David Gramnaes brings Budo to the Board

I leave the Euro­pean route E6 and dri­ve along the old coun­try road. It winds across fields and mead­ows and through groves and ham­lets. After a few kilo­me­ters, the light changes to some­thing you can only expe­ri­ence near the coast. A long line of parked cars tells me that one of the province of Halland’s many miles of sandy beach­es is near­by. I dri­ve on, and Kat­te­gatt – the sea between Swe­den and Den­mark – grows larg­er and more promi­nent in my view. Soon I pass the leg­endary ice-cream par­lor Tre Top­par, where the line stretch­es far into the street. I fol­low the main street until I find the house with the same num­ber as on my note in the seat next to me. I’ve arrived at David Gram­naes’ home.

David Gram­naes is a part­ner and CEO of Gramtec Ven­ture, an invest­ment com­pa­ny with­in the Gramtec group – Smoltek’s largest sin­gle share­hold­er. I have seen him sev­er­al times at Smoltek’s office in Gothen­burg, where he is always busy in meet­ings, but I don’t know much about him. All I know is that the man­age­ment val­ues his advice and efforts and that he is the son-in-law of Finn Gram­naes, about whom I wrote an arti­cle a few years ago.

Curi­ous as I am, I used his elec­tion to Smoltek’s board of direc­tors at the annu­al meet­ing on May 14, 2024, as an excuse to con­tact him and ask if I could inter­view him for Smoltek’s IR blog. He agreed, and that’s why I find myself parked in front of his vil­la in the sum­mer idyll and fish­ing vil­lage of Träs­lövs­läge – or Läjet, as the locals call it.

But I can’t sit here all day, so I get out of the car, go to the door, and ring the bell.

Aikido black belt

David Gram­naes opens the door and greets me. He asks if the trip went well. Can he offer me some­thing? Cof­fee? Tea? Yes, please, tea, I reply. While the water is boil­ing, I take the oppor­tu­ni­ty to look around. I see traces of some­one inter­est­ed in mar­tial arts and ask if it’s him.

“Yes, that’s me. I’m an Aiki­do nerd,” he replies with a laugh. “I’ve been prac­tic­ing budo for decades and spent much time in dojos.”

There’s no mis­tak­ing that David Gram­naes is pas­sion­ate about Aiki­do. He has been the head train­er for chil­dren and teenagers at Var­berg Aiki­do Club since 2012, has been a black belt since 2016, and holds the rank of 2nd dan. David Gram­naes also co-found­ed a large nation­al youth camp and par­tic­i­pates in devel­op­ing a young lead­ers pro­gram in Aiki­do. Since 2021, he has also been chair­man of the Var­berg Aiki­do Club.

Will this expe­ri­ence help you in your work on the Smoltek board?

“Absolute­ly! Over 20 years of Aiki­do train­ing has tru­ly shaped me. It has taught me that achiev­ing your goals and mas­ter­ing new skills requires focus and a lot of prac­tice. You should nev­er give up. More impor­tant­ly, the jour­ney (do in aiki-do) mat­ters, not the goal itself. I believe the same applies to entre­pre­neur­ship and build­ing new businesses.”

Fostered in two family businesses

What else has shaped you and con­tribute to how you will serve on the board? I ask as we walk into the liv­ing room, where we set­tle into a com­fort­able lounge suite.

”I have been fos­tered in two fam­i­ly busi­ness­es. First­ly, my family’s recy­cling com­pa­ny, Pet­terssons Miljö, which I grew up with and worked for ten years in var­i­ous oper­a­tional roles, includ­ing CEO. And my wife Lisa’s and father-in-law Finn’s com­pa­ny, Gramtec, where I have been involved for almost ten years now.”

What fam­i­ly busi­ness prac­tice do you bring to the boardroom?

”Entre­pre­neur­ship and long-term think­ing. Fam­i­ly busi­ness­es typ­i­cal­ly focus on long-term rela­tion­ships with cus­tomers, sup­pli­ers, and employ­ees. This mind­set has def­i­nite­ly shaped me. My com­mit­ments and invest­ments are often long-term, as is my com­mit­ment to Smoltek, and I will bring this approach to my work on the board.”

Worked his way up in life

David Gram­naes’ resume shows he has worked his way up in the fam­i­ly businesses.

