How would you describe Prime Movers Lab and your investment thesis/guiding principles in one sentence?

Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers – the inventors who transform billions of lives by reinventing energy, transportation, infrastructure, manufacturing, human augmentation, and agriculture.

Can you tell us a bit about yourself, the key partners/experts in the team?

Prior to founding Prime Movers Lab, I served as the Founder and CEO of Tachyus and OpenGov. I founded Prime Movers Lab in 2018 because I recognized there were very few VCs investing in technology that could solve our biggest problems. So many dollars were flowing into software, fintech, and consumer products while only a fraction was being invested in breakthrough science startups. I also wanted to create the type of fund that I wish I had as a founder. 

Since then, we’ve raised more than $1.2bn and invested in over 55 startups that are tackling big problems like closing the digital divide, creating abundant clean energy, and providing mental health treatments. Today, I serve on the boards of Tarana Wireless, Halo, Focused Energy,  Diamond Age,  and Space Perspective.

I’m also a philanthropist through the Sat Chit Ananda Foundation dedicated to delivering food, freedom, and flourishing to our global human family. 

Can you tell us a bit about the fund’s history? 

Prime Movers Lab recently raised $245m for our third early-stage fund (fourth overall fund). The fund brings the firm’s total assets under management to more than $1.2bn. Like our previous early-stage funds, the new investment vehicle is investing in companies tackling the world’s biggest problems across the energy, transportation, infrastructure, manufacturing, human augmentation, and agriculture sectors. 

The firm’s other funds, Prime Movers Lab Fund I (a $100m fund), Prime Movers Lab Fund II, (a $245m fund), and Prime Movers Lab Early-Growth Fund (a $500m fund) have invested in breakout companies like fixed wireless technology provider Tarana Wireless, supersonic aircraft developer Boom Supersonic, commercial spaceflight pioneer Axiom Space, and sustainable satellite network creator E-Space.

Why do you think now is the right moment to launch this fund?

We’re seeing great valuations that many firms are passing on. When most investors are stepping back and not investing, that is the best time to invest. Too many venture capital investors have been chasing Web3 and generative AI startups over the last 18 months, leading to ridiculous valuations. With Prime Movers Lab Fund III, we are focused on partnering with early-stage founders who are building must-have solutions for the world’s biggest problems. An aging population combined with a high demand for sustainable energy is changing the way we live, so we need to invest in solutions to these mission-critical challenges.

What is your unfair advantage? What do you bring besides money?

We pride ourselves on the fact that the least useful thing we provide is capital — and that’s even more true today than when I founded the firm. 

Fundamentally, we don’t think of ourselves as being in the venture capital business. We are in the business of helping founders (particularly serial entrepreneurs) build breakthrough scientific startups to transform billions of lives. One of the services we offer to founders is investing capital to fuel growth, but this is just a small aspect of the relationship.

We believe that if you supercharge the trajectory of a company’s leader, you supercharge the company’s trajectory. That begins with selecting founders that value growth and contribution and then focusing our portfolio support on CEO growth including weekly coaching calls with partners, monthly executive coaching, Robbins Research programming, and quarterly management training sessions. We also provide government relations, communications, creative, and technical support.

We actually roll up our sleeves and work side by side with our founders to help close customers, hire talent, create marketing materials, raise further financing, establish relationships with government officials, execute PR opportunities, and navigate challenging market conditions. In today’s economic climate — these aspects of what we deliver for our founders are more important than ever because most startups are figuring out how to accomplish more with less. 

What do you look for in entrepreneurs? / What will convince you to invest in a company?

We tend to look for serial entrepreneurs looking to make a difference in the world. The founders also need to have a growth mindset. We focus a lot on why they are building their company. We don’t partner with founders who are just looking for a quick acquisition. 

The next thing we look at is the strength of the technical team: We meet critical members of the technical team to learn about their expertise and experiences. We evaluate how that enables the application of the scientific breakthrough, and how committed they are to the mission. 

We also identify what defensible intellectual property exists or is in the process of being created, and how their technology is differentiated from competitors. 

We also want to make sure the timing is right. We want to know: Why is this going to work now vs 3 years ago or 3 years from now? Is it the technical insight? Does something now exist that didn’t before, or is it a change in costs and/or environment? 

Lastly, we make sure the scientific risk has been greatly reduced. We learn what major technical risks have been conquered and what the founders think are the biggest engineering risks remaining.

Can you give examples of companies you previously invested in and why?

We invested in breakout companies like fixed wireless technology provider Tarana Wireless, supersonic aircraft developer Boom Supersonic, commercial spaceflight pioneer Axiom Space, and sustainable satellite network creator E-Space.

What is the best way for founders to approach you and what will convince you to have a first meeting?

Getting a warm intro from a mutual connection always helps. We have done due diligence on almost 10,000 companies and only invested in about 55 companies since the firm was founded but founders should figure out the right partner on our team and see what they are interested in. We publish a lot of white papers, blogs, and podcasts so founders should be able to see if we might be interested.

What is one piece of advice you would give deep tech founders? 

The best founders turn fear into faith and believe that what they are doing will create a better future for all of us. Everyone gets to choose a response to every new swing in the markets, every snag in the product development process, or any other outside stimulus. We can give in to the fear that we all naturally experience, or we can take that energy and build something and contribute to society.

Who are your LPs and how did you convince them to invest their money in deep tech?

Our LPs include an array of high-net-worth individuals, endowments, and family offices that are committed to many of the same causes that we are.

We’ve been successful in raising our four funds by explaining that we are on the verge of a new wave in technology that is driven by massive increases in computational modeling power that allows startups to rapidly iterate in the digital world, reducing cost and time-to-market in the physical world. We also like to highlight the compounding effects of enabling platform technologies like SpaceX’s launch services or declining costs around human genome sequencing that are allowing other companies to get to market faster with less capital.

What do you think will be the next big thing in deep tech? 

Prime Movers Lab is making important investments in fusion energy, next-gen fixed wireless, and many other areas, but I have a particular passion for addressing the mental health pandemic. The investments we’ve made in mental health therapeutics could transform the way we think about mental health and raise human consciousness for all mankind.

What trends are you seeing in the deep tech investment landscape?

Start-up investing is beginning to stabilize after a challenging first half of the year. Seed and Series A markets are open for business and later-stage financing is happening for the best companies, albeit at significantly lower valuations than the peak of the market. It seems that investors and startups have adjusted to new prices and the volume of deals is picking up.