Ever thought of investing in greentech? The early stage ecosystem there is much less developed -- there are simply fewer investors participating. I think what's limiting them is mainly non-essential: a combination of forbidding myths about capital intensity + regulations + time to market, plus the science being trickier. Probably a lack of angels who became wealthy from the space is an issue too, but there is no shortage of angels who were formerly physicists, aerospace engineers, chemists, biologists, etc.
There are massive opportunities, and the capital cost & lead time, at least in the earliest stages, are not nearly so bad as people assume. Working on design and theory costs roughly as much as a web startup -- founder's living expenses, some time at a machine shop, a few sourced parts.
At least that's how it was for us.
I think that the valuations, if you look from afar, are can seem pretty staggering as well, but I think that burn rates can be made low with the right approach.
I'm finding the same exact reaction in medtech. Same foreboding myths, same massive opportunities, and same chance to build lean operations. We're grinding along but I'm surprised that tractable obstacles look scary to otherwise savvy investors.
Have you looked into government grants? It's a very different process and set of expectations than a pitch deck, but the capital is non-dilutionary and there is a bunch of stimulus money sloshing around. Obama seems to recognize that the future US economy will be in biotech and greentech.
Really? I've always found the number one barrier in medtech to be fact that the feds won't let you unleash cutting edge new medtech on humanity without a crushing time and money penalty to prove it is safe and worth it.
Just so people don't miss interpret what I'm saying: I do think we should try to prove medtech is safe and does something. But I think the quantity of proof we require slows down innovation tremendously. And the penalty we pay for bringing things YEARS to market later then we could have is human lives.
That's something I'm also hearing. What's the best way, do you think, to help educate investors? Or is that simply not possible because the unknown risks seem daunting? I'm sure it's hard to trust an enthusiastic and green startup. Is that a sticking point?
I understand why web apps are easy to understand, if done well. But opportunities in greentech and medtech seem like a huge unmet need. We have health and defense grants to fall back on, but for seed-type money we can bring a product to the medical market. That to me is where a quiet revolution is already underway.
I dunno. I invest in internet startups because I know the product space, I can do most of the work myself (I can code, I can make product decisions, etc) and I have a good sense of where it will go. And I'm excited about the space.
Cleantech (and medtech) are fascinating, but I don't have the thousands of hours of focus that I've had on webtech. It feels like I'm just analyzing the numbers when I look at those deals, and that makes me a bad angel there.
I'd consider a VC fund with some background in it, though.
There are massive opportunities, and the capital cost & lead time, at least in the earliest stages, are not nearly so bad as people assume. Working on design and theory costs roughly as much as a web startup -- founder's living expenses, some time at a machine shop, a few sourced parts.
At least that's how it was for us.
I think that the valuations, if you look from afar, are can seem pretty staggering as well, but I think that burn rates can be made low with the right approach.