For hard tech startups, having a strong IP strategy can make the difference between success and failure, especially if racing to develop solutions in a competitive space. The Heritage Group’s VP, Strategy and M&A, Jeremy Forest, has decades of experience in this area and recently sat down with HG Ventures’ Jon Schalliol to share some of his wisdom.
Jon Schalliol: Jeremy, intellectual property is a very specialized field; how did you get into it?
Jeremy Forest: My journey into IP started with a somewhat unique background in science and law.
I studied biochemistry as an undergrad and went on to graduate school to focus on medicinal chemistry and organic synthesis. But as I got deeper into my research, I realized that the bench wasn’t where I wanted to spend my career. I became more interested in the business side of biotech, which led me to law school, where I focused on intellectual property and patent law.
After law school, I spent about five years in a big IP law firm, primarily working in patent prosecution and litigation in the biotech and pharma sectors. It was a demanding job, but it gave me a solid education in IP.
Eventually, I transitioned out of law firm life and into the startup world. In 2011, I joined a clean tech startup called Biosynthetic Technologies, where I was responsible for building out their IP strategy and expanding their patent portfolio. That experience set the stage for my current role at The Heritage Group, where I manage IP strategy across various projects, including M&A and supporting HG Ventures.
Jon: I remember looking at Biosynthetic Technologies in 2016, and being absolutely floored by the attention to detail around the IP.
I pulled up an email from that time that stated they had more than 40 patents issued and 83 patents pending, with protection running into the mid-2030s. That level of patent protection—covering molecule structures, products, processes, and applications—was striking. It was a key element in why we felt it made sense to move forward with the company. Without that IP strategy, I am not sure we would have considered the investment. It was one of those moments where you realize how crucial a strong IP foundation is in determining the future success of a company.
Jeremy: Yes, having such a comprehensive IP strategy in place was critical. The strength of the patent portfolio, covering everything from molecule structures to processes, really set Biosynthetic Technologies apart. It’s the kind of solid foundation that not only protects the company’s innovations but also gives investors confidence in the long-term value and defensibility of the business.
Jon: Jumping from a big law firm into a startup must have been a pretty big shift. Based on all that experience, can you share your thoughts on why a well-thought-out IP strategy is so crucial for startups?
Jeremy: An IP strategy is absolutely critical for startups, particularly for those in fields like biotech, clean tech, or any industry where innovation is key. The reality is, your IP is often the most valuable asset your company has—especially in the early stages before you’ve built out other tangible assets.
For example, when I joined Biosynthetic Technologies, the company had some novel technology, but the core patents were set to expire in a few years. We knew that if we were going to create value, we needed to expand our IP portfolio quickly. This meant filing new patents to cover not just the original technology but also enhancements, scaled production processes, and end-use formulations. Our strategy was to “evergreen” the original patents, effectively extending their protection and ensuring that we could keep competitors at bay. This robust IP portfolio was a key reason why the company eventually attracted investment from HG Ventures.
Jon: That makes a lot of sense. For founders who are just starting to think about their IP strategy, what are some key considerations they should keep in mind?
Jeremy: Founders need to understand what makes their technology unique and how it differentiates them from what’s already out there.
This means doing your homework—conducting thorough market research and understanding the competitive landscape.
Another crucial step is ensuring that your IP is defensible. This involves more than just filing patents; it’s about ensuring those patents are well-drafted and cover the most critical aspects of your technology.
Also, consider the potential for ‘freedom to operate’ issues—meaning you need to make sure your product or technology doesn’t infringe on existing patents. This can be tricky, especially for early-stage startups with limited resources, but it’s vital.
Founders should also be aware that IP strategy isn’t a one-time task. It’s something that needs to be revisited and adjusted as your company grows. As you develop new products or enter new markets, your IP strategy should evolve accordingly.
Jon: That’s great advice. As you know, IP is very important to us in companies we invest in and we really value being able to bring you into the process of assessing potential investments when we need to draw on your specialist expertise, alongside that of others within The Heritage Group. Given your work with us and with startups you’ve advised, can you share a bit about the role it plays when evaluating potential investments?
Jeremy: One of the first things I look at is the overall IP strategy. A well-thought-out IP strategy can be a strong indicator that the founders understand the importance of protecting their innovations.
During due diligence, I work with the HG Ventures team to assess the scope and quality of the company’s patents, the likelihood of those patents being granted, and the strength of any existing IP. We also look for any red flags, such as potential infringements or gaps in the IP portfolio. If a company has a solid IP strategy and a well-defended portfolio, it gives us confidence that they have a defensible market position, which is critical for long-term success.
Jon: In your view, what’s the biggest mistake startups make when it comes to IP?
Jeremy: I think the biggest mistake is underestimating the importance of IP from the start.
Too often, startups focus on developing their product or technology and leave IP considerations as an afterthought. This can be a costly mistake. If you don’t have a solid IP strategy in place early on, you might find yourself in a position where your technology isn’t as protected as you thought, or worse, that you’re infringing on someone else’s patents.
