Fundraising for a robotics startup is more challenging than for other start-ups others such as a software app company for multiple reasons. This requires founders of robotics startup to understand how venture capital firms and corporate ventures evaluate robotics companies and make their investment decisions. It is a process and a mindset that starts from forming the team, building the traction, developing the pitch, targeting investors to signing term sheets.
MassRobotics hosts bi-annual Demo Days. This is an opportunity for our resident startups to meet with potential investors and our partners. To help prepare the startups for this event in April, we hosted a virtual event and invited two established investors in robotics and deep tech spaces to share their thoughts around what they are looking for in a startup to feel comfortable investing in them. MassRobotics co-founder and Vice President for strategic partnerships, Fady Saad, hosted Lidiya Dervisheva, partner at Next47 (Siemens venture arm), and Bilal Zuberi, partner at Lux Capital, for an interactive discussion and Q&A session with audience participants.
Lidiya shared with the audience that Next47 is a $1.2 billion funds committed by Siemens to invest in the B2B space from the enterprise space to industrial tech and deep tech. They typically invest in companies seeking series A to C. They lead deals and invest across three geographies: North America, Europe and Israel. Lidiya spends her time examining industries like logistics and supply chain, robotics, transportation, mobility, energy, smart buildings and proptech.
Bilal shared that he has been in venture capital now for 13 years. Lux Capital is a multi-stage, bi-coastal firm, managing about $2.5 billion and has about 150 portfolio companies. They invest in deep tech, addressing large societal challenges that can lead to large markets creating very large companies.
The discussion focused around how VC firms and corporate ventures work and what they are typically looking for when they evaluate a company in terms of return multiples and timeline to realize that return. The panelists discussed the unique stages of funding and the standard milestones and expectations that VCs look for. They highlighted the available different funding models from the no-equity federal government grants to debt financing to equity and customer financing.
Bilal underscored the value of the narrative and storytelling and that fact that some founders can raise funding on a PowerPoint while others with active pilots cannot. He also advised that CEO need to learn how to fundraise or bring on someone who can help in fundraising.
Lidiya emphasized the importance of diversity and inclusion both in robotics and investment. As one of the few female investors in robotics, she reiterated the importance to have more females and people of color into the space.
During the engaging discussion, dozens of questions were answered thru the live Q&A session. The response to the event was very positive and many viewers indicating it was helpful as they prepare to fundraise. If you missed the event, you can view it here.
Keep posted for a future “Part 2” of this ongoing important and much-needed discussion.