Announcing TechU Fund I

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I am happy to share that TechU raised our first dedicated $10M venture capital fund this past week. We plan to use the capital to continue supporting deeptech entrepreneurs across the globe. Since 2014 we have helped entrepreneurs get started and have seen them build foundational companies that have already made serious impact and will continue to transform the world. These include companies like Bevi, LedgerX, Accion Systems, Ayar Labs, Multiply Labs, ReviveMed, and RemoteHQ. We now have a bit more money to support more entrepreneurs and do it on a larger scale.

I would like to thank our LPs for their strong support and for their good vibes. We are fortunate to be backed by smart-money investors, over 40% of whom are entrepreneurs with at least one successful exit of $100M (or more), 88% of whom held high C-level positions at major organizations, and 95% of whom are serial angel/seed investors.

I would be remiss if I did not mention the support of our Venture Partners Sonny, Alexander, and Srid who continue to serve as trusted advisors to myself and our portfolio companies, and who bring tremendous insights to our weekly discussions.

If you or any of your friends/colleagues are working on a deeptech startup or idea that fits our thesis, I would encourage you to reach out – contact@techuventures.com

Time to get to work.

TechU Investment Thesis

natanel

Patient seed capital focused on supporting effective entrepreneurs building deep-technology platforms that create an unfair advantage (“secret sauce”) and serve as the bedrock for foundational companies that will transform markets and industries.

TechU Dictionary

  • Patient – we expect it will take 7-10 years to fully build your company to a successful outcome. We will be your partners for the long haul and expect you to be fully committed.
  • Seed – pre-seed, seed, Pre-A (and whatever new term they will come up with over the next few years)
  • Effective entrepreneurs – not only work hard, but work smart. Get things done and exhibit an ability to lead others effectively and sell your vision to key stakeholders.
  • Deep-technology – one that is difficult to build, whose knowledge is possessed by a limited few, and will not be easily replicated.
  • Platforms – hardware, software, both, or something else.
  • Secret sauce – the nature of the tech combined with the knowledge of the entrepreneurs means others will have a hard time competing.
  • Foundational companies – those that are meaningful, provide value to their customers and society, and forever change the way things get done.

It’s important to note that we are not looking to focus on opportunities that are hot today, but focused on identifying entrepreneurs who have a strong vision of where the world will be 5 to 10 years from now. If you are building a deep-tech platform, have a strong team, operating in a growing market, and possess an informed opinion that goes against the grain, we want to hear from you and learn from your experience.

Our current checks range in size from $250K to $2.0M per opportunity and we are investing out of an active fund (closed Q2 2019) and other vehicles. Please reach out and let’s get the conversation started – contact@techuventures.com

Ayar Labs – kicking butt

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I’m very proud of our portfolio company Ayar Labs, and founders Alex, Mark, and Chen who have recently closed a massive $24M Series A round led by Playground Group, Intel Capital, GlobalFoundries, and FoundersFund. TechU participated in the initial seed round back in 2016 and also in this round earlier in the summer. Glad this finally closed so we can announce it. The company is at the forefront of building optical chips which will allow data centers to operate at the speed-of-light end-to-end. Their technology will change the world, but it’s only at the beginning. Up-up-and-away!

Optical Chip Startup Ayar Labs Raises $24 Million To Boost Data Speeds

Ayar Labs has a chip solution for data centers that boosts performance while dramatically cutting energy costs. They just raised $24 million to scale it.


Bloomberg Businessweek feature of Accion Systems: The little ion engine that could

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Our portfolio company Accion Systems has largely turned into the top Boston based startup in the space space (pun intended) over the last couple of years. Their ion based propulsion technology, which is the size of a nickel and was developed at Paulo Lozano’s Lab at the Space Propulsion Laboratory at MIT, enables small satellites to orbit the earth for years at a time. Its founder and CEO, Natalya Bailey, was recently profiled in Bloomberg Businessweek with an article and brief video discussing their technology and its significance to the market. It is highly informative and I have included the link below. TECHU is a repeat investor and we (as well as many others) are very excited about their future.

