Context: I actually did my homework for once—no riffing, real prep. Grant (partner at Cantos, ex-American Dynamism at a16z) and I sat down to dig into his famous, monstrous 286-slide deck on “hard tech”/deep tech/whatever-you-want-to-call-it, and why the capital markets are finally “getting the plot.”
Market Signal: The big market signal is that capital—real, mainstream, not-just-weirdos capital—is finally flowing into hard tech and deep tech. But it’s not just because Palmer Luckey was right and now everyone’s chasing him (though, sure, that’s part of it). The real story is that three things had to line up: credible companies, credible talent spinning out of those companies, and then, finally, credible pools of capital willing to take the leap. The launch of American Dynamism at a16z was a key inflection, not because they were first, but because they were big enough to anoint the sector and make everyone else comfortable to pile in.
But (here’s the twist) it’s still early. Outside of defense, most of these categories are pre-consensus, pre-signal, and most investors are still risk-off. The “IBM-ification of venture” is real: everyone wants to see traction before they move. That’s both a challenge and an opportunity.
Key Takeaways:
Precision matters. The deck’s Deep Tech Score slide is about moving beyond “hard tech” as a catch-all. There’s a spectrum—from SaaS to true science moonshots—and until we get more granular, we’re talking past each other (and missing real opportunities).
Narrative violations are everywhere. The data shows hardware companies have actually raised less and delivered higher multiples than most software companies—contrary to the prevailing narrative that hard tech always needs way more capital. Precision in language and data can shift the narrative (and the capital flows).
Voting machine vs. weighing machine. Most of us want to believe the market is a weighing machine (Buffett/Munger style: fundamentals win), but in reality, the “voting machine” (momentum, narrative, anointment) still matters—a lot. The best founders learn to play both games, and so do the best VCs.
You can’t fake authenticity. There’s a temptation to “mimic” the Jobs/Palmer archetype, but the best founders figure out their own authentic narrative and learn to play the voting machine game without losing their soul.
Old venture principles still apply. High growth, high margins, capital efficiency—none of this is new. “Adventure capital” is just good venture capital, with a willingness to underwrite non-consensus, high-variance bets at the edge of what’s possible.