How to Invest in Deep Tech Companies

Kenna Castleberry
Business concept. Business people discussing the charts and graphs showing the results of their successful teamwork. Selective focus.

Deep technology, also called deep tech, offers new and lucrative capital markets. While deep tech can be hard to define, it usually means a product that combines software with something else, such as physics, medicine, material science, hardware, or biology. Because of the many different types of deep technology, including virtual reality, supercomputers, robotics, etc., deep tech can be applied to all industries and almost all capital markets.

The benefits of investing in deep tech companies seem to outweigh the risks. Experts predict that the deep tech industry as a whole will grow significantly in the next few years. Many investors and venture capitalists invest in deep tech because they know that there will not only be high rewards, but the technology will positively impact our future. There are already many successful deep tech companies. Called unicorns, these companies are worth more than a million dollars.

Deep technology as a potential investment is intriguing because it is no longer just part of the scientific community, but it’s not pure corporate either. For an investor, the successful mix of the two backgrounds ensures a more sustainable pattern of growth for a business, but also unique and innovative technology. As deep tech has risen in popularity, more venture capitalists have moved to back these science-based start-ups. There is no right way to invest in deep technology, but as a potential investor, the following suggestions may be helpful.

  1. In some cases, it’s better to buy directly in

With deep tech like blockchain, it may be more profitable to invest in a company that is using the technology already, such as Bitcoin. You can buy direct Bitcoin to invest in blockchain. This is one example of buying directly in, in this case, cryptocurrency.

  1. Do some research

If you’re interested in one type of technology or company, do some research to find out more. This can be particularly helpful for looking at a timeline or an R&D process. As an investor, this can help you make a decision about an investment, or give you a realistic schedule of a deep tech company.

  1. Keep an eye on GAFAM

When it comes to the capital markets of deep tech, there are key players to keep in mind: Google, Apple, Facebook, Amazon, and Microsoft (GAFAM). While these big data giants seem to be in the public eye already, watching how they handle their own deep tech can tip you off for a potential investment.

There are many ways to invest in deep technology, but one thing is clear: the sector will continue to grow and be applied to our society. It’s only a matter of time before we accept the advancements of deep technology in every industry.

References:

Joffe, Benjamin. 2019. “Deep Tech Investing 101.” Www.linkedin.com. 2019.

Portincaso, Mossimo,. de la Tour, Armaud,. Soussan, Philip. 2019. “Deep Tech.”  BCG Global. 2019.

Sheetz, Haley. 2017. “Here’s Why You Should Consider Investing in Deep Tech.” Medium. November 29, 2017.

Image courtesy of Freepik.com

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