First Momentum Ventures' David Meiborg on The European Deep Tech Hardware Napkin

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First Momentum Ventures' David Meiborg on The European Deep Tech Hardware Napkin

An insightful discussion on the world of European deep tech and hardware startups with insights from First Momentum Ventures' latest framework. Don't miss David's show notes below. ⏬

Oct 01, 2024

Transcript

In this episode of the EUVC podcast, Andreas discusses with David Meiborg, General Partner at First Momentum Ventures.

First Momentum Ventures, with their €30M fund, specializes in backing deeply technical founders at the pre-seed stage. Their focus spans deep tech, industrial climate tech, dev tools, data, and enterprise SaaS across the DACH region and beyond.

In today’s discussion, David introduces us to the Deep Tech Hardware Napkin framework they recently launched, which includes the latest benchmarks on funding, team, product, and commercialization, broken down by stage. The Napkin and full report are based on a survey completed by 30 DeepTech VCs from 8 countries.

Download The Napkin and Full Report here

Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.

Join us for Expand North Star in Dubai - the world’s largest startup and investor connector event.

Discover the tech and investment opportunities fuelling growth across UAE, MENA, and APMEA regions at Expand North Star, inspired by GITEX GLOBAL, on 13-16 October 2024 at Dubai Harbour.

✍️ Guest show notes:

We believe in giving you our guests' thinking directly and unaltered. Therefore, no changes, no AI, no nothing has been done to the following sections.

DeepTech funding landscape.

The new Napkin research by First Momentum Ventures provides a breakdown of funding stages for deep tech hardware startups, from pre-seed to Series A.

This includes detailed information on post-money valuations, round sizes, and typical public funding amounts at each stage, offering valuable insights for founders and investors in this sector.

The napkin also provides insights into the role of public funding in deep tech hardware startups, showing how it typically increases from pre-seed to later stages. This highlights the importance of non-dilutive capital in supporting deep tech development.

Technology Maturity's Impact on Funding.

First Momentum Ventures introduces a four-stage framework for assessing technology maturity (concept, lab demonstrator, industrial pilot/POC, advanced) as an alternative to the traditional TRL scale.

This new model offers four distinct stages:

Concept Stage

Technology exists primarily on paper
May include initial experiments or calculations validating the science
Example: A research paper on a novel thermal storage battery
Notably, almost a third of all Pre-Seed companies are at this early stage

Lab Demonstrator

Small-scale, lab-based prototype
Demonstrates basic feasibility in a controlled environment
Example: A table-sized thermal storage prototype

Industrial Pilot/POC (Proof of Concept)

Product demonstration in a real-world industrial setting
Meets customer demands but with certain limitations
Example: Scaled-up thermal storage systems deployed in an industrial facility, but with limited battery capacity

Advanced

Fully productized technology
Ready for deployment at scale
Subject to continuous improvement
Example: "Battle-tested" thermal storage systems with high robustness and solid efficiency

The profile of successful founders in DeepTech teams.

Most successful DeepTech hardware startups are founded by PhDs with extensive R&D experience, primarily from academia. These founders are valued for their ability to continuously create new IP, driving ongoing innovation.

Contrary to conventional wisdom, the most successful teams often feature a highly technical CEO with strong commercial savvy. Combining deep technical knowledge and business insight is important for understanding deep tech commercialization.

The discussion outlines how hiring strategies evolve across funding stages:

Pre-Seed and Seed: Focus on R&D with tech executives leading software and hardware teams. Some startups hire individual contributors for functions like sales, operations, and HR.
Series A+: As technology matures and funding increases, startups build dedicated teams across commercial and operations, hiring senior team leads.

The discussion also looks at some counterintuitive findings:

Teams led by highly technical CEOs (without business backgrounds) tend to raise significantly more funding at Seed and Series A stages compared to those led by CEOs with business backgrounds.
Surprisingly, teams with extensive industry experience (at least one founder with >5 years) consistently raise less money across all stages compared to less experienced teams.

Join us for Expand North Star in Dubai - the world’s largest startup and investor connector event.

Discover the tech and investment opportunities fuelling growth across UAE, MENA, and APMEA regions at Expand North Star, inspired by GITEX GLOBAL, on 13-16 October 2024 at Dubai Harbour.

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