I find myself struggling with the question of whether Deep Tech must always be a long-term prospect, by definition.
Sure, creating meaningful innovation takes time. Deep Tech means that a lot of research and development is going into this new product or service. And as an early-stage investor this would lend itself to a long-term investment strategy.
Accordingly, most of the companies that we invest in require significant R&D before they can go to market. We focus on these companies because that is where we can roll up our sleeves and lend a hand. We find ourselves mentoring them as they navigate early customer engagements to bring the voice of the customer into the R&D process. This helps create truly game-changing innovation and strong product-market fit. And the next round of funding to continue their growth.
But then I meet a deep-tech-driven company that believes they are market ready. They are usually wrong. If so, then we can still add a lot of value and they are just placed later on the spectrum of early-stage, a little closer to a Series A than to a Seed round. Still well within our wheelhouse. However, if they are right, should we even be considering them as an investment opportunity?
From a portfolio construction perspective it makes a lot of sense to have some “later stage” companies which may generate earlier returns. It also balances the levels of engagement required from our team amongst the portfolio companies, as far as the time we spend with each.
Despite these considerations, I find myself second-guessing myself. Am I too just being anxious instead of practicing the patience I preach to my LPs? Or can Deep-Tech be engaged with the market and still be considered Early-Stage?
In Israel we are on our way into lock-down. Again. Just as the Jewish High Holidays are upon us. A time of coming together to bring in the new year with prayer – giving our thanks for the previous year and sharing hopes for the new one – with family and friends, in synagogues and around our tables… Well, that is not going to happen this year.
While some may argue that this is most fitting considering the past 6 months, it is still frustrating. Frankly, I think we could have done better.
It is easy to blame the government (now that we finally have one!), and some might even say that they prefer this approach as the easy way out. It seems to me that the timing of the lock-down actually makes sense. Besides it limiting the masses customarily coming together, it also takes advantage of the numerous vacation days already built into the Israeli calendar during this time of the year. In their defense, I do realize that this is the first pandemic they have been called on to lead us through. But the numbers are rising quickly and every delay creates a sense of “too little, too late”.
The period leading up to Rosh Hashana – the Jewish New Year – is a period of introspection. Taking stock of where we are and who we are. Compare these with what and who we want to be. Make commitments to do better in the new year… Take personal responsibility for making the world a better place by each doing our part.
I look around and I know that we can do better. We must take personal responsibility to adhere to the social-distancing guidelines, while creating personal accountability for the health of others in our communities.
That is the only way we can contain the pandemic, as we continue the search for a vaccine… May it arrive swiftly in the new year so we can start to rebuild – emotionally, economically and, most importantly, together.
Shana Tova! May it truly be a good year of health and prosperity for us all.