How Pasteur's 19th century modus operandi is helping VCs take big bets
Pasteur's Quadrant is a framework venture capitalists use to assess the potential of startups.
Developed by Donald Stokes, it categorizes research into four types:
1️⃣Pure Basic research (Bohr's Quadrant) - purely focused on fundamental understanding (Bohr's atomic model)
2️⃣Pure Applied research (Edison's Quadrant) - purely focused on practical application-inspired work (Edison's Menlo Park experiences)
3️⃣Use-inspired Basic research (Pasteur's Quadrant) - seeks fundamental understanding and practical application (Pasteur's work on microbiology and immunology)
4️⃣Basic applied research
Most promising startups sit in Pasteur's Quadrant, where they focus on fundamental scientific understanding and considerations of use.
When evaluating investment opportunities, VCs look for the following signals that a startup resides in Pasteur's Quadrant:
1️⃣ Does it have strong scientific research validating its technology?
2️⃣ Does the innovation address commercially essential problems?
3️⃣ Can the startup translate its tech into real-world solutions?
4️⃣ Is the work grounded in advancing fundamental understanding?
Startups in Pasteur's Quadrant balance scientific rigor with market impact and aim to propel scientific progress while solving actual issues that customers value. Their breakthroughs often lead to entirely new products and markets.
A few examples come to mind:
▶Moderna - Developed a new mRNA technology platform for therapeutics and vaccines. Propelled mRNA science while addressing major health needs
▶Tesla - Pushed boundaries of battery research and electric vehicles. Accelerated electric vehicle adoption through engineering and design innovations
▶NVIDIA - Combined fundamental insights into computer architecture with practical applications to improve gaming, data centers, and AI research
Of course, uncertainties remain with early-stage ventures. VCs must provide their expertise to guide these startups from lab to market. Funding these high-potential companies is vital for progressing entire industries and meeting human needs.
Some fascinating startups from today's landscape include:
▶Seaborg Technologies: A company that develops modular floating nuclear power plants powered by compact molten salt reactors, a decades-old technology
▶Boom Supersonic: A company that develops supersonic planes using only technologies with known certification paths and proven safety
▶VECROS: A company that is building a new standard for autonomous inspections using computer vision, edge computing, and drones that centralize planning, execution, and analysis of fault reporting for enterprises
By balancing rigorous science with considerations of applications, startups in spheres like AI, biotech, advanced materials, and photonics are poised to power transformative innovations that elevate both business and society.
What are other frameworks to evaluate Deep-Tech Startups?
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