Friday, June 22, 2018

The Term Sheet | Newsletters - Lux Capital partner Renata Quintini

The Term Sheet | Newsletters



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One thing about moonshot investing is that you know the market is there. If you cure cancer, are people going to buy the drug? Yes. If you figure out completely autonomous transportation, will people use it? Yes.
So the market risk is close to zero. That leaves a big technical risk, I'm not underestimating that. But then you ask — What changes in science and technology would actually make this breakthrough possible?
Before investing, we ask ourselves three questions. The first is "why now," which is critical for deep tech investing. It's a combination of either platform changes or a new sequence of discoveries — a big change that opens up a bunch of new experiments that weren't possible before.
The other thing we spend a lot of time thinking about is whether this is feasible in the time frame that is conducive to venture capital. If a founder says they'll spend 15 years developing something, it doesn't work for the model.
And the third question you ask is, "Given your timeline of development, how does a business stack on top of that?" It's really fun to invest in these types of companies because you have people who know the science deeply and they're missionaries. They're more purpose-driven than opportunistic.

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