276. How This Engineer Turned Deeptech Early Stage Investor Invests w/ Rubina Singh | Foresight

0:00Amardeep Parmar:So great to have you on Rubina. And it's been a long time coming. We've known each other for a few years now, right? So for the audience, can you tell them what you invested? Right. I'm a deep tech investor at Foresight and basically invest in early stage deep tech versus hardware and software. And by early, we mean late TVZ. And within deep tech, we're sector agnostic. But just to define or at least share our definition of deep tech, it's basically companies with significant technological advancement or scientific breakthroughs that can make things X times better, faster, cheaper. I remember a couple of years ago, deep tech became the next big thing.

0:36Amardeep Parmar:Everybody said they were deep tech, right? But then you've got experience and your background means that you've had that scientific experience and you've worked in those kind of different industries before as well. Can you tell us what made you go into VC and what made you start to look at investing? Sure. So I started off as an engineer and that's where my background is. So I started off as an electronics and sustainable systems engineer. and at that point sustainability was a new world um and i was just fascinated by it so started decided to do that degree at my university and after i graduated i basically worked with my professor on commercializing these new solar cells that have been invented at a university and that was my first um interaction with deep tech without actually knowing the word deep tech because it was an invention with significant ip our first contract was selling it to the Australian Department of Defense to integrate flexible solar cells into the soldiers' uniforms.

1:30And it was just this fascinating world. So that's how I realized that I just love technologies, technologies like solar panels, which could change the world by providing good green power. And then I did my master's in engineering, started working at a world-leading organization called Fraunhofer as an engineer. While working there, I was based in Boston and I worked, a lot of my work ended up being with startups or technology spinning out of MIT and Harvard. Incredible technologies, incredibly brilliant people, and then just wouldn't be able to get funding. And it would fall into what we call the value of that.

2:05And as an engineer, I'm like, this is incredible technology. What is happening? I don't quite understand. And I think for me, a bit of that light bulb moment came when I was at conference. I'm at Algor. And there were two things that were discussed. The one is great technology doesn't translate to great product unless you have a market and understand what your customers want. And the second was that for sustainability to be sustainable, you need to do well while doing good. So for me, it was like, how can I help companies work with that? And then at my organization, at the point we launched, it was basically, the idea was to launch on something called VC as a service, that there were investors who want to invest in clean tech and deep tech without having the expertise.

2:45We had the expertise. So almost accidentally started working with VCs and became one myself and decided that actually, this is what I really want to do. And this is what gets me excited. So that was when I was in the US and then came to the UK after that, moved to the UK, which was a bit interesting because I had no network, had no access to the venture capital ecosystem in the UK, which is so different from the US and didn't even know how to get in. At that point, Centrica happens, ended up joining the corporate world, which again, was an incredible experience because basically ended up working with companies they had invested and acquired and then taking these products to the market, launching five different products across eight different geographies.

3:29I really learned what it takes to actually sell, commercialize and sell and scale it, but then realized that eventually at the end of the day, I lost startups and entrepreneurs and working with them. So then moved into VC full time around three years ago.

3:44Amardeep Parmar:And you mentioned there about how different it's been since you moved to the UK. Yeah. Can you tell us about that? Like, what do you like about the system here? And what do you wish that we had from what you had in the US? I guess, so there are just fundamental differences. I think the origin stories are so different. So in the US, the VC ecosystem almost came from Silicon Valley, right? It came from the engineers, from the product managers, and then those then become the VCs. In the UK, my understanding is it came from the finance sector. And now there are the operators and entrepreneurs coming in and it's becoming a bit more diverse from that point of view.

4:17What I do like about the UK system and especially the DeepLex system is the incredible university base because you are seeing some of the most advanced technologies. It's almost like having front row seats to what the future could be and how the future is being built. So anything from technologies that are helping us see better in space to technologies that can make IVF half times like half the course you see a breadth of it and that's what gets me excited I think we just have such a strong technology good background and such good scientific base here and you said as well how

4:53Amardeep Parmar:at the beginning you're really excited by the technology and like what it could potentially do how now when you're looking at investment of it you're trying to work out can this be commercialized and is this a good investment and yeah how do you try and figure that out So that's a good question. There are a few different things we do. So one is we do look for a bit of traction. What we often see is a great technology looking for a problem to solve. What we don't see as often, but like seeing is a clear solution to a problem in the market. So that's something we look for. Is this a product that is clearly, that understands the market is trying to serve, that clearly understands the challenges there?

