Silicon Valley changes: Wind capitalists refocus research start-ups

VCs have been a source of innovation for Silicon Valley start-ups, but for research-oriented start-ups, because of the large investment in research and development, long cycle, and in the short term, it is difficult to obtain income, so the venture capitalists have been wary of research start-ups, but this situation has changed in recent years, VCs are starting to pay attention to the development of such enterprises. "The New York Times" online version of the current article on this situation is analyzed, the following is the main content.

The first is to look at three research start-ups: the Vestaron that extracts environmentally-friendly pesticides from spider venom, the Bagaveev that uses 3D printers to make rocket engines for nano-satellites, the transatomic power to develop next-generation nuclear reactors, and the three companies have one thing in common. That is, their operations are funded by the Silicon Valley venture capitalists.

After years of "staying out" of science, engineering and clean tech start-ups, investors have breathed a sigh of relief for entrepreneurs in recent years that have begun to pay attention to the development of these companies. However, even with the support of investors, these companies still face huge development pressures, and they need to prove to investors that research-oriented firms can earn more than Snapchat and Uber.

In August this year, Founders Fund, which provided financial support for social networks such as Facebook, Yammer, and streaming music services, announced a $2 million investment in transatomic power. Prior to that, Y Combinator, which provided financial support for social news sites Reddit and game developer Omgpop, invested 1.5 million of billions of dollars in helion energy for the nuclear engine development enterprise. Last month, Google announced the acquisition of Lift Labs, a biotech start-up that developed the anti-trembling intelligent spoon.

"We are trying to make a difference in the field of pesticides," said John Sorenson, a former genetics researcher and Vestaron CEO John Solensen, who has been trying to find investors in the past few years while his focus on Snapchat And square have received millions of of dollars in investment, but Vestaron successfully completed the third round of financing last month, "Thankfully, investors are finally starting to pay attention to real, hard core science and innovation." ”

Statistics from the National Venture Capital Association (VENTURE) show that Industrial and energy start-ups have attracted $1.24 billion trillion in financing in the first half of 2014, more than twice times the same period last year, but this is still below the peak of 2008, when industrial and energy start-ups have attracted 4.64 billion of billions of dollars of financing in the year.

Industrial and energy companies are dwarfed by the ability to attract investment compared to technology firms, especially networks and mobile service providers, such as software start-ups that attracted 11.2 billion of dollars last year, up 85% from 2008.

Including solar panels, the clean energy industry, which includes algae biofuels and new batteries, has attracted billions of of billions of dollars in financing, but because most of them have failed and caused huge losses for investors, investors are beginning to dread the nascent research start-ups, Even investing in it will keep a close eye on the company's development.

But investors generally believe that Silicon Valley has been avoiding some of the more difficult issues, "we want to see cars that can fly, rather than just 140-character Twitter," Founders Fund's quote reflects the current expectations of Silicon Valley investors for scientific start-ups, After all, the internet industry has developed into a relatively stable phase, so if you want to get a decent return, investors need to shift their eyes to other areas.

"I am very interested in anything that has to do with the ' Iron Man costume '," said Adam Draper, founder and president of investment agency boost VC, Adam Drey, the Bagaveev company that was mentioned earlier, The latter, which mainly uses 3D printers for rocket research and development engines with nanoscale satellites, "the value of social networking is falling and VCs are looking for the next investment point." ”

Transatomic Power, founded in 2011, was co-founded by a number of nuclear scientists from the Massachusetts Institute of Science, which focuses on small-scale molten salt reactors that not only produce reliable, clean energy but also produce no nuclear waste. Although the technology has emerged in the early 60, transatomic Power has redesigned it and used its own funds to carry out a number of studies on materials and models, and the company now needs a lot of money to support the next step.

"Our world needs more stable and inexpensive electricity, and the new nuclear technology we've developed will be a good solution," said Leslie Dewan, co-founder and president of Transatomic Power, Leslie Devan. But we still need about 300 million dollars in investment, maybe we should develop an iphone app. ”

Vestaron, a bio-pesticide firm founded in 2001, has focused on agriculture and food Research. According to Vestaron, the pesticides they extract from spider venom can kill pests such as beetles and caterpillars without harming other animals, a method that will significantly reduce the impact of pesticides on the environment, while killing pests while ensuring job safety and food safety for agricultural workers.

The EPA has approved the Vestaron from spider venom this year, allowing it to sell pesticide products to vegetable-shed farmers in 2015, and Vestaron has set itself a 1 million dollar sales target, At present they plan to use the funds obtained in the recent round of financing to promote their products to farmers, and hope that the future products to the family and garden areas.

It is worth noting, however, that even though research start-ups are attracting investment at the moment, they are still under enormous pressure to make a profit in the early stages of development.

In the case of XCOR Aerospace, a U.S. aerospace company, the company has been forced to focus on providing rocket engines for NASA and some aerospace companies in the short term, despite the company's long-term goal of developing rocket-orbiting space shuttles. After gaining a steady stream of revenue, XCOR began to install its own developed engine into the back end of the test aircraft to carry out the shuttle test. The XCOR was able to make the fuselage of the space plane angels after a 14.2 million dollar investment was made available in May this year by receptacle.

"They also know that investors will certainly not send 1 billion of dollars to get them to build a space shuttle directly," said Chad Anderson, managing director of angels receptacle. So they start with parts that are commercially profitable, and that's the right thing to do. ”

Compared to XCOR, Bagaveev is not optimistic, The company received only 535,000 dollars of seed money to finance this April, which will be used to study launch technology to send micro-satellites weighing only 22 pounds (about 10 kilograms) to outer space, according to Bagaveev's founder and CEO Nadir Bagaviev (Nadir Bagaveyev, a technology that will help small space companies accomplish satellite launch projects worth millions of of billions of dollars. "We're like ups in space," Bagaviev said, "and we're committed to delivering the satellite to orbit in a week to one months." ”

Bagaviev also pointed out that the Bagaveev plan to use the recent seed money to prove his idea of the great potential, the company plans to conduct its first test flight by the end of this year, Bagaviev hope that the test flight will allow the company to attract more investors attention. "We will show our strength to the outside world and hope to get more investment," he said. "I think investors should be tired of those message apps and our ideas are more appealing." ”

Translator: Xiao Kai

(Responsible editor: Mengyishan)