Deep Tech Dive #16 | Upheaving the Private Markets

Andrew Kirima
Cassandra Carothers Investor at Upheaval Investments

Meet Cassandra Carothers, Investor at Upheaval Investments. Cassandra is an early-stage deep tech VC with a broad background spanning across many industries and countries. Her audacious behavior + various experiences place her in a great position to help diminish a lot of the ambiguity surrounding the private markets—to accelerate the rate of innovation. 

Key Takeaways:

  1. Two significant barriers to entry in venture capital are information asymmetry and a lack of access to networks.
  2. VC isn’t there yet, but it’s heading in the right direction. Many emerging and diverse fund managers are transforming the paradigm of venture capital, including what it looks and feels like to be an investor.
  3. Currently, our cloud infrastructure is not ready to support the other half (or 4 billion) of human beings coming online in 10 – 15 years.  Without disruption, the industry will continue down the current path of incremental improvement in the direction of more reliance on edge compute, simpler infrastructure as a service, and weekly data breaches. 

We are just an advanced breed of monkeys on a minor planet of a very average star. But we can understand the Universe. That makes us something very special.” – Stephen Hawking 


This interview was edited and condensed for clarity

Can you tell me about yourself and your background before VC?

I was born in California and grew up in Southern Oregon. I was always outdoors—hiking, kayaking, skiing, fishing, camping. I played tons of sports and got my third-degree black belt in Chun Kuk Do Karate by the time I was thirteen.  

I graduated first gen from Brown University with a degree in International Relations and played on the golf team for four years. The IR concentration and Brown’s infamous open curriculum allowed me to explore my (very) far-ranging curiosities, from advanced German literature and Russian to spying and surveillance in post-Snowden international relations. I’ve always been a science nerd and intrigued by complex technologies – I continued to pursue those interests via computer science, mathematics, and cybersecurity courses. Summers found me in Berlin (my first true love in a foreign city), working on various internships, including sustainability and Germany’s shift to renewable power (die Energiewende), and education. 

After graduating, I officially kicked off my career in Hong Kong with a South China Morning Post partner firm. This led me to meet 1,000+ C-suite executives, public and private leaders from 100+ cities while living and working in the UK, Switzerland, Germany, Japan, Malaysia, Indonesia, Australia, New Zealand, and the U.S. The role required me to rapidly become a jack of all trades and a “mini expert” in many areas. I consulted leaders of public and private organizations across all industries, sectors, and sizes regarding trends in Greater China and APAC and best practices for entering/expanding in Asian markets via trusted local partners, JVs, and other means. During my years with this firm, I picked up valuable skills, including strategy, sales, team management, business development, negotiation, and a globally influenced perspective on business, industry, and innovation. 

You never had any pushback as an American working in Greater China?

Being American was never a challenge within a business context—even in social circles, Hong Kong (and many of the places I lived during that job) is very international, with a vibrant expat community. To me, it’s imperative to travel mindfully, respectfully, and sustainably. I go out of my way when I’m in new places to experience life as locals do, to the extent possible and appropriate.  

What was next? 

After working in close conjunction with so many industries, ranging from legacy players in heavy industry, electronics, semiconductors, engineering, manufacturing, pharma, agriculture, and F&B, through to SMBs and young businesses, it had become clear to me what I truly enjoyed—innovation and complex technologies. 

Eager to dive into the world of fast-moving startups, I moved to the Bay Area and took a senior sales role at Bitly, focused on global enterprise SaaS contracts. I spearheaded the company’s expansion to the Japanese market and new customer initiatives, specializing in India, LATAM, Middle East, and U.S. territories – selling to organizations ranging from Fortune 500s to SMBs. I brought my twist to negotiations and deal closing, shaving weeks or more off of the typical sales cycle. I was fascinated from the start of the product’s inner workings and gave all of my own technical sales demos.    

I went on to manage the technical sales org at Corgibytes. This software development shop helps organizations make their existing custom software systems more stable, scalable, and secure through maintenance and modernization. Once again inspired by the deeper technical aspects of my role, I started learning how to code, gained a comprehensive understanding of software architecture, best practices, technical debt, software remodeling, and codebase analysis. I gained an appreciation for the beauty that can be found in legacy code and an intriguing counterbalance to my passion for innovation in the importance of maintaining what already exists. My role encompassed all business development and strategic partnership initiatives and operations, marketing, and product.

