116. Introduction to Deep Tech investing

When investing in Deep Tech, remember that technology is just a tool, not an end in itself. Understanding who will use it and why is key to becoming smart money.

Learning notes from this episode:

• When investing in any business, you must consider these questions:
  • What problem are you solving?
  • Who are you solving it for?
  • Are they willing and able to pay for it?
• Understand what stage of the innovation cycle the start-up is in. This will help you evaluate risk properly.
  • For example, the first lab grown burgers were unaffordable for most people. The risk at that stage was not whether the product can be made, but whether it can be made at a cost that would allow wide scale sales.
• Get a technical expert to evaluate the start-up’s invention and help you understand their risk. Take note if no other deep tech investor is involved.
  • This is what happened with Theranos. Prominent biotech VCs passed on the round because they had the expertise to know that what Elizabeth Holmes was promising could not be built.
• One of the best ways to learn about Deep Tech investing is to attend accelerator demo days. Listen to start-up pitches and take note of what experienced deep tech investors are asking about.
  • For example, you could start with the Duality accelerator ran by the University of Chicago’s Polsky Center, which focusses on quantum computing start-ups.

Resources mentioned in this episode:

• Episode 4. What Non-Technical Founders Need to Know About Tech (interview with David Segura)
• Episode 31. How To Transition Into Venture Capital (interview with Nilesh Trivedi)
• Episode 114. What is Deep Tech? 

Listen here on Apple Podcasts

Listen here on Spotify

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