Notes on deep tech VC
Reading the market for atoms, not just bits — and where the two finally meet.
The phrase "deep tech" is doing a lot of work right now. It used to mean hard science with a long road to revenue. Lately it means anything with a physics diagram in the pitch deck. The first definition is more useful, and the more interesting question is what's actually fundable inside it.
A few rough notes from the last six months of conversations.
The thesis everyone shares
Every fund I've talked to has some version of the same line: software margins on hardware businesses, AI as the connective tissue, and a regulatory tailwind in energy or defense. The line is correct and almost meaningless — it's a description of the entire frontier, not a thesis. The differentiation is in what each fund refuses to fund.
Where the two stacks meet
The interesting deals are the ones where the bits stack and the atoms stack are no longer separable. A robotics company whose moat is the data flywheel from a million deployed units. A materials company whose moat is a simulation pipeline nobody else has tuned. A biotech whose moat is, frankly, a really good internal eval harness.
The check size is for atoms. The defensibility is in the bits. Founders who can only speak one language get under-priced or over-priced; almost never correctly priced.
What I'd want to see more of
I'd want to see more founders who came up through operations — supply chain, fabrication, deployment — rather than research. The research is increasingly commoditized. The ability to ship a real machine on a real schedule is not. Capital is going to flow toward people who can run a factory floor and read a benchmark with equal calm.
Most of the rest is narrative. The market for atoms is finally pricing the bits, and it's going to keep being lumpy for a while.