He grad­u­at­ed from Blekinge Insti­tute of Tech­nol­o­gy with a Mas­ter of Sci­ence in Soft­ware Engi­neer­ing short­ly after the dot-com bub­ble burst. So, he start­ed work­ing in the fam­i­ly busi­ness as a trans­port coor­di­na­tor. In this role, he was respon­si­ble for plan­ning the garbage truck routes in Halm­stad munic­i­pal­i­ty. In par­al­lel, he ran his own con­sult­ing busi­ness, which includ­ed web­site development.

He soon became respon­si­ble for the finances and account­ing of the fam­i­ly busi­ness and, after a few years, took over the company’s day-to-day man­age­ment as COO. After six years, he took over as CEO of the fam­i­ly busi­ness. As CEO, David was respon­si­ble for a sig­nif­i­cant trans­for­ma­tion; the com­pa­ny launched new waste man­age­ment and recy­cling ser­vice offer­ings and dou­bled its annu­al revenues.

First contact with Smoltek

He brought his change man­age­ment expe­ri­ence to Gramtec, which he joined in 2013 as a busi­ness devel­op­er and invest­ment manager.

Is this when you came into con­tact with Smoltek?

“Yes. In 2015 Finn nego­ti­at­ed a buy­out of Smoltek togeth­er with Pro­fes­sor Peter Enoks­son. Finn asked if I could help with the nego­ti­a­tion. That was my first con­tact with Smoltek.”

Finn Gram­naes and Gramtec had been small minor­i­ty share­hold­ers in Smoltek since 2007, almost from the begin­ning. The main share­hold­ers were Chalmers Inno­va­tion Seed Fund and Almi Invest. How­ev­er, they had reached their max­i­mum invest­ment lim­it in Smoltek and want­ed to exit. So Gramtec, Finn, and Peter Enoks­son bought them out and became the largest share­hold­ers, respon­si­ble for pro­vid­ing the com­pa­ny with the need­ed capital.

“In the process, Smoltek Nan­otech Hold­ing AB was estab­lished, and I was giv­en oper­a­tional respon­si­bil­i­ty for it,” says David Gram­naes. “I held this posi­tion until Smoltek was list­ed on Akti­etor­get (now Spot­light Stock Mar­ket) in 2018, at which point the CEO of Smoltek AB also became the CEO of the hold­ing company.”

After com­plet­ing his assign­ment at Smoltek, David Gram­naes was appoint­ed CEO of Gramtec Ven­ture. A role he still holds today.

An empty seat on the board

Gramtec was rep­re­sent­ed on the Board until 2023 by Finn Gram­naes, Gramtec’s founder and largest share­hold­er. He declined to stand for re-elec­tion in 2023. Why was this?

“When Finn, at the age of 75 and after 15 years on the board, felt it was time to step down, we dis­cussed how we would work at Smoltek in the future.”

“At that time, Smoltek had been on a jour­ney of change for sev­er­al years and seemed to be on a steady course: We had a new man­age­ment team with indus­tri­al expe­ri­ence. We had a pro­fes­sion­al nom­i­na­tion com­mit­tee. I had worked for sev­er­al years with Lena Olv­ing and oth­ers to devel­op the board so that it con­sist­ed of peo­ple with the right skills and expe­ri­ence to lead Smoltek’s next step to a prof­itable and suc­cess­ful com­pa­ny. And we had a good plan for indus­tri­al­iza­tion and com­mer­cial­iza­tion with Yageo.”

“With this in mind, we con­clud­ed that we could best con­tribute in the future as mem­bers of the nom­i­nat­ing com­mit­tee and as active owners.”

But…

So how is it that, after only one year, Gramtec has direct rep­re­sen­ta­tion on the board again – by you?

“The sit­u­a­tion changed in March 2024, when Yageo decid­ed not to con­tin­ue dis­cus­sions regard­ing the license and ser­vice agree­ment that they and Smoltek had nego­ti­at­ed for quite some time.”

For Gramtec, as for all share­hold­ers and the man­age­ment team, Yageo’s deci­sion came as a surprise.

“We were under the impres­sion that the sign­ing of the agree­ment was well under way.”

At first, they didn’t under­stand the rea­son for the sud­den dropout. Was Smoltek’s tech­nol­o­gy not good enough? Had Yageo’s mar­ket analy­sis changed? But after a cou­ple of days, the pic­ture start­ed to become clear­er. There was noth­ing wrong with Smoltek’s tech­nol­o­gy, and the analy­sis was unchanged.

”Yageo told Smoltek that the rea­sons for their with­draw­al were entire­ly inter­nal. They still have a lot of faith in Smoltek’s tech­nol­o­gy and think that CNF-MIM capac­i­tors will be a game-chang­er in the market.”