5:32And obviously it depends, right? What stage the company is at? Early stage is you won't have all the answers, but we will look for signs of initial commercial traction. We'll look for signs for market dynamics and how the market is evolving. And ultimately, it also comes to the founders and their ability, because markets can change at any point, right? Their ability to pivot and how they're thinking about it and how customer focused they are. So those are some of the aspects we look for.

5:58Amardeep Parmar:So one thing I have a lot as well, so I think a lot of startup advice is generally based towards like SaaS founders, right? And the way that you raise for a SaaS startup or the kind of pathway there will be for that is very different to a deep tech startup. And for those deep tech founders out there who maybe all the advice they get is more for SaaS founders. What do you think that you sometimes see where they're getting advice which maybe doesn't really meet their needs? And how should deep tech founders maybe think differently to other startup founders? So I think with deep tech, again, it depends if it's hardware-based, software-based or combination.

6:33But often there is an element of hardware and often it just takes a bit longer to take it to the market. But interestingly, what we're seeing, and it depends on the sector. So, for example, there's certain sectors, I will not talk about AI because you could spend the entire time talking about AI. But certain sectors around defense and security where there are geopolitical tailwinds, right? there's a lot behind the sectors. And we're seeing, in some cases, technology spinning out of university with the right leadership, already getting proof of concepts, trials with players, generating those early revenues with an MVP before they spend millions in terms of going and creating an actual product.

7:14And I kind of like that. And I think that would be my advice to Deep Tech founders. Do you really need to wait until you have a product? What is the basic, basic MVP at which you could potentially try and show your value, even if it's bringing off the shelf companies together a bit and demonstrating customers, demonstrating that customer traction. And based on the back of that, that it would also make a much more credible case to then go and get further funding, go and get support. The other thing which I quite like about the UK, and this might be more prominent in the Golden Triangle, but there are excited, successful founders, the likes of Exxon, who are available as mentors and advisors.

7:56And I feel it helps companies with their ambition with the new technology to pair it with someone who's almost been there, done that, and basically help avoid some of the mistakes and help you navigate it a bit more.

8:08Amardeep Parmar:And because you mentioned that AI is where, we won't get into that because it's such a huge area. But other than AI, where are you also seeing there being a lot of opportunity right now in like your sector? So you're looking at where are specific things where you think they could be really right for innovation right now? Yeah. So AI and the intersection of multiple sectors, yes. But besides that, a couple of sectors I'm quite excited by. So we're seeing quite a bit happening around defense, security, resilience. And just in sectors, it touches the board because to an extent, it touches on energy.

8:41To a large extent, interestingly, it's touching on space, which I didn't think I would be as excited about as I am now, on telecommunication. So we're seeing quite a bit there. then there's semiconductors which there's quite a bit of activity as well and in healthcare and life sciences but I think from my point of view where I'm focusing quite a bit and seeing quite a bit is defence, security, robotics and then the intersections with other sectors

9:09Amardeep Parmar:And you mentioned that golden triangle how are you trying to find these startups where, because obviously because you're investing not at the very beginning and not the very first check how are you keeping tabs on be potentially an interesting investment down the line. Where are you looking for that? Everywhere. Yeah. So the three ways I do it. So one is stay in touch with the university ecosystems. It is a bit hard, like you said, especially after the ball is spun out, I mean, there are a little later stage at the stage we come in at. But we try to stay in touch with university ecosystems to try and find out.

9:41The second one is through co-investors. In deep tech, we like to syndicate because there's probably a lot more capital that will be required down the road, so through co-investors. And then thirdly, it's also through competitions, through ecosystems where you can see startups. And finally, in a previous life, I have launched an accelerator for preceded startups. I've also worked with European Innovation Council. So as startups mature and calm, we like to stay in touch and then see if that could be a fit for a strategy as well.

10:10Amardeep Parmar:So I was teaching at Imperial on Monday and it was the chemistry PhDs. and one of the questions I was getting was okay so they know their science well but they're trying to decide like okay how would I find other co-founders to help me build this and like being from that engineering background yourself originally and being from those different areas how do you advise like people who've got the idea they've got the technology they've got those that area nailed how should they go about finding co-founders and when you see you must obviously come across some founders like that maybe don't have that commercial expertise how do you advise and try and find something you can trust to work with?

