What Deep Tech Investors Really Want

We asked VCs how to get your deep tech startup funded (without selling your soul)

All insights from this article were taken from our event, ‘Let’s Get Deep! An In-Depth Conversation With Deep Tech VCs’. Meet our VCs: 🎤

• Natalia Ahmadian – Investor at Earlybird-X
• Ferdinand Vermersch – Associate at Vsquared Ventures
• Benjamin Wolba, PhD – Associate at Lunar Ventures

But first, WTF is deep tech? 🧐

If you already know, kudos, you can skip this part. But if ‘deep tech’ sounds like a buzzword from a sci-fi movie, we get it, read on.

Deep tech is basically companies using cutting-edge scientific research to tackle major global challenges. Think artificial intelligence revolutionizing healthcare, or quantum computing changing the way we process information. It’s about pushing the boundaries of what’s possible, with research at its core.

Now, let’s dive in. We gathered intel from top deep tech VCs to spill the beans on what makes them say ‘yes’ to an investment.

You put the ‘deep’ in deep tech

Let’s start by addressing the obvious: deep tech investors are on the hunt for the next big thing in technology. They’re after innovations that not only push the boundaries of what’s possible but also have a solid foundation in research. These investors aren’t satisfied with small improvements; they want to see game-changing advancements that stand out from the crowd. These are the innovations that have the potential to shake up industries, transform markets, and even create entirely new ones.

So you’ve got the tech, but what else do you need? Let’s delve into what deep tech investors are seeking beyond just innovative technology…

You’ve built an excellent (not just good) founding team.

“People need to know their shit. They have the expertise in house, they’ve been doing research and engaging with their product.” – Benjamin

VCs aren’t interested in solo shows. They want to see a well-rounded team with both cutting-edge scientific expertise and a knack for understanding markets. Remember, it’s not just about the tech, it’s about making money too.

Look for a commercial co-founder to bridge the gap between your lab and the boardroom. VCs need someone who can translate your brilliant ideas into lucrative business opportunities.

You are a storyteller

You’re not just selling a product, you’re painting a picture of the future.

Captivate investors with a compelling narrative that goes beyond the ‘business + tech’ formula. Explain how your innovation will positively impact the world. As a deep tech startup, you’ll need to captivate and keep the trust of investors and collaborators along the (potentially long) journey.

You have an ambitious goal

VCs are looking for people who are dreaming about the future. So be ambitious!

“Sometimes we meet founders who are lacking the ambition, they’ll make something super useful but it might just be 1 million in revenue. We want people to dream big and create a minimum unicorn, there’s no limit to your ambition, go build a decacorn”. – Benjamin

If you’re looking for a framework – check out ‘Founders from the Future’ by Mike Maples.

You have a pitch to blow their socks off

You may have been expecting this one, but you can’t underestimate the power of a smooth and clear pitch deck. The goal is to generate interest and it’s the first thin VCs will look at.

Here are some tips from our VCs:

• Before you pitch, do the research on the VC you’re talking to. Make sure they can actually add value to your company with network expertise and have portfolio companies with synergies. Show you’re engaged with what the investor is doing.
• Don’t get caught in jargon. Keep it simple! Assume investors aren’t science whizzes. Explain your tech clearly and concisely.
• It’s all about the team, not just your genius idea. Highlight your team’s strengths and collaborative spirit.
• Show a clear path to profitability. VCs invest for returns, not just cool ideas. Demonstrate how your innovation will generate revenue.
• Anticipate the questions: Be ready to answer tough questions with confidence and data-backed evidence. Show you’ve done your homework.

You know the latest trends in deep tech

It’s getting easier for deep tech founders to raise their first round. More VCs are shifting to deep tech, so there’s great momentum building in Europe.

We asked our VCs what some of those are:

• “Everyone is hyped about AI. It’s obvious. What’s not obvious is what the hardware layers look like. From new lithography methods to new chips, analog AI chips, what is more efficient than GPUs? How to use photonics for computing?” – Benjamin

• “Novel computing modalities are exploding and they’ll only gain more momentum as we move forward. Timing the next big thing is not as straightforward as it would be in other fields.” – Ferdinand

• “Climate tech is something very interesting. Also climate tech risk assessment. Everything related to health teach, as this is a massive challenge we’ll face int he coming years, we’re looking for solutions that will solve these challenges. Novel computing also.” – Natalia

💡 How to get in touch with VCs

Network! Go to events where there are VCs, don’t pitch them, ask them questions and make a connection. Understand their specific investment criteria.

“Go out, share what you’re working on, what you’re looking for, be very transparent, people have networks and are often happy to support.” – Natalia

Lastly…

Here are some extra ways VCs can support you

• Strategic introductions & network building. VCs connect you with industry experts and potential partners, accelerating your growth.
• Commercial development guidance. Need help navigating the market? VCs provide valuable insights and expertise.
• Regulatory support, HR, PR & legal. Don’t get bogged down in red tape. VCs can help you navigate complex issues.
• Psychological support & mentorship. Building a startup is tough. VCs offer guidance and support to keep you motivated and focused.
• Industry expert connections & academic partnerships. Access the best minds in the field and accelerate your innovation journey.

Now you have insights from some of Berlin’s top deep tech VCs, nothing is in your way! Go forth, conquer the Deep Tech landscape.

💥 If you’re a startup in the deep tech space with a smashing idea, read this:

Silicon Allee have teamed up with Fraunhofer HHI to supercharge support for deep tech startups. Based in Berlin, we offer financial support, stylish office space, access to cutting-edge tech at Fraunhofer HHI, and founder-friendly terms. Applications are now open! Find out more and apply here.