As the dust set­tled, Finn Gram­naes, David Gram­naes, and Pro­fes­sor Peter Enoks­son, who Gramtec works close­ly with on own­er­ship mat­ters in Smoltek, sat down to dis­cuss their con­tin­ued involve­ment in Smoltek.

“We decid­ed to keep invest­ing in the com­pa­ny but felt we need­ed to get more involved again. Finn and Peter, there­fore, thought it would be a good idea for me to rep­re­sent Gramtec on the board.”

The Chair­man of the Nom­i­na­tion Com­mit­tee had pre­vi­ous­ly asked me the same thing. So, at a meet­ing that, of course, David Gram­naes didn’t attend, the Nom­i­na­tion Com­mit­tee decid­ed to pro­pose him for elec­tion to the Board at the Annu­al Gen­er­al Meet­ing on May 14, 2024.

Bring to the table

After this short cat break, I con­tin­ue the inter­view with David Gram­naes: What can you bring to the table as a board member?

We must demon­strate the tremen­dous val­ue of Smoltek to poten­tial part­ners or buyers

“I’ve been involved with Smoltek since 2015, so I under­stand the com­pa­ny and its devel­op­ment over the years. This has helped me con­tribute in dif­fer­ent ways, often as a sound­ing board for Finn in Gramtec’s own­er­ship role and hands-on in var­i­ous projects. For exam­ple, I’ve helped with Smoltek’s lat­est financ­ing rounds, which were suc­cess­ful despite a chal­leng­ing financ­ing cli­mate. So, I think my knowl­edge of Smoltek, both tech­ni­cal­ly and finan­cial­ly, is some­thing I can add.”

“I have also served on sev­er­al cor­po­rate boards over the years, pro­vid­ing valu­able experience.”

“Financ­ing is a big part of this expe­ri­ence. I don’t have a finance back­ground, but I’ve been deeply involved in rais­ing cap­i­tal for Smoltek and oth­er tech­nol­o­gy start-ups. So, I’ve got expe­ri­ence from both sides of the nego­ti­at­ing table. I think it’s a real strength to have both the investor and entrepreneur’s per­spec­tive on cap­i­tal and funding.”

Personal qualities

What per­son­al qual­i­ties will help you con­tribute to the work of the board?

“I’m an entre­pre­neur at heart and choose to focus on exist­ing oppor­tu­ni­ties. I tru­ly believe that any­thing is pos­si­ble. As an entre­pre­neur, I’m not very struc­tured, but over the years, I’ve learned to appre­ci­ate the impor­tance of being struc­tured to stay legal and compliant.”

After a brief pause, he adds: “I have found that I some­times think dif­fer­ent­ly than oth­ers, so I hope to bring some ‘out­side the box’ think­ing to the table. I am also an active and involved per­son. And I talk a lot. Some­times too much. But I think that helps cre­ate a good atmos­phere and encour­ages healthy discussions.”

Pursuit of shareholder value

So far, I’ve played him soft­balls. Time to lev­el up the game, so I ask him what he wants to push on the board.

”The Board’s cur­rent focus is to secure a com­mer­cial deal, part­ner­ship, or sale of one or more appli­ca­tions based on the tech­nol­o­gy or all or part of the sub­sidiaries. In doing so, we must be care­ful not to under­val­ue our com­pa­ny. To cre­ate the great­est share­hold­er val­ue, we must demon­strate the tremen­dous val­ue of Smoltek to poten­tial part­ners or buyers.”

”It’s the same for share­hold­ers. To cre­ate share­hold­er val­ue, we have to show the stock mar­ket what we at Gramtec see in Smoltek, which isn’t reflect­ed at all in the share price.”

“If there’s one thing I think is par­tic­u­lar­ly impor­tant, it’s investor rela­tions and com­mu­ni­ca­tion with the stock mar­ket. I think Smoltek has improved sig­nif­i­cant­ly in this regard over the past year, and I’ll work to ensure this continues.”

Smoltek’s past and future

I’ve saved the most chal­leng­ing ques­tion for last. I take a deep breath and start my ques­tion with a back­ground description.