Ion Engine Startup Wants to Change the Economics of Earth Orbit

There’s a sweet spot about 22,000 miles above the planet. Only in this narrow band of space can an object achieve geosynchronous orbit, moving at the same speed as Earth’s rotation and staying fixed above one point on the surface. It’s beachfront real estate in the void.

Video: The state of deep tech in 2018

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I was recently invited to participate on a panel on the deep tech ecosystem hosted by BostInno at Analog Devices together with Leila Pirhaji of ReviveMed (a TechU portfolio company), Patrick O’Dougherty of Analog Garage, Matt Duffy of Climacell, and Jason Whaley of Rhapsody Venture Partners.

The event was attended by many local deep tech entrepreneurs from the Boston community and brought out some interesting discussion points.

Some of the topics I elaborated on include:

  1. Intro to TechU and our deep tech focus (1:50)
  2. How we determine the value of the deep tech component of a startup and how entrepreneurs should communicate the value of their technology to investors (7:43)
  3. The importance of entrepreneurs testing the value of their technology with potential customers before pitching potential investors (13:54)
  4. Describing the investors’ role of guiding the startups that they fund. Difference between advice and an order. (24.42)
  5. The role of buzzwords in communicating your startup is trumped by the importance of having a secret sauce (32:33)

I welcome your thoughts and feedback.

TechU Ventures 2018 Investment Thesis

natanel

2018 Thesis:

Patient, experienced early-stage capital focused on supporting category-defining teams building deep-technology platforms that will transform high-growth markets and create new business models.

In prior years, I took the opportunity to add focus markets that we will be targeting in the year ahead. I have decided to forgo that for the foreseeable future. In 2014 when we started our firm, we were at the forefront of investing in deep-tech startups (before the term “deep-tech” became a thing). We invested in space, blockchain platforms, IoT, artificial intelligence way before these areas heated up. We are not looking to focus on what’s hot today, but where the world will be 5 to 10 years from now. If you are building a deep-tech platform, have a strong team, operating in a growing market, and possess an informed opinion that goes against the grain, we want to hear from you and learn from your experience. We are particularly interested in hearing about your secret sauce and why you have an unfair competitive advantage.

Reach out at contact@techuventures.com to share your deck.

TechU Angels 2017 Investment Thesis

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In annual tradition, I am sharing our investment thesis for 2017. I find the process of articulating our thesis allows us to envision the opportunities we find most compelling, and also to communicate in a transparent manner our goals and objectives to entrepreneurs before they reach out so they can assess fit.

Thesis: We invest in hard tech startups led by exceptional founders that solve real problems in key markets.

What it means in more detail:

  • Hard tech – the following TechCrunch article (from Nov 2016) does a great job of explaining hard tech. This has been our focus since we launched and we’ve been doing it way before it became popular. Just look at our portfolio companies if you would like some good examples. I would also add that we typically look to see if your technology incorporates some type of ‘secret sauce.’ What do you know that others don’t and what makes your technology novel and difficult to replicate by others?
  • Exceptional founders – we back folks with visionary leadership tendencies, strong technical expertise, and with an innate ability to attract world class talent to their team. Additionally, they are effective communicators, with high integrity, and culture oriented. We invest in people we like (and who are liked by others) and those who value teamwork and camaraderie.
  • Solve real problems in key markets – your startup needs to be solving a problem that other people or companies are having a hard time grappling with. You need to do it better, faster, and more efficiently than existing solutions and the target market needs to be compelling.

In terms of stage, we have primarily focused on investing at the seed and angel stage which is our sweet spot — although from time-to-time we will consider series A opportunities we find enticing because we really like the founders, feel we can help them in a unique way, or find the opportunity too compelling to pass up.

