DeepTech Commercialisation

Fight this argument with logic if you will, and time will almost certainly prove your logic to be wrong. After all, how many of you will drive home this evening in your amphibious car, sit down on a folding walking-cane-stool to eat your dinner with a spork and then settle down to watch some TV and snuggle up for night’s kip on your sofa-bed? #startup #deeptech #deeptechcommercialisation #productmarketing #lessismore #productmarketfit

What a brilliant Deeptech Labs Cambridge demo day yesterday!! In addition to seeing the ultra-polished and highly compelling startup pitches (check them all out, links below) a real highlight was listening to ARM Holdings, LP founder Jamie Urquhart in conversation with Miles Kirby. Many great takeaways, but some specific highlights that in our experience are directly applicable and really important for deep tech startups..  💪 ARM's history was a story of persistence and also (admittedly) a bit of good luck!  🤞 Often both are needed.. persistence gives time for good luck to happen 📈 Market segmentation (requiring market understanding) was vital to their growth story 👩💻 ARM is the ultimate example showing how the right #businessmodel is as important a factor of success for deep tech, as the underlying tech itself 🤝 "We didn't know enough about our target market to build our own chips" so ARM built partnerships  🏡🏃♂️ ARM’s partnership model enabled them to first gain successes with ’second tier’ clients, and then leverage these to close deals with the prime players Check out the amazing deep tech startups: • High Temperature Material Systems - materials for EV battery enclosures • Panazee - ultra-sensitive instrumentation for early Alzheimers detection • Sterling Bio Machines - increasing yields in biomanufacturing • Monumo - driving increased efficiency from electric motors • Silveray - flexible digital X-ray detectors for weld inspection • HoloMem - holographic cold data storage #deeptech #businessmodel #ukinnovation

Tristan is CEO of an exciting AI company, which is getting traction with enterprise clients, just raised $10m, and has two years' runway. But thanks to the pref stack, he's the saddest founder in our portfolio. Here's why. 1. Cumulative dilution. Every founder knows that multiple funding rounds compound your dilution -- if you give away 20% at seed, A, B and C, you're left with about 41%. If your magic number for personal proceeds is $10m, it's tempting to think that a $25m sale will hit your target, since $10÷0.41=$24.41. That doesn't sound too hard to achieve. But wait... 2. The pref stack. Standard VC terms include a 1x preference, meaning that in an exit, they get either their percentage of the company or their money back, whichever is more. So if you raise $10m at $30m pre, but then sell for $25m, the last-round investor gets the first $10m in proceeds, and the rest split the $15m that's left. The same arithmetic repeats for each round, starting at the top. That's the pref stack. 3. How you get nothing. You thought those rounds with valuations at $50m or $100m proved how smart you were. In fact, each one raised the bar for your own exit. If there isn't enough left in the pot after a pref kicks in, then that pref holder gets the pot and everyone below gets nothing. That's how you end up in a situation where you can work like hell for ten years, build a company, exit for $80m, and walk away with nothing. 4. The truly scary bit. If the investors get 'participating preferred', the founders' journey to zero can be even faster. The VCs first get their money back, then dip in the pot a second time and get their percentage of what's left. Some deals (especially those that throw in bragging rights by nudging the company across the unicorn valuation line) have 2x or even 3x participation, where the VCs get a multiple of their invested cash before sharing the pot. And let's not even talk about antidilution or full-ratchet. 5. The difficult discussion. If a VC invests hoping to make 10x, and you come back six months later reporting an exit offer at 1.5x, you might think that IRR of 125% will make them happy. But no: it doesn't match the strategy they pitched to the LPs who are their investors. So if they think the company is doing well, they'll instinctively be looking for reasons why you can hit that 10x after all, and may well resist the exit.

Only 1% of pitch decks secure venture capital—why? The difference lies in details you might be overlooking. Discover the must-have slides that make investors say 'yes' (according to Sequoia Capital): Here's how it works: 1. Define your company's purpose with clarity. 2. Address the problem with insight. 3. Present your solution as a beacon of hope. 4. Time it right; why now, not later? 5. Map out the market; show your understanding and potential. 6. Outshine competitors by highlighting your edge. 7. Detail your product like the masterpiece it is. 8. Explain your business model; make it compelling and clear. 9. Showcase your team; the architects of your vision. This isn't just about numbers or graphs. It's about creating a narrative that makes investors feel at home with your vision. Every slide, every figure, every graph should tell a part of your story. From understanding the problem to presenting a game-changing solution. Start with why. End with how. —— ♻️ Found this helpful? Repost it so your network can learn from it, too. And follow me (Chris Tottman) for more content like this. #BrainDumps 🧠 💩 // Brain Dump #30

Key insights from a deep tech unicorn. “I think we see a lot of deep tech companies that don’t solve pain points that are painful enough.” ... "deep tech firms sometimes become enamoured with solving a problem, only to discover—after investing in development—that the market doesn’t find it interesting enough. #productmarketfit #deeptech #techcommercialisation

It is an absolute pleasure to have been selected by Deeptech Labs as one of their startup mentors. Yesterday was my first set of 1:1 'Expert Sessions', discussing #ValuePropositions, linked with #ProductMarketFit, because in my experience these two topics are inseparable! A brilliant cohort of deep tech businesses including #CarbonCapture, #GlucoseSensing and #Biotech food ingredients. I was very pleased that my 20+ years of experience in #3DPrinting tech came in handy and even dusted off my very rusty #spectroscopy knowledge. Some VP specific tips from me: - It's common for early (esp deep tech) startups to put all emphasis on their technology. Using a Value Proposition helps them focus communications around value, which ultimately is what the future customer will really care about. - It drives the startup to think less about 'what we do', and more about 'what we enable you (user/customer) to do'. - In the early days (pre-product, pre-PMF) your Value Proposition is somewhat hypothetical. So, embrace this and use it as a comms tool to test your ‘Value Hypothesis’. DM me to talk more about Value Propositions in relation to Product Market Fit. Also follow DeepTech Commercialisation for more relevant content. Also brilliant to meet fellow mentors Ambroise Popper, Nicky Dibben, Lorena Szerman, Leonie Mueck !! Shout to the amazing founders: Beena Sharma, Henry Saunders, Nicholas Furtak-Wells, Tim Echtermeyer, Matt Hutchinson !! #deeptech #commercialisation #startups #productmarketfit

Check out our new blog post: Have you ‘lived’ the problem you propose to solve? https://lnkd.in/e8RSmRYX #problemsolutionfit #problemsolutionhypothesis #hardwareishard #productmarketfit #deeptech #techstartup

If you are currently running, or thinking of launching a hardware startup, then here are five essential points you need to understand before you go further. #productmarketfit #hardwareishard #hardwareishard #deeptech #startup #entrepreneurship

New blog post. "What should be de-risked at each funding stage?" We've seen a ton of these kind of growth/risk charts and they pretty much all make the same ‘mistake’, at least in our view. Read why we feel so strongly about this... https://lnkd.in/eVwJWRzV Contact us at DeepTech Commercialisation to learn how we can help you formulate a plan of action to de-risk your tech/product and market in parallel, thereby significantly reducing your overall startup risk, much earlier in your process. #startuprisk #marketvalidation #productmarketfit #venturecapital

Excited to test this!