To understnd how early stage venture capital (vc) works requires to go back to how the technology transfer cycle works.

Venture Capitist operate in “the gap” between research and commercialization often identified as the valley of death, providing capital, access to network and expertise to invested TEAMS.

The first element to understand when talking about VC is to understand that they play a totally different game respect to traditional companies, incubators or accelerators. They usually play with the someonelse money, thus their primary objective is to return this money (+a decent return) to their investors after a fixed timeframe (usually 10 years).

The most important lesson that needs to be understood as soon as possible is therefore that VC is a form of financial asset class.

Your business, therefore, must meet very strict parameters for being of interest for this type of investor. And even though you might meet them, investors might not care about your business at all (especially if things are not going as planned I would say).

Why Investors Don't Care About Your Business

Incentive designed in the “financial product” therefore shape how VC make decisions.

To start understanding how they operate, deep-tech founders need to know

1. Whether your project has the characteristics for being financeable by Venture Capitalists
2. What to expect when interacting with them

If you still have a little idea about these two points, today you are lucky: it happens that I wrote to short guides exactly on these topics 😉

Guide 1: Is your Spin-Off a startup?

Guide 2: ‣

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This section is a work in progress… sooner or later we will cover how incentives shape the venture capital business, how they make decisions, and what drives their return (and even if they are capable of returining money), always adopting a founder point of view. Consider subscribing to the newsletter or supporting the blog (see below) to have content developed faster 😉

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