25 Sep An Investor’s Journey To Future Science And Technology
Venture capital is booming again. VCs invested a total of $48 billion last year — the highest amount in a decade. The lion’s share went to software, which attracted $19.8 billion, versus just $6 billion for biotech. There are many reasons why this is the case, and it’s worth in-depth exploration: Our ability to thrive on planet Earth depends on our ability to make continued scientific breakthroughs that will enable us to pursue the best opportunities and solve many of our most vexing challenges.
Over the years, investors in software and related industries have built not only the expertise, but also elaborate modeling schemes, to mitigate risks and optimize returns. Conversely, the majority of the world’s wealth is maintained by those without scientific expertise, and even those who do have the expertise have lacked mature investing playbooks to assist in high-quality decision analysis.
So for an investor wanting to fund more science endeavors, staring at a highly technical proposal for some promising-looking company can feel like trying to summit a daunting mountain while more accessible ascents are all around you. As an investor without a science background who recently started a $100-million fund for breakthrough technologies, I wanted to find a way to change this for both our fund and then for others.
We wanted a systematic method for evaluating science-based efforts, guided not only by instincts but also by realistic prospects of getting a desirable return. The goal was to find a way to write a new playbook, a guidebook — one that would enable others to start the journey with us and/or try to improve their own journey.
With a team comprised of Ph.D. scientists in biology and computation, as well as experts in finance, engineering and philosophy, we sought to create a modeling process that would help de-risk our investments and minimize personal biases.