I forayed into a few other projects along the way, including partnering with Wibroe, Duckert & Partners, a leading Danish branding and design agency, to determine whether U.S. and North American market expansion was a good fit and shape their GTM and Sales strategy with a focus on the tech startup and innovation ecosystem.  

How did you come to be an Investor at Upheaval?

I heard the term Venture Capital before, but having never worked in traditional banking or finance, it was an ambiguous concept to me, at best. Once I was embedded in the startup ecosystem, I kept learning more about the world of VC and realizing how many opportunities there were to make a difference. 

At Techcrunch’s Disrupt SF conference, I met Riley Florsheim, Managing Partner of Upheaval Investments. Our conversation started around branding and market positioning for deep tech startups and ended far down a rabbit hole about quantum computing, astrophysics, and space tech. Shortly after that, Riley asked if I’d be interested in joining Upheaval Investments part-time as a Venture Fellow, which I was thrilled to accept.    

I’ve always been a voracious reader and am the type of person that spends my free time researching cutting-edge technologies, global market trends, and frontier discoveries, then reading white papers to make sense of it all. For me, deep tech venture capital represents a perfect combination of my interests and passions. I thrive off of the breadth and depth of the work, and most of all, the privilege to meet such inspiring founding teams with fascinating and meaningful visions. After a while, I found myself working on Upheaval (sometimes more than) full-time, and when there was an opening, I officially joined the investment team full-time.        

It took all of that to be embedded in the VC ecosystem finally. Which prompts me to ask, why is an industry so essential, the people who allocate capital at the earliest stages of innovation shrouded in such ambiguity?

That’s a tough one. Honestly, before I was in the industry, I had little knowledge, and information was not readily available. As I became more familiar with the space, this “mysterious curtain” surrounding the industry only seemed thicker. On the other hand, once you’re in, you’re in. My echo chamber has massively shifted to now engulf me in all things VC. Doors open ever so easily now, and I can gratefully say that almost everyone I’ve met in the ecosystem—investors and entrepreneurs alike—are respectful, intelligent, and just plain fun to get to know.

Having been on both sides of the table, I can see several areas of disconnect. One is as simple as information asymmetry – as an investor, I have access to multiple communities, where information flows freely — including access to founders, peer VC funds, even LPs, and a steady stream of job opportunities within venture. These communities, full of valuable resources, are often unavailable to those not already investing actively full-time.

Another barrier is classic: networks. “It’s not what you know, but who you know” has never been more true for any industry. Venture Capital is one of the worst offenders when it comes to diversity – it has been historically (and still is) a very old, white, male industry. Good old boy networks run strong, and even in more modern circles, connections and warm intros to VCs—for founders and potential job applicants alike—are invaluable. For those that lack these crucial networks for any number of possible reasons (career trajectory outside of the startup ecosystem, non-traditional finance and banking background, education history, etc.), “breaking into” VC can feel next to impossible. 

It’s discouraging how few people understand what’s going on in the private markets, yet these people stand at the gateway of innovation. 

I’m tainted now because after living in the Bay Area and just dipping my toe into VC, everyone I know and talk to is either a VC, founder, private equity (PE) investor, or working in a peripheral industry (accelerator, incubator, research institution). The more people I meet, the larger this community seems, and I wonder how I was missing all of this? But then, I talk to one person on the outside, and they have no clue how startups are funded – or even perspective on what startups are and why they exist.

Do you feel that there is less ambiguity behind venture capital now?

Yes and no. The good news is that there are tons of resources to be found online, so there’s a lot that can be accomplished if you’re willing to put in the research. 

When I was at Brown, it goes without saying that I had hardly heard of venture capital, let alone considered it as a career. Now, multiple student-led, early-stage venture funds are investing alongside Angel networks and established VC funds. There are pitch competitions and industry days. Soon, we will see undergraduate curricula that reflect the (always present but increasingly recognized) importance of early-stage innovation via venture capital as a viable career path. This is specific to a university not surrounded by a typical startup ecosystem that doesn’t have a business school. Geography plays a massive role, of course – where (pre-existing) startup ecosystems are vital, awareness of and access to VC likely follows.      