Some themes that we find exciting in 2017, include (non comprehensive list):

  1. Automation – robotics, artificial intelligence, machine learning, computer vision
  2. Personal healthcare – personalized medicine, supplements, and beauty care
  3. Wearables – performance gear and sensor integrated “smart” clothing and devices
  4. Education – personalized, affordable, scalable education for the masses
  5. IoT – internet connected devices and tools
  6. Financial services -generally openminded about this space
  7. Space technologies – generally openminded about this space
  8. Food tech – tech-enabled synthetic or natural foods which are healthier, more sustainable, and can be mass produced

If you would like to reach out to get the conversation going, I suggest first exploring your network to find common connections who can make a personal introduction. Another viable option is to reach out using our online form: www.techuangels.com/contact. I personally check each submission daily and circle back promptly to provide our assessment about potential next steps.

I’m always happy to receive feedback or learn from others. If there is something you think we missed or can articulate better please let me know. Also feel free to reach out with any questions or any other suggestions.

Back to work!

Welcoming Ayar Labs

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I am happy to introduce our newest portfolio company — Ayar Labs — to the TechU family. We are very excited about this investment, and for the opportunity to partner with Alex, Chen, Mark, and the entire Ayar Labs team.

What they do:
Ayar Labs has developed a proprietary method to integrate optical transceivers into computer chips to enable data to be transmitted using light waves. This process can dramatically boost the efficiency of traditional computing by replacing existing chips which employ traditional copper wires that rely on electricity. By replacing electricity with light, their technology significantly reduces energy costs while increasing bandwidth for customers running wholesale scale data centers or for supercomputers.

Their technology, which has been developed over a decade’s worth of R&D at institutions like MIT, UC Berkeley, and the University of Colorado and with the support of more than $20MM in DARPA grants, has been captured across over 10 different patents.

Why we like them:
Their technology very much fits into our thesis. The company is led by an exceptional team whose domain level expertise is perhaps unparalleled in the industry. Given the proprietary nature of their technology there is also a high barrier-to-entry and they definitely posses a secret sauce which is a prerequisite.

I also personally believe that timing will play a positive role in their potential success. The energy and expense associated with the powering of data centers globally is immense, and I believe many different players in the ecosystem will be strongly aligned in supporting this technology to take hold. Already many of the largest players in the ecosystem have been reaching out to establish partnerships.
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As always, if you or any of your colleagues are in a position to serve as a strategic partner to Ayar Labs, feel free to reach out to me for an introduction to the founders.

Follow on investments

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A big part of our strategy at TechU Angels is to invest in companies early in their lifecycle and continue supporting the founders afterwards in setting their trajectory towards an early sustained path to success. As part of this strategy, we seek pro-rata rights so we can participate in their continued growth throughout their lifecycle.

Over the past few months we’ve had several such examples that we are proud to aknowledge. This includes participating in Bevi’s impressive series A round led by Horizons Ventures and more recently Accion Systems’ robust series A round led by Shasta Ventures. Beyond these milestones, what we are most excited about is seeing our portfolio company founders continually meeting their aggressive growth targets and benchmarks which they set out for themselves.

We are committed to continuing our active support for our portfolio companies and look forward to sharing similar announcements as we grow our firm.

Announcing our investment in WhoKnows

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I’m happy to introduce a new portfolio company to the TechU Angels family. We recently made an investment in WhoKnows, Inc. — we are excited by what they are building, their vision, and the team.

What they do:
WhoKnows is leading the next evolution of enterprise collaboration tools by allowing companies to understand and gain deep insight into the professional relationships and the knowledge base possessed by their employees, information which when shared internally, enables and empowers their employee base to accelerate growth, sales, and product development. They are building the next generation of collaboration software using machine learning and contextual recommendations.

Here’s a quick teaser video:

How it works:
They do this through a proprietary patented discovery platform that, when placed in an office environment, dramatically increases engagement throughout the organization. They can then contextually recommend the right colleague through various plugin tools (Google search, LinkedIn, WhoKnows App, Salesforce, Jive, Quora, Bing, etc.), so employees don’t have to change how they work.

Also, since I know you would ask, setting up the platform only takes a couple of minutes (at the individual user level), so entire multinational corporations can have their entire employee base up and running in less than a few hours.

Chris and the team plan on some exciting updates in the next few months. I’m looking forward to updating everyone in due time. If you’re interested in a demo for your company, let me know and I’ll be glad to connect you.