Although funding in deep tech has significantly increased over the last years, founders of deep tech startups are still struggling to raise funding in the early stages. We have prepared a guide to help founders avoid the most common mistakes.
Deep tech startups address the most urgent challenges of our time by combining advanced technologies, scientific research, and a problem-oriented focus. Even though deep tech has emerged as an extremely promising investment opportunity, it is also riskier and requires more capital than conventional venture capital. At Strata & FundingTrip, we have prepared a white paper to discuss the process of funding deep tech companies and suggest the best practices to avoid common pitfalls.
What are 5 common mistakes when raising funding?
- Overuse of technical slang: Many deep tech entrepreneurs misuse technical terms and slang, making it very challenging for investors and funding agencies to understand the value proposition of their technologies.
- Focusing too much on the product: Investors and funding agencies invest in businesses, not in technology. Even if a business’ main competitive advantage lies in technology, there are other aspects that should also be considered.
- Underestimating the time-to-market: Deep tech startups typically require long development, testing, and validation cycles. Disruptive technologies carry higher risks than well-tested areas, so bringing on the first client is also harder.
- Competition is not thoroughly assessed: Every pitch and presentation must include a competition analysis. Many deep tech founders disregard this fundamental piece of information or, even worse, have a limited understanding of the competition landscape.
- Traction is not clearly presented: Many investors receive hundreds and even thousands of funding proposals and pitch decks. The first thing they will do is check traction. Many entrepreneurs are seeking funding, but have very limited track records. Additionally, there are many decks with tens of partnership logos that lack a meaningful explanation.
Do you want to know more? Download the white paper by adding your email in the box below.
White paper contents
- Fundraising in deep tech
- Types of funding
- Biggest funds and investors
- Mistakes and challenges
- Best practices and advice from founders