A focus on technology risk and being global-minded are key to investing in innovation
A focus on technology risk and being global-minded are key to investing in innovation
Managing Risk in Innovation
All VC firms look for ‘innovative’ opportunities, but we view such opportunities by identifying three associated risks: technology risk, intellectual property (IP) risk, and market risk. A company that has none of these risks is usually too mature and late stage for VC investors to consider. In this context, VC investors choose to take on any – or a combination – of these risks when making investments.
In Vickers Venture’s case, we only take one risk – technology, while minimizing or avoiding our exposure to the other risk categories. Market risk, in particular, is something we look to mitigate in investment decisions because it is very difficult to predict the potential demand for any product. Whether a market even exists for a company’s product is the biggest hurdle to overcome. It is this type of high-risk bet that makes VC results so volatile.
Our risk focus means we select deep tech companies solving known challenges with known and ready demand. For example, backing those that are developing biodegradable plastic alternatives, cures for cancer, geothermal innovations, and even vaccine platforms tackling dengue fever, COVID-19, and universal flu. If any one of these innovations work, we will change the lives of many and make the world a better place.
Why Deep Tech?
Our deep tech strategy focuses on technological breakthroughs that are solving huge global challenges. These companies typically have very defensible IP, which would give them huge pricing power and a de facto monopoly for a while. Instead of having to fight in a ‘red ocean’ to gain market share, the deals in our portfolio have a high chance of taking over an entire market and being profitable very early.
As mentioned, market demand is a hard thing to predict. We have no competitive advantage in guessing a market reaction. That said, our team of expert scientists can assess which technologies are likely to work and whether they have an advantage over rivals. We can make better judgments, and assist the companies we back, better than investors who invest in our funds, and that's our value-add.
About Vickers Venture Partners
Vickers Venture Partners is a global venture capital firm focused on deep tech investments. The firm was founded by Dr Finian Tan together with Dr Khalil Binebine and their co-founders Dr Jeffrey Chi, Dr Damian Tan, Linda Li, and Raymond Kong in 2005. Vickers Venture Partners is headquartered in Singapore with offices in New York, San Diego, Silicon Valley, London, Shanghai, and Hong Kong. The partners’ track records include early investments in Baidu, Focus Media, JJE, Hillstone Networks, Cambridge REIT, TWG, M-Daq, and more. The total market value of the companies that the partners have helped grow exceeds $50bn today.
Learn more about how private equity & venture capital is boosting demand for innovation in key Asian economies with Preqin's new report, Private Equity & Venture Capital Driving Innovation in Asia-Pacific.