Education is crucial. I’m not referring to teaching students directly how to be a VC—I’m talking about simply making information available: for first-generation college students with a variety of backgrounds and privilege levels, it cannot be assumed that they already know about all of the options available to them following graduation. Career days are great, but even just navigating those can feel overwhelming. To the un-enlightened, finance careers easily blur together and suggest crunching numbers and endless excel spreadsheets not interacting with frontier technological innovations and scientific breakthroughs every day.

As a country, the U.S. needs the private markets to be as popular (and accessible) as the public, and there’s a long way to go. Our capitalist roots likely contribute to VC’s historical exclusivity for competition’s sake. Now, there is an ever-growing pool of resources for people looking to break into VC work at existing funds or spin up their own funds. Some that come to mind worth checking out are: Emerging Venture Capitalists Association (EVCA), National Venture Capital Association (NVCA), On Deck, Confluence, John Gannon Blog, Oper8r, and GenZ VC. Dorm Room Fund, Rough Draft, and Contrary Capital are among well-known student-centric funds, with more launching all the time. Internships, fellowships, and scout programs with established funds allow students and people in other careers to gain venture experience. Meanwhile, crowdfunding platforms like Republic and Sweater Ventures enable accessibility to invest in the private markets for previously excluded demographics, especially non-accredited investors.

However, Deep Tech requires forward-thinking of the future, so do you think this mindset will help diversify the private markets?

Yes, I think this mindset will contribute much-needed intellectual diversity to the private markets. Similar diversity failures still plague Deep Tech as the broader industry, though, with not nearly enough women, BIPOC, and LGBTQ investors and founders at the table. 

Overall, I think the industry is heading in the right direction, with emerging and diverse fund managers transforming the paradigm of venture capital, including what it looks and feels like to be an investor. There are many that I admire; for now, I’d like to shout out Ariana Thacker of Conscience VC, Jai Malik of Countdown Capital, Kim Kolt of For Good Ventures, and Mac Conwell of RareBreed Ventures. 

This type of out-of-the-box thinking, paired with the willingness to take risks, will move VC forward for the better. There is nothing like diversity to improve collective intelligence. I think it is finally becoming evident that for our success as humans—even the very survival of our species—diversity is non-negotiable. This is just as important on both sides of the table and at every step of the way.

This is the very essence underlying Upheaval’s existence. We believe that innovations will be rooted in scientific and technical breakthroughs capable of solving our world’s biggest problems. We also believe that great innovation can come from anywhere, which is why we are entirely geography agnostic and on the lookout for bold founding teams, regardless of their pedigree.  

What are your responsibilities and functions as an Investor?

I participate end-to-end in our deal cycles, from sourcing to diligence, investment decisions, and portfolio support. I learn every day, ask many questions, and think about big, complex problems facing our species and planet. On any given day, you can find me talking to founders, reading whitepapers, paneling pitch events, analyzing companies, and researching markets. I’m always striving towards a harmonious balance between research and thesis-driven conversations and reacting to live opportunities. Working with startup founders is an unparalleled privilege, and I am committed to contributing to the diversity we talked about earlier via mentorship and active participation in the ecosystem.  

What Deep Tech sectors do you focus on at Upheaval?

As generalist deep and frontier tech investors, we invest in software & hardware and are sector agnostic. Industries that I spend quite a bit of time on include aerospace, robotics, next-gen computing (quantum, post-Von Neumann architecture, chips, etc.), AI/ML, data privacy, cybersecurity, next-gen internet, advanced materials, industry 4.0, biotech, agtech, and cleantech.     

We’re on a mission to back bold founding teams that are challenging the status quo, revolutionizing conventional wisdom, and building companies that will fundamentally disrupt industries or create new markets.

In addition to fundamental disruption, we prioritize clear, compelling paths to commercialization and massive potential to scale for maximum impact. We look to invest in companies with innovations that work backward directly from a problem and tackle or solve it in a valuable and unique way. We enjoy talking to quick-thinking founders who understand precisely what pain point they’re solving for their customers and why they need to exist, even if they don’t have a prototype built yet.   

How do you add value to your portfolio companies?

