From Bench to Cap Table: A Scientist's View of VC

Transitioning from academia to Venture Capital might seem like a leap across disparate worlds, although in reality, the two share more similarities than one might expect. Scientists’ inherent curiosity, ability to think critically, and methodical approaches to problem solving, are not dissimilar to the qualities and processes that drive investment decisions into deeptech startups. Both realms demand a deep understanding of uncertainty, a critical assessment of data, and a vision for the future. My path from lab-bench-to-cap-table has given me a perspective on how these environments intersect but also on how they diverge.

As an investor, one does not necessarily require technical expertise in every company they back. Much like in academia, what is essential, is to remain open-minded, engage with technical experts, and drive meaningful conversations. The premises of due diligence in VC are at their core scientific; we conduct research, cite our sources, pressure-test our hypotheses as a team, make conclusions, and synthesise information into investment memos. At the primary research stage -my favourite aspect of our job- we engage with key opinion leaders to collect our own data points. The learning curve is continuous and steep, and knowledge exchange is essential. That is where scientific expertise is key, as it enables one to ask the right questions, to pinpoint feasibility, risks, and customers’ real unmet needs. This allows investors to separate products from “nice to have” to absolute “must haves”, with high growth potential. This separation is often not clear from the outset, and requires input from domain experts, end-users, and customers.

While both scientists’ and an investors’ ultimate goals involve driving progress and making a lasting impact, there are some considerable contrasts between the two lines of business. Firstly, academic endeavours aim for knowledge creation, with success measured by the quality and rate of peer-reviewed articles published, whereas VCs strive for value creation, which translates to financial returns for shareholders. Secondly, doctoral scientists acquire hyper-specialisation in their area of research, often to a point where they become the world’s leading expert in that niche. VCs are exposed to a diverse breadth of research, which is both refreshing and challenging, as we are required to adopt more of a generalist’s view, and adapt swiftly across different disciplines. Finally, the pace of work in VC is far more accelerated, with decisions often made with incomplete information. This requires comfort in navigating ambiguity alongside data, a shift from the pure methodical and evidence-driven nature of conducting scientific research.

When it comes to deep tech and life sciences startups, there are a few idiosyncrasies worth mentioning that are central to a company’s success. Firstly, a novel idea or an innovative technology do not always translate into a great product; getting the technology right is only the beginning. If the addressable market is large enough, a unicorn product satisfies customer (or patient) needs, addresses its competition, and complies with a regulatory framework, all of which represent massive parallel hurdles. Secondly, when it comes to founding teams, being a gifted scientist and a capable entrepreneur are skills that rarely go hand in hand. For this, founders’ skill set complementarity early on is vital, as technologies should be developed with the end-user and customer in mind, to avoid running into the risk of building a product looking for a problem to solve.

As a VC looking from the outside-in, in terms of mindset, I have concluded that great scientists and entrepreneurs are optimistic to their core, with a common mission to disrupt their fields and change the world. Here is where I think mindsets diverge; in science, the output of one’s work is often binary, in the sense that an experiment has either failed, or it has succeeded. The experimental hypothesis is either proven, or refuted. Against well-designed experiments, the laws of Nature will always yield the same answer, with human qualities and aspirations having no influence on outcomes, i.e., oil and water simply will not mix, even in the hands of Marie Curie. On the contrary, entrepreneurship is a people-driven line of work, where outcomes on business success are not predetermined by external, unnameable forces. Talented, driven teams have the opportunity to create unimaginable value in people’s lives, and this prospect fuels me with excitement about the world of venture.