The challenge of deeptech investing

DeepTech enterprises are distinguished by their blend of visionary ambition, basic research, and commercial pragmatism. In general, most successful #DeepTech ventures share four primary attributes:

• They are problem-oriented, i.e., they aim to solve significant and fundamental challenges to society 
• They look at using the best existing or emerging technologies to solve the problem at hand, e.g., advanced materials, synthetic biology, AI, or quantum technologies.
• Their digital proficiency is focused on using AI, ML, and advanced computation to explore physics, chemistry, and biology frontiers.
• They are catalyzing the emergence of a new cross-organizational ecosystem for investment, support, basic research, and application development.

However, DeepTech is still considered a niche investment, and it has developed in a skewed and patchy fashion. The DeepTech #investment environment is likewise geographically concentrated, with promising initiatives in Europe, China, and the rest of the globe underfunded substantially.

These are the four paradoxes showing that DeepTech investment is broken, and there is a lot of room for improvement.

• Investors are drifting away from their original mindset, which was taking risks and going more toward distributed returns.
• Investors are concerned about their position vulnerability. The riskiest move is avoiding deep tech, for the same reason that avoiding digital investments was risky in the late 1990s and early 2000s. However, if investing, by not fully understanding the future disruptions, they might invest in the wrong startups, and the whole portfolio might be exposed to DeepTech.
• The barriers to DeepTech innovation are falling, but the entry barriers for investors raising DeepTech funds are getting higher. Much of the large-capital investment needed by deep tech is bound up in the kind of sizeable legacy funds with solid reputations that limited partners prefer.
• There is plenty of available capital but little investor momentum. As one survey respondent put it, “The biggest challenge we face is being able to tell a story about what the tech means.” A pitch isn’t a thesis, and many DeepTech scientists don’t understand the grammar of venture capital.

Register now to hear from experts how to build a robust ecosystem, new funding structures, and an articulated narrative to support #DeepTech ventures.

• 𝐓𝐈𝐌𝐄: Thursday, 09.09.2021; 19:00 – 20:30 (VNT)
• 𝐋𝐎𝐂𝐀𝐓𝐈𝐎𝐍: Online via Zoom
• 𝐑𝐄𝐆𝐈𝐒𝐓𝐄𝐑 𝐇𝐄𝐑𝐄: https://bit.ly/Etalk-Season2