In this episode of Nothing Ventured, host Aarish Shah sits down with Harry Morgan, principal at 7% Ventures, to explore the complexities of investing in climate and deep tech startups. Harry, a former founder turned investor, discusses the challenges of tackling world-shaping problems and the often uncomfortable realities of venture capital, including its tendency to amplify privilege over opportunity. The conversation delves into the unique dynamics of climate investing, highlighting the longer time frames and smaller exits compared to software ventures. Harry emphasises the crucial role of government in determining national priorities and de-risking scientific advancements. He also shares insights on the necessity of bias in venture capital, advocating for a trained approach to backing exceptional founders. Tune in for a thought-provoking discussion on the intersection of investment, innovation, and social impact.

Timestamps:
00:00:00 - Introduction to Nothing Ventured Podcast
00:00:10 - Guest Introduction: Harry Morgan from 7% Ventures
00:00:42 - Overview of Today's Episode Topics
00:01:28 - State-Educated Founders and Funding Stages
00:02:26 - Host Reintroduction and Podcast Purpose
00:02:36 - Harry Morgan's Journey from Founder to Investor
00:03:02 - Lessons from Founding a Startup
00:04:31 - Transition from Journalism to Investing
00:05:04 - Balancing Science and Commercial Aspects in Deep Tech
00:05:58 - Importance of Founder Ambition in Deep Tech Investments
00:06:44 - Indexing on Technological Step Change and Founder Execution
00:07:28 - Early Stage Financial Models and Product-Market Fit
00:08:39 - Building a Business vs. Building Revenue
00:09:52 - Specialization vs. Generalization in Founding Teams
00:10:55 - Adaptability and Generalization in Founding Teams
00:11:13 - Importance of Commercial Knowledge in Founding Teams
00:12:02 - Venture Capital's Role in Solving Multi-Decade Challenges
00:13:17 - Market Timing and Structural Challenges in Climate Tech
00:14:39 - Hedging Against Market Timing Risks in Deep Tech
00:15:19 - Execution Risks in Deep Tech Investments
00:16:45 - Government Regulation and Market Timing Risks
00:17:52 - Technology Success vs. Company Failure
00:18:39 - Differentiation Beyond Climate Impact
00:19:26 - Viewing Climate as a Horizontal Rather than a Vertical
00:20:32 - Government's Role in Supporting Innovation
00:21:12 - Economic Benefits of Climate Innovations
00:22:23 - Challenges with Government Grants and Procurement
00:23:28 - Importance of Government Contracts Over Grants
00:24:08 - Issues with Innovate UK and Grant Flywheels
00:25:35 - Government's Role in De-Risking Science
00:26:25 - Cultural Attitudes Towards Failure in the UK
00:27:29 - Zombie Businesses and the Fear of Failure
00:28:45 - Social Mobility and Venture Capital
00:29:55 - Diversity in Venture Capital: Performative or Real?
00:30:54 - Checking Biases in Venture Capital
00:31:39 - Social Mobility Ventures: Creating an Alternative Flywheel
00:33:20 - Redefining Terminology Around Social Mobility
00:34:24 - Levelling Privilege and Access to Opportunities
00:35:17 - Supporting Underprivileged Founders to Take Risks
00:36:32 - Levelling the Playing Field in Access to Resources
00:37:03 - Systemic Problems in Social Mobility
00:38:41 - Education System and Entrepreneurship
00:39:35 - Celebrating Big Successes and Failures
00:40:34 - Social Mobility Ventures: Goals and Timescale
00:41:39 - Inclusivity in Social Mobility Ventures
00:42:49 - Celebrating Self-Made Success Stories
00:44:06 - Changing the Problems Entrepreneurs Solve
00:44:48 - Focus on Inclusion in Angel Investing

FindHarry Morgan online at:

LinkedIn: https://www.linkedin.com/in/harryemorgan/
Twitter: https://x.com/7pcventures / https://x.com/harryemorgan
7percent Ventures: https://7pc.vc

This episode is sponsored by EmergeOne, fractional CFOs for venture backed tech startups from Seed to Series B.
Get in touch at https://emergeone.co.uk/contact-us/ or join the CFO team at https://emergeone.co.uk/join-the-cfo-team/

Sign up for EmergeOne’s weekly newsletter, Off Balance at https://off-balance.beehiiv.com/subscribe 


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