Successfully investing in deep tech requires more than just capital. It requires insight, patience, and a clear framework for identifying the right teams and technologies.
Smart investors start by asking the right questions early
Investing in early-stage deep tech requires more than just capital. It requires insight, patience, and a clear framework for identifying the right teams and technologies.
The best investors are not just backers, but early partners in shaping strategy, de-risking execution, and securing the right follow-on support.
For those willing to engage, the opportunity is significant – but it starts with asking the right questions early.
A good first question to ask is whether the team includes someone who understands how to build a company. At the very least, they will have brought in advisors or co-founders who do have that capacity. This is essential as a team with only technical competence will struggle to execute once the first prototype is complete.
Early-stage investors should also look at the technology maturity level. Is the company operating at TRL 2 or TRL 6? Be sure to request specifics about what’s been demonstrated, in what setting, and with what limitations. A realistic development roadmap – including estimated costs and timeframes – should follow.
In addition to the tech itself, check the company’s IP positioning. You’ll want to know whether the team understands IP strategy – provisional filings can often be a positive sign here. Furthermore, inquire whether they own their IP or have the freedom to operate.
What about the team’s understanding of the market? Do they understand how buyers operate? Are there regulatory barriers? What’s the sales cycle? A lack of detail in answering these questions can be a red flag that the team hasn’t put in the time with potential users.
Another thing to find out is how much funding is needed to reach the next inflection point. A credible deep tech team knows what milestones to hit to unlock Series A capital – and what those investors will look for.
Last but not least, investors should look at external validations and partnerships. Ask whether the team has worked with any corporate partners, accelerators, or domain-specific institutions. Even if no revenue exists, pilot agreements, LOIs, and advisory relationships can help de-risk the investment.
Deep tech by the numbers
Baltic deep tech startups have attracted over EUR 160 million in venture capital.
Best practices in deep tech commercialisation
Best Practice No. 2: Addressing a researcher’s lack of business experience
One of the challenges universities face is that many deep tech ideas come from professors or researchers who are hesitant to pursue business ventures out of fear they might have to leave academia. This hesitation can be a significant roadblock to the commercialisation of those ideas.
To address this challenge, Latvia has developed the Commercialisation Reactor – a platform that brings together scientists and entrepreneurs to co-create deep tech startups. The entrepreneurs lead the business while the scientists focus on their core competencies to develop products or services.
In Estonia, the University of Tartu has created UniTartu Ventures, which simplifies the journey from research to market by offering mentorship, strategies for protecting IP, and support in preparing for investment.
Another example can be found in Lithuania, where the Baltic Sandbox operates an incubation programme that provides grants to talent with a scientific background to support the development of their business projects. It also invites them to participate in a seven week fast-track MBA programme focused on creating a venture-grade startup.
You can learn more about this topic via the FINEST SCALEUP Digital Platform. The platform is free and, once registered, you will have access to a wealth of best practices, exclusive interviews, our deal room database and much, much more.