Next year, Smoltek will cel­e­brate its 20th anniver­sary. The com­pa­ny spent many years focused pri­mar­i­ly on R&D with­out much empha­sis on bring­ing prod­ucts to mar­ket. Recent­ly, the com­pa­ny has focused on CNF-MIM capac­i­tors and cell mate­ri­als for PEM elec­trolyz­ers, putting all oth­er prod­uct ideas on the back burn­er. It looked like Smoltek would final­ly bring CNF-MIM capac­i­tors to mar­ket, but that all fell through when Yageo backed out of the deal. To keep afloat, the com­pa­ny has relied on investors for two decades. Those who invest­ed ear­ly, includ­ing Gramtec, have essen­tial­ly seen their invest­ments dis­ap­pear. What are your hon­est thoughts about Smoltek’s past and future?

Smoltek will be Gramtec’s best invest­ment ever

”Smoltek grew out of a research lab at Chalmers Uni­ver­si­ty of Tech­nol­o­gy. Going from lab to com­mer­cial prod­uct takes a long time, espe­cial­ly for cut­ting-edge tech­nol­o­gy with many skep­tics initially.”

”Finn saw the poten­tial of the tech­nol­o­gy in many dif­fer­ent busi­ness areas and invest­ed in the com­pa­ny in 2007. In 2015, Gramtec became the largest share­hold­er and, togeth­er with Pro­fes­sor Peter Enoks­son, took the sole respon­si­bil­i­ty for financ­ing the oper­a­tions until the IPO in 2018. Gramtec has con­tin­ued to invest in Smoltek and is com­mit­ted to sup­port­ing the com­pa­ny in the future. We’re more con­vinced than ever that Smoltek and its devel­oped car­bon nanofiber tech­nol­o­gy will be used world­wide in the next decade.”

”Look­ing back, I can see that a lot of time has been spent devel­op­ing the tech­nol­o­gy and build­ing rela­tions with com­pa­nies in the semi­con­duc­tor indus­try. This has been a good thing and has helped many glob­al com­pa­nies in the elec­tron­ics and semi­con­duc­tor indus­try to know about Smoltek. But some­times too much resources have been spent on projects and rela­tion­ships that didn’t result in busi­ness or partnerships.”

”In 2019, Smoltek took a deci­sive step from a com­pa­ny that only devel­ops tech­nol­o­gy to one that cre­ates busi­ness units based on the tech­nol­o­gy. Smoltek has cre­at­ed two such busi­ness units: Smoltek Semi, which devel­ops and mar­kets CNF-MIM capac­i­tors for the elec­tron­ics indus­try, and Smoltek Hydro­gen, which devel­ops and mar­kets cell mate­ri­als for PEM elec­trolyz­ers for the hydro­gen and ener­gy mar­kets. I think it was wise to cre­ate two busi­ness units because it’s hard to know at this ear­ly stage which busi­ness will take off first.”

”A lot has hap­pened in the com­pa­ny in the last few years, and Smoltek, with its two busi­ness units, has posi­tioned itself to achieve major deals and part­ner­ships. I think in the next two or three years, we will see sev­er­al major events. It will take time but I’m con­vinced that in the long run Smoltek will be Gramtec’s best invest­ment ever.”

Reflections

As I sit in the car, dri­ving along the E6 towards Gothen­burg, I think about every­thing David Gram­naes has told me, not least how he and Lena Olv­ing and oth­ers have recruit­ed peo­ple with the right skills and expe­ri­ence for the board.

As I run through the names on the board – Per Zell­man, Gus­tav Bris­mark, Emma Rön­n­mark and now David Gram­naes – it strikes me that Smoltek has a board that few deep tech com­pa­nies can match.

Admit­ted­ly, the board mem­bers are not the most well-known peo­ple in the busi­ness world, but what they lack in name recog­ni­tion, they make up for in high­ly rel­e­vant and valu­able knowl­edge and expe­ri­ence. They have hands-on expe­ri­ence from Smoltek’s tar­get mar­kets, the semi­con­duc­tor and ener­gy indus­tries. They have deep exper­tise in intel­lec­tu­al prop­er­ty man­age­ment and cor­po­rate financ­ing. They excel in prod­uct devel­op­ment and mar­ket­ing – which are the only core func­tions of a com­pa­ny, accord­ing to the father of cor­po­rate man­age­ment, Peter Druck­er. And, let’s not for­get, they all have years of expe­ri­ence sit­ting on boards and run­ning companies.

This diverse and robust set of skills pro­vides Smoltek with a Board of Direc­tors that, through its active and com­mit­ted par­tic­i­pa­tion in the company’s man­age­ment, pro­vides clear direc­tion and scope, as well as assis­tance and sup­port to the Exec­u­tive Man­age­ment in the day-to-day run­ning of the business.