10:47That's a good point you mentioned around trust. I'll come back to that. So I think the more obvious answer would be there are actually programs which match your way co-founders. We know some of the popular ones. There are now business schools that are setting up programs as well with the match your way co-founders. I would say that one of the most important decisions you make is a virtue co-founder. And often a lot of companies don't succeed, not because they didn't get the market right as that, but it was because of the team dynamics. So it is so, so important. So my suggestion would be, obviously it's easier to say than do, but to the extent possible, work with someone you've worked with before or, and maybe try to make it as frank to begin with, like set up check-ins, but basically create an open space that both founders are able to speak with each other and communicate any frustrations because there will be many.

11:41but my advice would be do next when possible work with someone you've worked with before in some

11:46Amardeep Parmar:capacity or the other hello hello quick interruption to let you know a bit more about bay hq we're the community for high growth asian heritage entrepreneurs operators and investors in the uk you can join us totally free at thebayhq.com forward slash join there you'll get our CEO structure in your inbox every week which is content events and opportunities. You can also get access to our free startup fundamentals course by joining. Let's get back to the show. And we talked about this before as well where before you came on air about how for you as well is part of it is that you've got to try and win the best deals right.

12:27Amardeep Parmar:So obviously amongst different venture capitalists the very best deals everybody's going to know about them. Yeah. And then you're trying to get in and have your allocation. And as you said, you're allowed to syndicate because you can work with each other as well. But with the VCO workroom now, what's your advantage? What makes people the best founders who want to work with you guys? Yeah. So I think there are two elements to it. So one is selling my fund and why would you want to work with that fund? But ultimately, because it's so personal, it's also selling yourself and why would you want to work with us?

12:58And especially because we take more seats, right? So why would you want me on your board?

13:02Amardeep Parmar:What's that one else? And I think on one side, Foresight has a 40-year history. We've invested 250 companies. We have capital to deploy and have a traffic order following up and supporting our companies. And not just capital, but we have a strong network of chairs and nets. So we can bring in the support external and the people to really build the company. And in a lot of cases, to see them through as they progress. And I think that is a bit of an attraction. And on the personal side, I think, in a way, having a deep tech background, actually being an engineer who understands the tech in a lot of cases has, having worked in the industry, having faced some of the challenges and also successes of actually scaling and selling products helps.

13:51But ultimately, I would like to think that being someone who's there as an investor, but also there as a shoulder to ground when you need it, because it happens sometimes, probably helps.

14:02Amardeep Parmar:and obviously it's taken me a long time to come to the podcast but then we've been friends for a long time right so then on that front if anybody's looking for investment and it's like oh should I go between you and somebody else I mean like well that is there right so there's your lid plug so on that on that side as well like what are some of the things you've done in the last couple of years that you've really enjoyed you've got different parts of the process you're involved in so sourcing and then closing a deal and then supporting people in their portfolio what part of their journeys, the bit that you personally enjoy the most?

14:31I do. So for me, I get excited about the tech, but ultimately I think it's about the people as well. So I want to work with founders and I'm genuinely excited that whether the tech works or not, these are the women and men who are going to figure it out. I think one of my favorite parts, as I mentioned, is like we see hundreds of companies we'll end up investing in four or five. It doesn't mean that others aren't good, right? Some of those others would be fantastic but it's how you're literally my job is to meet brilliant people and learn from them and actually get paid to do it so i i do love that how you're constantly learning and constantly seeing how the world could change tomorrow to the founders the other aspect i like is because we take both season we get actively involved but we also come in quite early it's the the chance to to an extent help build the company and especially help build and strengthen in the team.

15:22So I quite enjoy that. Yeah, those are the two main ones.

15:27Amardeep Parmar:Helping people go over the team as well, how do you think about that? How are you getting the right team members as part of these startups you're backing? Yeah. Where do you find the talent? So it depends. Okay. And it comes back to the question about deep tech. Often, often the founders are brilliant in terms of technology. Some of them will become great CEOs, some may not some become great CTOs so then it's also about understanding where they are in the journey it'll be a bit different for companies at C stage versus series A or B basically having honest assessment of where skills gaps are but also where they will see themselves so sometimes we see very technical founders evolve in the CEO role and often they're actually very happy being a CTO or CSO and bringing in other CEOs so it's helping understand where the skills that the company bring where they're headed what's missing and then leveraging our network and ecosystems to help fix those um oh not fix those but basically help strengthen the team we have a good network of chairs and nets and i know julie's kind of divide on this but believe that bringing in a strong chair on it early on can help the team so that is something that we quite actively do as well so you've set my next question for you there so you said it's controversial about having a strong chair on it.

