Deep tech needs IMPATIENT capital

I was speaking to another investor last week and she said: "I suppose deep tech needs very patient capital?".

I almost defaulted to the normal, affirmative answer, but it niggled me. And then I said:

"Actually, no. It needs IMPATIENT capital."

Any startup is funded through a series of capital stages. None of these stages can invest along the whole lifecycle of a startup. In the early stages there is too much risk for the big cheques, but there are smaller pools of capital to build the evidence that the big cheques need. Each of these stages is a temporary custodian of capital. For the most part, they need to return that capital with a multiple within a fixed time window. None of them can get there alone.

In deep tech, we might be building rockets, quantum computers or networks of factories all of the world. This takes time and we need 'impatient capital' for each stage. Each stage must be obsessed with how to slingshot the startup to the next investor proof-point in the time we have.

We can't except 'slower' because we might not make it to the next stage.

This sounds like the investor tail wagging the startup dog, but it is actually a useful dynamic in deep tech company building. It aligns us. Everyone that can move a company forward is focused on the next milestone, dragging a complex, game-changing company into existence, often against the odds.

In the end, the whole finance stack needs to add up to patience, but each phase needs radical impatience.

WDYT?

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I'm a Partner at Main Sequence, a VC purpose-built to create global companies from scientific ideas with the inventors who imagine them. I build-out-loud here: https://philmorle.substack.com