Startups, the so-called Deep tech often has a hard time raising capital for a variety of reasons. At the TechCrunch Early Stage: Marketing and Fundraising, two experienced investors spoke on the subject and advised startups on a challenging fundraising path.
Pae Wu and Garrett Winther are both partners at SOSV and lead the fund’s programs around biotechnology and hardware. SOSV does not shy away from startups that build complex technologies, and therefore Wu and Winther are well placed to advise on fundraising. They presented three key points aimed at fundraising startups for deep tech applications, but the points apply to startups of all types.
Before giving advice, the two recognized the nuances in the deep tech ecosystem and in every industry. Your presentation will focus on general guidelines that apply to almost any startup.
Find the right investor
The first point in Wu and Winther’s presentation sounds a bit selfish, but it is based on solid advice. If you’re building a deep tech startup, you’ll find the right investor, they said. This is general advice for startups, but according to these two, it’s even more important when building a business that may take longer for the investor to see a return on investment.
When it comes to deep tech, it’s important to think about the founder-investor fit. And what we mean by that is to understand why an investor is in VC in the first place. And what drives you, the founder, to do what you do.
And so we see this correspondence as a Venn diagram between founders who have an almost insane dedication to solving a core systemic problem and investors who benefit from the unique risk profile of deep tech. Because at deep tech, we’re both talking about technical risk, and perhaps this insight, which is at the heart of the business, just proves that we no longer have to break the laws of physics to do what you want to do. So there is a great technical risk. (Timestamp: 6:09)
As investors, we love to see methodical founders who see the first step that converges between technical and business milestones at the right moment.
Set achievable goals
Breakthrough technology hardly came from sudden breakthroughs. As explained in this presentation, it is important to set achievable goals that will lead to the desired result.