Another common mistake many founders make is not fully understanding the scope of their IP. It’s not enough simply to have a patent; you need to ensure that your patent covers all the critical aspects of your technology and that it’s enforceable. A weak patent that doesn’t provide real protection is almost as bad as no patent at all.
Jon: That’s good advice. I wonder, as someone who has seen both sides of the IP equation—working in a law firm and now in the corporate world—what do you enjoy most about your work?
Jeremy: I love the opportunity to work on a variety of technologies and help shape the strategic direction of the companies I work with.
Every day is different, and I enjoy the challenge of figuring out how to protect and leverage technology to create value.
I also enjoy the creative aspect of IP law—finding ways to use the legal tools at our disposal to build a defensible market position for our companies. It’s incredibly rewarding to see the impact of a well-crafted IP strategy on a company’s success.
Jon: You must often be among the first to have access to new technologies, too. Is there anything you are seeing now that you are particularly excited about?
Jeremy: I’ll be the first to admit I don’t fully understand all of the latest technological innovations in the hard tech space, but what I’ve been seeing coming through is the incredible potential of AI and machine learning, especially when applied to construction, road building, and project management.
There’s a tremendous opportunity here, not just to enhance the efficiency and quality of our work but to do so in a way that aligns with our focus on sustainability and the circular economy. Even though I’m not an expert in AI, I can see how leveraging these technologies could be a game-changer for the industry, helping us optimize resources, reduce waste, and ultimately contribute to a more sustainable future.
Jeremy Forest is VP, Strategy and M&A, with HG Ventures’ parent company, The Heritage Group, and supports the HG Ventures team in assessing and conducting due diligence on potential investments. A remote employee, Jeremy lives in Washington State, where he enjoys the great outdoors and competes in Ironman triathlons.
This Q&A provides a deep dive into the importance of intellectual property strategy for startups. Whether you’re just starting out or looking to refine your existing IP strategy, these tips can help you protect your innovations and position your company for success.
Alex Rappaport is the founder and CEO of ZwitterCo, a startup that develops membrane solutions for the treatment of highly impaired water. In the wake of the company’s recent Series B raise, Alex sat down with HG Ventures’ Ginger Rothrock to discuss the importance of the relationship between founder and investor. They covered ZwitterCo’s origin story; what it takes to be a successful founder; what Ginger looks for in an entrepreneur; navigating critical milestones; and the importance of team. This conversation has been edited for length and clarity.
Ginger Rothrock: Alex, remind me how you ended up founding ZwitterCo. Didn’t it have something to do with river rafting?
Alex Rappaport: Yes, if we fast-forward to when I will write the first chapter of my memoir, the story starts with me as a river raft guide. Before college I used to teach whitewater stand up paddle boarding, kayaking and rafting on the Potomac river just west of DC, and it was there that I gained a deep appreciation for mother nature and water.
I spent every summer on the river and it was it was a transformative experience for me. It helped me to figure out what I loved and what I cared about.
That was really when I started to think about what I wanted to do with my life. I learned that I was really good at communicating and building communities of people who care deeply about sustainability environmental issues, so when I went to college I wanted to take that into a career and studied environmental engineering. At college I found a dual passion, for the science behind solutions to critical environmental problems and for entrepreneurship.
I found it exhilarating that I could combine these disciplines to get to solutions faster. I wanted to work on important problems quickly and thought that a career in engineering required more time and patience than I was willing to put in, while entrepreneurship was about understanding the need for something new in the world and then by force of will applying yourself to it until you either break the challenge or break yourself, or some combination of both.
I found my calling in trying to combine these themes of sustainable technology and entrepreneurship to solve really hard problems in the world, so when I had a chance to start a company and work on cool technology, water treatment ended up being the focal point.
Ginger: When I was an undergrad I thought I wanted to save the planet too, but at that time environmental startups were not that interesting to folks. I went out to San Francisco and wanted to start a company in the environmental sector but at that time it was all about software. By the time you founded ZwitterCo, though, there was a lot of interest in water and cleanup and environmental issues generally.
Alex: Yes, but the first set of answers I got from all the investors, advisors, mentors and other entrepreneurs that I met with was categorically: “Don’t sell the ESG story, the ESG story is fluff, it’s greenwashing, it’s never going to drive impact or value and no one’s going to make decisions based off of it.”
I had that drilled into me early on, to the point where my earliest pitch decks didn’t even mention saving water as a feature in the value proposition.
The pendulum has swung significantly in the other direction in the last five or six years, though. While it is true that it always comes down to dollars and cents, it’s also now the case that people want to be doing what’s right from a resource conservation standpoint; they want themselves and their industry to be on the right side of history. Or maybe they just see an impending regulatory doom and want to get out in front of that from a risk mitigation perspective, but today you can walk in the door with a sustainability pitch and everyone’s excited to sign the deal.
We still have to do all the hard work to show it is financially attractive too, but I’ve yet to find a customer who needs convincing that they should care about water.
Ginger: I remember that about the first time we met, when you were early in your journey; you were one of the few entrepreneurs to say: “This isn’t just about the environment, there’s an economically rational argument for wanting to reuse water”, and I thought, finally somebody gets it.
