Emily Fontaine, global head of venture capital at IBM, shared the five key pillars that guide her investment decisions in startups. As leader of IBM Ventures, she oversees a $500 million Enterprise AI fund and is responsible for identifying and partnering with innovative companies in areas like artificial intelligence, quantum computing, and cybersecurity. Fontaine emphasized that IBM’s mission is clear: accelerate enterprise innovation by investing in emerging technologies that deliver tangible business value. To achieve this, she evaluates every potential investment through five core criteria. First is strategic fit. Fontaine looks for startups whose vision aligns with IBM’s long-term strategy. While IBM was once primarily known for hardware, the company has shifted focus toward AI and hybrid cloud solutions. Investments must support these strategic directions and address major industry trends. Second is technology and product quality. Fontaine asks whether the startup offers breakthrough solutions. She seeks exceptional innovation—whether in quantum computing, AI performance, or system architecture—and wants to see that the technology is not just novel but also technically sound and scalable. Third is market and competition. Fontaine assesses whether the startup operates in a large and growing market with strong tailwinds. She looks for companies that can carve out a unique position, asking: Is there clear white space for leadership? A startup should be addressing a real need with a defensible advantage. Fourth is team quality. Fontaine values founders with deep domain expertise and a proven ability to execute. Since IBM typically co-invests with top-tier venture capital firms rather than leading deals, she also pays close attention to the cap table—the list of investors and their equity stakes. She wants to ensure the investor base is strong and credible. Finally, financial discipline is essential. While ambition is important, Fontaine stresses the need for realistic milestones and sustainable business models. She looks for startups with clear, achievable goals and scalable operations that can grow efficiently. Fontaine is deeply involved in the venture process, engaging with startups and VCs daily. She aims to connect with around 800 startups globally this year. To foster collaboration, she blocks out time twice a week for her team to work together in person, reflecting her belief in the power of teamwork both within IBM and among its portfolio companies.