How to Increase the Number of Women in Deep Tech

In honor of International Women’s Day and Women’s History Month, Maddie Callander (KF Class 25) of Boost VC showcases an often unseen angle of deep tech — the perspectives, challenges, & motivations of women VCs who are betting it all on the next generation of deep tech founders.

This week, we’re excited to hear from two influential women who join Maddie to explore the many facets of deep tech investing. Abby Hunter-Syed, LDV Capital Partner, and Tess Hatch, BVP Partner, lead discussions on increasing the number of underrepresented founders in deep tech, navigating the unique founding puzzle for deep tech startups, and how they are opening doors and paving the way for more diverse investors.

Catch each episode below or on iTunes, Spotify, and Anchor.fm.

This season of the Kauffman Fellows Podcast is produced in partnership with Mighty Capital. Together, we unravel what truly makes a great VC investor.

LDV Capital Partner, Abby Hunter-Syed, on Deep Tech for Visual Data

Kicking off week 2 of her miniseries, Maddie chats with Abby Hunter-Syed, Partner at LDV Capital, where she invests in people building businesses powered by visual tech. In this episode, Maddie and Abby look at LDV Capital’s deep tech investment thesis, how government, industry, and academia create a funding puzzle for founders, and how to increase the number of women and underrepresented founders in deep tech.

Tune in and catch some of our favorite soundbites below!

https://open.spotify.com/episode/7B5AUW3O1KIJCfGblajEfy

On LDV Capital’s thesis on deep tech

LDV Capital has a specific viewpoint on investing in deep tech.

“We only invest in visual tech. The vast majority of data our brains analyze is visual. For AI to truly succeed, it has to be able to analyze visual data as well. With LDV, we invest in visual data that’s being analyzed, organized, displayed, and distributed. We think of visual data as anything from photos and videos to x-rays, MRIs, LIDAR, radar, CGI, or VFX.

We look across all industries and sectors, up and down, the full tech stack. That, for us, is usually deep tech. We see deep tech as people who are looking at a detailed view of visual data. They are figuring out ways in which computers can analyze it for us.”

On what makes a great visual tech founder

Many great visual tech founders had the entrepreneurial spirit from an early age.

“We’re looking for entrepreneurial DNA. That doesn’t necessarily mean having a serial entrepreneur background. It means that you’re the kind of kid who wanted to start up a lemonade stand, or you’re the one who had a lawn mowing business and a snow shovel. You’re somebody who’s always looking to hustle. It is this desire to start something up outside of the box.

The vast majority of our companies have at least one Ph.D. on their founding team. That background where they have deep domain expertise in some technological innovation, or they’re thinking about visual tech in a way that others haven’t before. Those who have papers out there, and they’ve gone to the Conference on Computer Vision and Pattern Recognition (CVPR). They’ve got lots of acclaim for the breakthroughs that they’ve got for a leapfrog solution in the tech space.”

On the funding puzzle for deep tech startups

Deep tech faces a funding puzzle with government, industry, and academia.

“There’s been a lot of research going on about how most of these deep tech things have a lot of government backing before they ever see the light of day from a commercial side of things. For example, if you think about autonomous vehicles, it’s received tons of money from VCs, private equity, SoftBank, and everyone up the chain. However, the original funding was all from DARPA grants, and governments all across the world, making substantial investments.

Agriculture is another big one. There’s so much funding in the agricultural space. It’s coming from governments to start the initial stages and research. Once those research papers exist, you start to see the space where VCs get involved. There has to be a commercial application. From a government side of things, it doesn’t necessarily have to be a commercial application for them to want to fund it and have it be a valuable research project for them. There are pieces where all of this fits together. Universities are another big piece of that puzzle.”

On how to increase the number of women and underrepresented founders in deep tech

Hunter-Syed believes the key is to reach students and communicate what is possible if they become a founder.

“It goes back to education, encouraging, and talking to students about what it means to take that leap and be a founder. We try to ensure that we’re going to enough universities and talking to enough students to get them to join startups. There’s a lot happening today to encourage more women and people of color in STEM education. Now, it’s getting them to take the leap. We need to tell women and underrepresented founders that they can start their own companies out of their research too. They can run their own companies or join startups. It’s a good space to be in.

It’s about continuing those conversations as we go on creating inclusive communities. We run our LGV community dinners in New York. It’s important to ensure that everybody around the table understands that this is a safe space where inclusion is promoted. That needs to be the case for deep tech at every step of the way.”

Listen to the full episode above on Spotify or over on iTunes.

BVP Partner, Tess Hatch, on What’s Unique About Investing in Deep Tech

For her fourth episode of “Women Leading Deep Tech,” Maddie hosts Tess Hatch, Partner at Bessemer Venture Partners. Tess specializes in helping founders lay enduring foundations to create companies that matter. In today’s conversation, Tess shares the traits she looks for in deep tech founders, how she applies new ideas and models to deep tech companies, and why she loves investing in deep tech.

Tune in and catch some of our favorite soundbites below!

https://open.spotify.com/episode/1pM44XRhrmXciyfypbK7yu

On how the partners at BVP invest

While the firm has substantial capital and partners with a variety of diverse subject matter expertise, Hatch believes that she gets to do the fun stuff with deep tech.

“Bessemer is the oldest venture capital firm. We’re currently investing out of our 11th $2.6 billion venture fund. We also just raised our second nearly $1 billion Growth Fund. We can invest as small as $100,000 and as large as $100 million. We want to help support founders in every part of their journey.

We do like to partner early and help them grow and lead into market-leading businesses. I invest in deep frontier, tough, hard tech. However, each one of my partners has their subject matter expertise. We call them roadmaps, which are the areas that they focus on. Very popular, large ones include SaaS/cloud, cybersecurity, healthcare, HealthTech, BioTech, consumer, etc. I’m off in the corner doing space, drone, and autonomous vehicle, and then recently, the future of food technology.”

On her definition for deep tech

While her definition of deep tech is simple, investing in the space is the opposite.

“I view deep tech as turning theory into reality. It’s what was science fiction only a handful of years ago that’s the reality today.”

On the different traits of a deep tech founder

Hatch knows exactly what she’s looking for in a great deep tech founder.

“In every founder, I look for a growth mindset. I look for passion, grit, curiosity, and intellectual honesty. When it comes to a deep tech startup founder, I look for what that specific tech quality looks like. It doesn’t necessarily have to be a Ph.D. in the computer vision, SLAM technology the company is going after. However, it does have to be an immense understanding, a technological or scientific understanding, of the problem that they’re solving, whether that’s rocket science or the computer vision application.

I do look if they’re the only person or one of a handful of people in the world who even know how to understand this problem but know the problem intimately. That’s incredibly important.”

On how LPs and investors should be thinking about deep tech investments

It’s not necessarily thinking about deep tech companies as different than the rest, but instead applying other ideas and models to deep tech companies.

“Only 2% of businesses are venture-backed. Deep tech companies should be held to the same standards as the rest of the companies — the same Return On Investment (ROI) within the same time horizon. We look for exponential hockey stick growth growing quickly in a short period of time.

There are two points on this. One, just because you’re working on satellites, drones, or carbon capture with tough engineering and science, that doesn’t give you an excuse to forget to have a business model that accompanies that. The second part is that the best business model ever invented is SaaS and having a recurring model. It doesn’t necessarily have to be software. However, using that business model and making sure you’re measuring how you’re growing and stealing the metrics that SaaS companies track, whether it’s gross margins, net gross retention, growing quickly, or efficiently.”

Listen to the full episode above on Spotify or over on iTunes.