16:44Amardeep Parmar:Why do you think that it's good to have somebody early on there? Why do I think it's good to have somebody? Yeah, because you said it's controversial. So what's the different arguments? Yeah. Yeah, for two reasons. So one is often we work with first-time founders, right? And there are things you know you don't know. And having someone who has had a large amount of experience and expertise can help you address that, can help bring the resources or support needed to address that. Then second is you don't know what you don't know. And that happens too. And I think a lot. And I think all of us, and it happens to all of us.

17:17And again, someone who's been there, done that, can help identify those issues or those concerns and help just build a bit better to begin with. Because in a way, they've been there, they've seen that. We don't have enough time to mistake and or enough capital to make all the mistakes that need to be made. So why not learn from someone else's mistakes? So that's our rationale for bringing in strong shares and as early on.

17:40Amardeep Parmar:And you said how you see so many brilliant founders all the time but you could only invest in a few. Of those people, just the message, right? So the people who, if you look at 100 and invest in four or five or however it works, who are those people who are just outside and what is it that people listening right now could maybe work on in themselves or work on in their companies to get themselves, they are ready to take that extra little step where they'll be ready for you. Yeah. So for us, because there are two elements to it, as a deep tech investor, ultimately there needs to be deep tech. So there could be brilliant founders who just aren't working on technologies or it doesn't fit our strategy and our thesis, in which case, unfortunately, it won't work.

18:21but there are aspects where it's an interesting question where a founder can grow into the role or there might be elements in which case we would stay in touch to the extent possible it's not always possible but where we can we do try to provide feedback and then basically catch up in the next few months to see and then that has happened before and that's what we've seen where we've given feedback again it's just our humble feedback but then founders have actually taken it come back a few months later and be like, you told me this, this is what I worked on. And I think that itself is such a big sign of someone who's willing to listen, who's willing to take into account and come back and like, you asked for this, I've delivered it, now what?

19:04And we have ended up investing in people like that. But ultimately, there's so much that goes into decision making. I won't take it personally as a founder because often it has a lot to do with many different aspects than just a great team.

19:20Amardeep Parmar:Could you share an example of one of the investments you made in the past that you're really proud of that you can give that story of why you picked them at the beginning maybe when other people wouldn't believe in them or didn't believe in them yet and how you've been proven right or you feel quite validated by that choice you made? One of the investments I'm most excited about is a recent one actually so it's not been that long gave us earlier this year. It's a company called SpaceLox, where basically they're using ground-based sensors to provide an AI systems to provide real-time surveillance or space, whether satellites or different types of objects belonging to different countries.

19:58What I love about the team is very execution-focused founders who, within three years of signing the company, are already a couple of million in revenue. The other thing I love about the team is that irrespective whether we believe or not, they believe in themselves. And I love that because I think you need that because so much will happen. Things can go wrong. Like right now, things are in your favor. But that belief in yourself and the ability to just keep going. So those are a couple of aspects I'm quite excited about. And also, it's a great tech.

20:29Amardeep Parmar:And you said we've been about three years you've been in the UK, right? No, three years. Back in BC. Yeah. So how have you seen the ecosystem change over that period? And what do you think is coming soon in terms of how the deep taking system is going to change? What I've seen, and maybe it might be easy for me to say this now that I am more on the inside, but I think there is a bit of shift in terms of the system just becoming a bit more diverse. So as I was saying earlier, a lot of it might have stemmed from the finance sector, but there's this understanding that the strongest investors of the teams also have operators, also people from industry, entrepreneurs, doctors and lawyers as well.

21:08So I'm seeing a bit of a shift, especially on the deep tech side, I think there's a lot more technical expertise coming in. The other shift that I'm seeing is also the non-traditional venture funds being raised. So it's not the big established companies who are then going and continuing to raise funds. It is also emerging managers. It's community-centric founders like yourselves going and successfully raising funds. And in a way, I think by that happening, a lot of that I saw in the US. So I think it's becoming a more globalized system where countries are learning from each other. And why shouldn't they?

21:48Amardeep Parmar:And so what we do is, I'll say in 200 episodes time, if we get you back on again, has about two years time, we'll have a little TV up here. And it will say like, what today do you think that in two years time, we could come back on and be like, this is what I've achieved in the last two years. This is something which you'd be really proud of. what would you like to set yourself as a little target to compare yourself to in two years time that's a good question so i i think two things one i would have wanted to say even if it's one company ideally many that i've backed this company that is literally changing the world and making it a better place the other thing i would want to say is that at least half of the companies i invested in had female founders.