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Moats & Multiples in Hardtech with Venture Declassified
This one is a crossover. Grant sat down with the team behind Venture Declassified, a podcast about what it actually takes to invest as an angel, for a freewheeling conversation about how hard tech companies get evaluated differently from software at the earliest stages. Grant plays the founder in the room and asks three active investors, Jacob Schpok (Elevate Ventures), Mike Kelly (Start Something Ventures), and Ben Pidgeon (VisionTech), to tell him what they're really thinking.
It runs from definitions to deal mechanics, with plenty of detours along the way: why your fridge is designed to die, whether subscription hardware is a fad, and a real worked example of a hard tech company that sold to John Deere. There's a companion episode on the Venture Declassified feed, so go find that one too.
What we get into:
Where the lines are between hard tech, deep tech, and a plain product company (and why quantum computing is "deep tech" until it ships)
The business-model twist: hardware waking up to recurring revenue and lifetime value (Ozlo, Plunge, and a hypothetical kitchen subscription), and the financing gymnastics that requires
Whether subscription hardware is durable or a fad, the Gen Z economics behind it, and how the speed of innovation killed the resale market
Why so much modern hardware is "designed to fail" after the warranty, the uncanny valley of quality (cheap vs mid vs expensive purchases), and when to design for delight instead of indestructibility
The opposite extreme: med device and oil-and-gas hardware, where the cost of a single failure is enormous
The core investing question: how you underwrite a technical founder, why software is just as "diverse" as hardware, and what changed now that 3D printing and dev kits let almost anyone build a "banger" prototype
Power law, and why a software company "looks better" early because going zero-to-one is so much cheaper
The flip side: the hardware moat, why hardware gets acquired for the technology (not the sales engine), and why copying Uber had almost no technical risk
Multiples and returns: 7x for SaaS vs 2-3x for product companies, and the angel's case for putting hard tech in a portfolio (hint: it looks a lot like life science)
The Smart Apply story: a LiDAR-guided sprayer that reportedly saved a farmer about $800K in year one and sold to John Deere, and exactly how the investors underwrote it
Closing wisdom: founder vs opportunity, what "coachability" really means, the danger zone of conflicting advice, and the quiet part out loud (if no one will fund you, you might be the problem)
A few lines that stuck with us:
"Once you graduate your product, you're hard tech. While you're still in Bell Labs, you're deep tech."
"The same chasm the founder needed to cross to get from zero to one is the same chasm any competitor would also face."
"If you're pitching the right market with the right numbers and no one is giving you money, you might be the problem."
About the guests: Venture Declassified is a podcast about angel investing featuring Jacob Schpok (Partner and Head of Platform at Elevate Ventures), Mike Kelly (co-founder of Start Something Ventures and operating partner at Elevate Ventures), and Ben Pidgeon (Managing Director of VisionTech).
This is a Hardtech Podcast crossover, hosted by Grant Chapman of Glassboard with the team from Venture Declassified.
Special Guests: Ben Pidgeon, Jacob Schpok, and Mike Kelly.
View all episodes
By The Hardtech PodcastThis one is a crossover. Grant sat down with the team behind Venture Declassified, a podcast about what it actually takes to invest as an angel, for a freewheeling conversation about how hard tech companies get evaluated differently from software at the earliest stages. Grant plays the founder in the room and asks three active investors, Jacob Schpok (Elevate Ventures), Mike Kelly (Start Something Ventures), and Ben Pidgeon (VisionTech), to tell him what they're really thinking.
It runs from definitions to deal mechanics, with plenty of detours along the way: why your fridge is designed to die, whether subscription hardware is a fad, and a real worked example of a hard tech company that sold to John Deere. There's a companion episode on the Venture Declassified feed, so go find that one too.
What we get into:
Where the lines are between hard tech, deep tech, and a plain product company (and why quantum computing is "deep tech" until it ships)
The business-model twist: hardware waking up to recurring revenue and lifetime value (Ozlo, Plunge, and a hypothetical kitchen subscription), and the financing gymnastics that requires
Whether subscription hardware is durable or a fad, the Gen Z economics behind it, and how the speed of innovation killed the resale market
Why so much modern hardware is "designed to fail" after the warranty, the uncanny valley of quality (cheap vs mid vs expensive purchases), and when to design for delight instead of indestructibility
The opposite extreme: med device and oil-and-gas hardware, where the cost of a single failure is enormous
The core investing question: how you underwrite a technical founder, why software is just as "diverse" as hardware, and what changed now that 3D printing and dev kits let almost anyone build a "banger" prototype
Power law, and why a software company "looks better" early because going zero-to-one is so much cheaper
The flip side: the hardware moat, why hardware gets acquired for the technology (not the sales engine), and why copying Uber had almost no technical risk
Multiples and returns: 7x for SaaS vs 2-3x for product companies, and the angel's case for putting hard tech in a portfolio (hint: it looks a lot like life science)
The Smart Apply story: a LiDAR-guided sprayer that reportedly saved a farmer about $800K in year one and sold to John Deere, and exactly how the investors underwrote it
Closing wisdom: founder vs opportunity, what "coachability" really means, the danger zone of conflicting advice, and the quiet part out loud (if no one will fund you, you might be the problem)
A few lines that stuck with us:
"Once you graduate your product, you're hard tech. While you're still in Bell Labs, you're deep tech."
"The same chasm the founder needed to cross to get from zero to one is the same chasm any competitor would also face."
"If you're pitching the right market with the right numbers and no one is giving you money, you might be the problem."
About the guests: Venture Declassified is a podcast about angel investing featuring Jacob Schpok (Partner and Head of Platform at Elevate Ventures), Mike Kelly (co-founder of Start Something Ventures and operating partner at Elevate Ventures), and Ben Pidgeon (Managing Director of VisionTech).
This is a Hardtech Podcast crossover, hosted by Grant Chapman of Glassboard with the team from Venture Declassified.
Special Guests: Ben Pidgeon, Jacob Schpok, and Mike Kelly.