Alex: One of the things I’ve always appreciated, Ginger, is that you are yourself a multi-time founder in hardware and material science, so you have a deep connection to the challenges of trying to build a venture like this. I imagine that finding conviction in a startup that is trying to pitch a breakthrough technology and trying to save the planet and create tremendous shareholder value is a hard exercise. Is 51% conviction good enough?
Ginger: I’m not going to try to quantity conviction because that’s impossible. For me, it’s a combination of data and gut feeling. Somehow, deep down, I know if a team of people and their solution are going to solve a massive problem.
Venture is a people-heavy business; everyone talks about the importance of the team, but ultimately you measure success by numbers on a spreadsheet. So, to get to conviction you have to think about the right people intersecting with a market that’s big enough and a technology that’s unique and compelling enough to get that spreadsheet return.
To me, the market and tech side is way easier because it’s data-driven. Between HG Ventures’ experience, my experience and the experience of those within our operating companies and R&D team, it’s relatively easy to assess the value and stage of a technology, but the people side is harder.
We talk a lot about self-awareness and storytelling; what is it that makes a particular entrepreneur uniquely qualified? For example, you have so many of those qualities we are typically looking for in a founder; you’re confident but it’s not just ego, you can back it up. You can tell a story and you can attract strong talent and customers. That’s important because I will admit that when we first met, I thought membranes were stupid! As someone has worked in the waste industry, I know membranes fail, so I was skeptical. But you were convincing.
Alex: Eventually! I recall that when we first met in 2019, we spent enough time exploring this for you to kindly shut the door in our face! It wasn’t until 2021 that we got back in touch.
Ginger: Yes, for young founders coming out of college like you were, we definitely want to track their progress over at least a couple of chapters of hardship, see how well they can do things like bring on talent and put money to work in solving early-stage milestones. And yes, at first I thought there was too much unsolved technical risk for the markets we care about.
But by 2021, three major things had changed: You had partnerships that validated the story, a model that made sense, and you had pulled in folks from the industry, who were willing to leave big careers to join you.
Now, here we are, and a lot has happened. You just closed a large Series B round in a market that has not seen a lot of capital deployment; what were the big milestones to get to that point?
Alex: Here’s my thesis for the most important milestones that have to be met at the different stages:
That’s really the Series B challenge that we have in front of us: We have a couple of dozen industrial points of evidence, we have multi-year datasets, we have customers who would really be impacted if ZwitterCo disappeared tomorrow; we have people who rely on us in an important industrial context.
Ginger: It always boils down to those four fundamental questions, doesn’t it? How big is the market? What are the trends and shifts in that market? How capable is the team? And how much evidence of traction do you have?
Every signal that we see says water is becoming something people are willing to put dollars behind preserving and protecting, and the intensity of pain that could be felt if people don’t manage water in a different fashion means now is a very strong time to be a water technology company.
Ginger: Alex, you’ve created a culture of empowerment at ZwitterCo. I am interested in how you continue to encourage that entrepreneurial spirit as the company matures.
Alex: I like to think I am a good community builder, but I don’t consider myself an exceptional like ‘doer’ or operator in any single function. I’m not the best person to drive sales or operations or international expansion, so I approach my relationships with my executive leadership team with an expectation that they have to be able to hold the keys to the bus, they have to be able to bring their genius into the mix andfunnel their effort towards the collective strategy that that we’ve aligned on, and then my job is to give them resources, give them direction and create a culture of expectation and accountability. I want to learn from my leadership team. You have to surround yourself with people who are so much better than you in their particular function so that you have no temptation to oversee and overrule.
Ginger: What does the future hold? What’s next for ZwitterCo?
Alex: Platform expansion is a large part of it. We have to be able to look out into what the next set of products needs to be and put our innovation center to work on that. By the end of this year we’re expecting to commercialize a new product that’s going to focus on some high value food grade separations and specialty protein markets.
We’re doing a lot in our manufacturing scale up too, because we’re starting to see the volumes of production go up. We’re looking at how much material we have to be able to produce as well increasing the quality and stringency standards in our production, because we’re going into more heavily regulated markets like drinking water and food grade.
We also just brought on our first commercial leadership in the Middle East and we now have a very large pipeline of projects in that region.
Ginger: Thinking about this journey reinforces why it’s so important for there to be good chemistry between a founder and investor; it’s a long-term relationship. I always say an investor has to ask themselves: “Could I sit on a board with this person for the next seven years?”.
Alex: I often tell founders that the moment that matters in an investment process is the point when you get to a texting basis with whoever your target lead is; you and I have been on that level for a long time and it’s awesome.
If a founder can get multiple term sheets and create a competitive process, that’s great, but I’ve never had that. There has always only been one term sheet that mattered and that was from someone I was on a Saturday 2am texting basis with, because we had real trust. That’s what gets you across the finish line.
Founded in 2018, ZwitterCo provides membrane solutions for the treatment of highly-impaired wastewater. The company’s membranes make it possible to treat historically unfilterable streams. ZwitterCo enables customers to manage and recover value from water, transforming waste from a cost to a benefit. The company has raised $98.8M in venture investing, including $58.4M in a July 2024 Series B round. HG Ventures was an early investor.