Upheaval is intentionally structured to align our (investors’) interests with those of the founders we back. Upheaval was spun out of a Chicago-based family office, Levy Family Partners (LFP). We invest out of an evergreen fund, which allows us to be genuinely patient capital partners. Deep tech often requires much longer cycles of R&D than consumer/SaaS ventures, meaning a longer time to commercialize. Different types of support are also needed, whether on the business or technical side. Our investment decisions are driven purely by conviction and never time pressure or obligation to deploy capital. 

We can lead or co-invest from Pre-seed through Series B, which are the typical stages we target for participation.

Our close relationship with LFP allows our portfolio companies unique access to later-stage capital and creative financing, as well as exit support in the way of M&A negotiations and taking companies public via SPAC or IPO. We can also tap into an established network of subject matter experts (SMEs), industry professionals, and commercial relationships on behalf of our portfolio companies.

As a VC, how do you identify the appropriate level of influence to have on a company?

We don’t take many board seats or have hardcore investment mandates, but we genuinely love nothing more than supporting our founders and being as hands-on as needed. We understand and respect that companies have incredibly different needs at different stages of their journeys, and we are present for that. Riley, Upheaval’s Managing Partner, is an engineer and two-time (deep tech) startup founder, bringing heavy technical expertise and a critical perspective to building and exiting businesses. Leveraging my business background, I contribute the most in the way of go-to-market (GTM) strategy, business development, international market expansion, operations, and the nuances of building out a strong team, management, and company growth across stages. I’m also a serious dot-connector and relentless supporter of our founders, so I will stop at nothing to open doors for them. 

I’m worried about our cloud infrastructure. What happens when the other 50% of the world population comes online in the next 10 – 15 years?

I share your concern. We all are evolving our identity into digital identity, and the massive flaws in our cloud—even internet—infrastructure are becoming increasingly pervasive. From a business perspective, the cloud is failing its customers. From an environmental perspective, the cloud is failing, or possibly even threatening, our planet. And, from a human perspective, many of these technical failures, which nearly universally also affect people who are not the direct user of these services, stem directly from preventable practices.

Today’s cloud infrastructure is not adequately secure, private, or scalable. There is a cost to companies who don’t look after their customers and fail to provide more value, even if it’s not always felt right away. Beyond this, as technology becomes even more expected by consumers, organizations will be rewarded for simpler platforms that lower the still-massive barriers to entry for technology creation, allowing more talent to create more value.

Riley has a long history of working and investing in these problems. The concept of sovereign digital identity that I mentioned before is something we’ve been excited about since before the technology began to exist to address it. Now, projects like MIT’s SOLID, though certainly with some technical and strategic weaknesses, represent reasonable attempts at finally bringing the future closer to now.

There are massive businesses built off the back of diagnosing where companies are and should be, spending the most because cloud pricing is obscure, in part intentionally to hide the gargantuan margins claimed by the industry, and distracts from the often minor differentiation between vendors.

Short term, over the next 10-15 years, without disruption, I suspect the industry will largely continue down the current path of incremental improvement in the direction of more reliance on edge compute, simpler infrastructure as a service, and weekly data breaches. There will be opportunities to create an upheaval with investment into things like FHE/IO, post-Von Neumann architectures, universal datastores, and we’re particularly excited about going beyond the cloud to imagine what it might be like to stare at the whole sky. However, there are significant barriers to a safe and fully connected future being adequately realized.

How do you all drive ethical thinking into your investments for powerful technology like that, so we don’t have a Cyberdyne type of situation?

When I hear this question, I think of season three of Westworld, where humans are stuck in routines they can’t break. The latest AI system, a quantum computer called Rehoboam, uses its power to predict and then shape future events based on people’s data it’s—terrifying.  

Since we invest at such early stages, in some cases before the product is even built, we rely on building relationships with founders and emphasize the importance of the team when we evaluate investment opportunities. We look for traits like coachability, low ego, and high EQ, temperament, and how the founders approach situations as individuals and as a team, ranging from celebrating milestones, conflict, and disagreement, to failure and disappointments. We also ask ourselves tough questions around whether we believe this team is the one that has what it takes to lead this business to success and whether they will do so with ethics at the core. 

Any last words?

If you’re building an early-stage deep tech company solving a big problem creatively, please get in touch! You can follow me on LinkedIn and/or Twitter. And keep an eye out for  cassandracarothers.com, which I hope to have up and running soon! 

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