Over the last 5 to 7 years, we have seen more and more startups that have defined their ambition based on an earlier exit point as compared to most Deep-Tech startups.
Rather than setting their ambition goals on a certain market share and a revenue target, they set their ambition on being high-volume (HV) ready and, at that point, find a suitable “mothership”. There are several reasons why this strategy is seeing more adopters. Most important is the lengthy path for a Deep-Tech startup to reach that “market share” objective. That path might take 8-10 and sometimes 12 years with a high number of venture rounds which dilutes their original ownership to a thin percentage. Markets might change, the venture capital scene might change, etc. Therefore, planning for a 3-5 year path to bring a product to the high-volume marker and at the same time looking for a suitable acquirer where the product would fit with the acquirer’s marketing and sales organization not only secures a much faster exit but also a more secure one. Despite the obvious lower valuation, founders hold a much larger percentage of the company’s outstanding share capital.
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For most deep-tech entrepreneurs, a familiar fact: a deep-tech startup takes longer to commercialize than regular software-based and/or SaaS-based startups. The gap between proof of concept and actual revenue takes longer. The following graph provides some insight into why things take longer.
The TD Shepherd team is happy to congratulate the Qualinx B.V. team on successfully raising €20 million from Dutch investors. TD Shepherd has provided strategic support to Qualinx over the years (starting in 2018), witnessing each step of their journey; their growth and success, makes us truly proud of their outstanding achievements.
If there’s one thing we’ve learned about surviving the Valley of Death in deep tech, it’s this: don’t go it alone. This stage is all about leveraging relationships, and corporate partnerships can be your most valuable lifeline. The key is to think beyond customers.