LtM ep7 - The State of Investment in Deep Tech with Leslie Jump and Mack Kolarich from Different

05/19/20 • 59 min

Leslie Jump is the CEO and Mack Kolarich the CPO of Different, an organization that helps institutions and family offices discover, analyze, diligence, and select venture capital funds.

They recently completed a remarkable DeepTech Investing Report based on more than 150 interviews with VCs, LPs and other stakeholders.
The report was funded by Schmidt Futures, a philanthropic vehicle created by former Google & Alphabet Chairman Eric Schmidt and his wife Wendy to “advance society through technology, inspire breakthroughs in scientific knowledge, and promote shared prosperity”.

Prior to Different, Leslie and Mack had diverse experiences including founding and investing in tech companies, and running investment workshops around the world.

This podcast is hosted by Benjamin Joffe, Partner at SOSV, a global early stage fund focused on deep tech. SOSV runs multiple accelerator programs including HAX (intelligent hardware) and IndieBio (life sciences).

Episode Overview

In a recent podcast with Joe Rogan, Elon Musk said:

"There’s an over allocation of talent in finance and law. We should have fewer people doing law and fewer people doing finance and more people making stuff. [...] If you don’t make stuff, there’s no stuff."

This seems especially true in deep tech.

In this episode, we discuss:

How scientific entrepreneurs are under-capitalized relative to the market and relative to their own potential.
What are the causes of this capital gap.
How media and others have trained VCs and LPs to look for, and expect unicorns, outliers and outsized multiples.
The optics problem of science vs. software startups with LPs and banks.
How most deep tech funds partners don’t have PhDs, but rely on networks on experts.
How — since when asked about a startup potential, 3 PhDs will give you 3 different answers — the job of investors is to figure out which one to believe.
How talent is spread out geographically more than we might expect, and how deep tech startups do not only come from universities.
The challenge of training or complementing scientists with business skills , particularly in ecosystems without a critical mass of business talent.
How LPs suffer from network bias when picking VC funds, and why only a minority is able to vest new deep tech funds, thinking ‘I don’t know how to know if they know what they’re doing’.
Why, within the ‘alternative assets ’ class, deep tech funds combine the highest risk, highest fees, longest terms, but also how delivering superior returns require new approaches , and how Covid-19 demonstrates that we need deep tech more than ever.
How deep tech startups differ from FMCG or SaaS companies, and why investors might have to custom-design KPIs for each company.
How looking outside of tech helps think differently about tech.