Deep-tech companies face a distinct set of challenges that set them apart from traditional startups. As venture capital investors in this space, we've identified several key hurdles that innovators must overcome on their journey to success.
Pivoting from Technology to Business
One of the most common challenges in deep-tech is the transition from developing ground-breaking technology to building a viable business. This shift requires not only technical expertise but also commercial acumen. As investors, we recognise the importance of bringing together visionary innovators with commercially astute partners who understand the industry and can shape the technology into a market-ready opportunity.
Resource-Intensive Development
Deep tech ventures typically require significant time and resources to answer crucial commercial questions. Unlike software startups that can quickly go to market and generate revenue, deep tech companies may spend years in development before seeing tangible results.
Defining Commercial Proof Points
Revenue growth is often a key metric for success. However, deep tech operates differently. Value inflection points in this sector are often tied to derisking the technology rather than immediate financial returns. For example, in healthcare, a successful clinical trial might be the key milestone, while in energy, it could be achieving a certain scale of production.
Communicating Value to Investors
These unique proof points can be challenging to convey, especially to investors unfamiliar with deep tech. Companies must learn to effectively communicate their progress and potential, translating technical achievements into terms that resonate with a wide range of potential backers.
In this video Ash provides some insight into the importance of understanding and addressing these challenges to better support innovations that have the potential to transform industries and solve some of the world's most pressing problems.
