For this Deep Tech Dive, I had the pleasure of sitting down with Jai Malik, General Partner of Countdown Capital. Countdown Capital is a Deep Tech VC firm focused on investing and providing in-house support for teams committed to deep philosophical and ethical thinking on top of breakthrough engineering.
- Most deep tech products are ready to be commercialized. When thinking of futuristic/sci-fi-like technologies you’re thinking about the 10% of the deep tech industry. And if we want to normalize deep tech startup building, we need to create more exit opportunities for deep tech companies (which SPACs do a great job of).
- As a GP, you’re basically a manager of money, facilitator of capital, and builder of communities.
- College degree or not, shoot your shot. Be bold and don’t be afraid to network with even those most distinguished. The whole world is digital, so your future is at your fingertips.
- Unfortunately, it may take America’s dominance being challenged on a global stage in order for a fundamental realignment of what children think of as their dream job to take place.
“My favorite part about VC is investing in founders who will build companies that I myself would want to work for.”
This interview was edited and condensed for clarity.
Tell me about yourself and how this led you to Venture Capital?
My career started as an operator at two seed-stage tech startups. My first startup was with a company called Accrete.AI, where we were building machine learning-powered products to monitor market movements. This led me to Forge.AI, where I helped the team analyze and detect market anomalies and create data-driven product use cases for government and banks.
As I worked with these companies I got really interested in venture capital (VC), because I wanted to see how things looked on the other side of the table. I understood the financial ins and outs of investing since I got my undergrad degree at Stern (business school at NYU), so I thought I would be a good fit as an investor one day. With tons of networking, I was able to make the switch over to VC where I was fortunate to get a position at Rocana Ventures.
What was your experience at Rocana like?
At Rocana, I focused on food and food tech investments. One notable investment we made was Good Catch, a modern plant-based seafood platform (“Beyond Meat” for seafood).
At Rocana, I got to witness how capital-intensive products needed to be managed in order to achieve success in competitive markets. In particular, I learned that both founders and investors need to have a very solid handle on manufacturing techniques, supply chain, commodity risk mitigation, and so on.
What is deep tech to you? I usually always see it from a futuristic sci-fi lens.
When most people outside of deep tech usually talk about deep tech, they’re really only talking about 10% of the entire industry: moonshots. With the right founding team and market timing, moonshots can defy steep technical uncertainty and can transform the world; but, the reality is that 90% of tech products in the deep tech space doesn’t involve steep technical uncertainty, just emerging tech that has an uncertain market size & is ready to be commercialized and scaled for the first time. It’s worth mentioning that if you run a venture firm and are only looking at moonshots, I believe you’re not going to have a great chance of returning a 10-year fund because they have traditionally required very long timeframes to exit (if successful).
Is there a way we can normalize building moonshots?
Yes, but only by normalizing exits for those who want to build moonshots. What’s been really helpful over the last year are SPACs, special purpose acquisition companies. They have completely changed the entire calculus for people investing in deep tech; companies that would have probably taken 10–20 years to go public can now go public in 5 years.
What are your responsibilities and functions as a general partner (GP)?
The formal definition of a fund’s general partner is the person or persons that hold a fiduciary duty to realize the most optimal financial return for the fund’s limited partners (LPs) — usually within a certain timeframe and in the context of a strategy as defined in a limited partner agreement. In layman’s terms, GPs have to set a strategy to make money and manage money (that other people invest in the fund with) using that strategy. For example, a GP’s thesis might be to invest in Pre-Seed software companies to achieve the best return possible, and the GP usually will need to follow that strategy once they get investors in the fund and start investing.
Practical responsibilities are numerous and include:
- Investment responsibilities such as sourcing deals, doing due diligence on startups, and closing deals;
- Operational responsibilities, like working with your back office to ensure that the financials & taxes are being completed on a regular basis;
- Community-building responsibilities, such as communicating with your LPs on a quarterly basis and curating a space for your LPs, you, and your portfolio companies to undertake cross-collaboration initiatives;
- Fundraising responsibilities — always be fundraising, for the fund, or for your startups!
