Boffin VCs
Europe has science on the mind. More and more of the startups dropping into Sifted’s inbox are working on solutions that require proper brain power — like combining GenAI and quantum to design new drugs, making drug manufacturing greener and autonomous factories to make everything from rollercoaster wheels to rocket engines.
Universities in Europe are also stepping up efforts to promote tech transfer and get more ideas from the lab to the market. Spinout activity is hot in areas of the UK like Cambridge, Manchester and Bristol — in Europe, institutions like Switzerland’s ETH Zurich and Germany’s Technical University of Munich are doing good work.
There’s also a handful of focused accelerators for entrepreneurial PhD and PostDoc students looking to get the filaments of an idea out of their mind and into the real world — including the UK’s Conception X and the University of Edinburgh’s PhD Max programme.
But there seems to be a snag holding back some academic founders. Do the rounds at any deeptech conference in Europe and you’ll inevitably come across someone complaining about an insufficient number of VCs with a background in science or technology who can do proper due diligence on startups working on deep science.
That got me thinking: should those same universities also be training the next generation of deeptech investors?
“There’s no reason why universities shouldn’t be running programmes or training courses that enable scientists to become investors or develop their knowledge of investment,” says Ben Mumby-Croft, director of entrepreneurship at Imperial College London. This would be the “logical next step” to their efforts to promote tech transfer, he adds.
But some are concerned about a lack of incentive. If you’re an academic founder and you create a startup, you have a job. If you were to come out the other side of a university VC training programme you get thrown into an unruly jobs market with no guarantee of work.
That’s one of the reasons universities aren’t playing a more active role in this, argues Nikita Thakrar, CEO of Included VC, which offers 5-month fellowship courses on VC investment. The return on investment doesn’t persuade them.
To get them on board, says Thakrar, VC firms would need to guarantee there would be jobs waiting for STEM graduates who finish the course. “I do think universities have a part to play but I believe it has to be a private-public partnership, and I think VC funds have to be involved,” she says.
Thakrar suggests creating new roles within a firm — something akin to a research VC, responsible for building a deeptech network. “You could get 5 to 10 VCs in Europe to come together as a consortium and say, ‘we are going to pick five universities in Europe and we are all going to teach VC’, universities bear most of the costs and then the firms hire all of them,” she says.
Such a course could last between 8 and 10 weeks and train about 10 people in each quarter — creating a pipeline of 40 new deeptech VCs per year.
But not everybody’s convinced it’d work; some people I spoke to are against the idea of STEM graduates following a career in VC investment right after university.
Focusing on turning academics into VC investors before they have tried their hand at entrepreneurship would result in VCs with less empathy, argues Eleanor Kaye, executive director of the Newton programme, an executive education course for the venture capital industry aimed at getting under-represented groups into the sector.
“An investor who’s previously been a founder understands the reality of milestone setting, IP creation, they can read lab results, they understand about due diligence, but more importantly they have empathy with the founder on what work has gone into that discovery or new innovative idea and can provide real founding support,” she says.
But what about her own programme, whose last cohort included 48% of alumni with STEM backgrounds? She argues that Newton students get “the spirit of variety of thought plus VC training, without learning in a silo of being just scientists.”
Having spent years in a previous professional life meeting scientists who neither wanted to stay in academia nor had a great innovative idea to commercialise, I can’t help but wonder whether widening their career options wouldn’t be beneficial.
What do you think? Should we train scientists to become VCs? Would this help European tech? What else is missing? I want to hear from you. Email me.
— Cristina Gallardo, senior Iberia and deeptech correspondent