As a GP, you’re basically a manager of money, facilitator of capital, and builder of community(ies).
Is this the reason you built Altum, your future-focused community?
Not really. Altum was created to address a gap in the market; everybody was collaborating and creating communities around software products and consumer products. I realized that deep tech folks lacked that type of dialogue. It’s a relatively small ecosystem, so people may know others through mutual connections/hearsay; but, there was no one way to get people to connect to each other easily, so I wanted to fix that.
I also created Altum because I want to make it really easy for founders, engineers, and investors to communicate with each other after they get to know one another. Founders especially find it useful to DM an investor they want to pitch to on Altum and build a relationship informally, without formal emails and phone calls.
What is your mission at Countdown?
Our mission is to invest in deep tech founders at the early stage who are committed to machine ethics. Our thesis is that those founders will outperform founders that are not committed to machine ethics. There are a couple of (non-exhaustive) reasons why we feel that way.
- Regulation. We believe that, in the next decade, certain government agencies and entities are going to be taking a deep look at the impact of emerging technology on society at large. Issues such as data privacy, data governance, and cybersecurity are very much in focus, and most early-stage deep tech companies do not think about these issues today when they’re building at an early stage. So, our goal is to get in early, help build that mindset early on, and create a strong foundation for the long run that protects them from regulatory scrutiny.
- Trust. Most of the startups we work with are B2B / have enterprise customers. The incumbents they do business with have been around for decades. It’s important to these legacy companies that their suppliers and potential partners/acquisition targets remain trustworthy and shield themselves from unfavorable press/liability. By not thinking about ethics early on, startups put themselves at risk of losing trust from large companies they work with and generate revenue from.
I love how you guys are thinking; as Ray Kurzweil explains, we must be ready for The Singularity so machine ethics matter, right now! How can other firms adopt this kind of thinking?
It doesn’t take much; in general, we need more investors that keep their companies accountable, whether it’s clearly unethical founder behavior or discriminatory hiring practices.
How can we get people more interested in deep tech early on in their lives?
I think we’re heading in a direction where everybody will soon learn computer science as a minimum, while interest in electrical/mechanical engineering continues to wane. This is in light of the fact that our world continues to become ever more digital, so that isn’t necessarily working in our favor.
To get to a place where we can inspire more people to build deep tech products requires a fundamental change in how American society currently functions. We are at a point where people want to be influencers more than being astronauts and builders; desire for fame reigns supreme. Unfortunately, I don’t see this reversing until Americans are confronted with the global threat that China presents and the real risk of losing to them as it relates to producing game-changing innovation and commanding the world’s respect through technological prowess.
How do you feel about the top 10 jobs children in the US want to be?
Screenshot of an image from Jacob Dirnhuber’s article in The Sun composed of data obtained from a survey of 1,000 children in the US by travel company First Choice.
It’s a symptom of where society is going; we need more young people to think bigger and care about our national security/future as a liberal democracy.
What would you recommend to someone who hasn’t gone to college and is looking to break into VC?
My Associate at Countdown (Manoj) does not have a degree, and there are others like Nicole Williams from Compound VC who are brilliant despite having nontraditional educational backgrounds. Folks like Manoj and Nicole are more qualified than me to give an opinion; but, from my limited experience, over-index on networking, and a raw passion for learning whatever interests you to develop a really unique way of looking at the world. You’ll find that can lead to better outcomes compared to most folks who have graduated from college and, for some reason or the other, never had the opportunity to spend time on what interests them.
By the way: before diving into VC, I do highly recommend working for a startup. One way you can get in the door at a startup is by just asking the founder(s) for an internship, or help them with literally anything small. It will give you a perspective of where founders are coming from and will ultimately help you be more empathetic when you’re able to start investing.