• World
    • Africa
    • Asia Pacific
    • Central & South Asia
    • Europe
    • Latin America & Caribbean
    • Middle East & North Africa
    • North America
  • Coronavirus
  • Politics
    • US Politics
    • Joe Biden
    • Extremism
    • Europe
    • European Union
    • India
    • Arab World
  • Economics
    • Finance
    • Eurozone
    • International Trade
  • Business
    • Entrepreneurship
    • Startups
    • Technology
  • Culture
    • Entertainment
    • Music
    • Film
    • Books
    • Travel
  • Environment
    • Climate Change
    • Smart Cities
    • Green Economy
  • Global Change
    • Education
    • Refugee Crisis
    • International Aid
  • International Security
    • ISIS
    • War on Terror
    • North Korea
    • Nuclear Weapons
  • Science
    • Health
  • 360 °
  • The Interview
  • In-Depth
  • Insight
  • Quick Read
  • Video
  • Podcasts
  • Interactive
Fair Observer Logo Fair Observer Logo
  • Sign Up
  • Support FO°
  • Login
  • LOGIN

    • Lost your password?
    Forget Password?

    New to Fair Observer? Register Now

    Contributor Member
Fair Observer Logo

152

one hundred and fifty two

Putting the Adventure Back in Venture Capital

Wade Roush - May 24, 2021

Venture capital is the fuel powering most technology startups. Behind every Google, Uber or Snapchat is a syndicate of venture firms hoping for outsize financial returns. But the vast majority of venture capital goes into internet, mobile and software companies where consumer demand and the path to market are plain.

So, what happens to entrepreneurs with risky but potentially world-changing ideas in areas like zero-carbon energy or growing replacement human organs? If it weren’t for an MIT-born venture firm called The Engine and a tiny handful of other venture firms tackling “tough tech,” they’d probably never get their ideas to market.

Venture capitalists (VC) love to cultivate an image of themselves as risk-taking cowboys with a nose for great ideas and the ability to help book-smart inventors and programmers grow into savvy entrepreneurs. But in reality, the industry has spent a quarter-century chasing Google-sized returns in the relatively safe, efficient and low-cost markets such as consumer and enterprise software, mobile apps and, to some extent, health care and drug development. Sure, smartphones and apps are fun, but how much is the next new video-sharing app or gaming platform going to contribute to human welfare?

Make Sense of the World

Unique Insights from 2,500+ Contributors in 90+ Countries

The Engine, created by MIT in 2016,  is one of the visionary counterexamples. Among the startups it backs is Commonwealth Fusion Systems, which is building a new kind of “tokamak” reactor and believes it can demonstrate the feasibility net-positive-energy fusion to power the grid within the next few years. Other portfolio companies at The Engine are tackling thorny problems like reducing food waste, replacing silicon chips with faster photonic ones and building better batteries for grid storage of power from wind and solar installations.

Such ideas have come to be known as “tough tech” because they often need more capital, more time and more expert input to get to market. In this episode, you’ll meet Katie Rae, CEO and managing partner at The Engine, who leads us on a wide-ranging discussion of topics such as:

      • the ways tough tech companies could change the world
      • the causes of government and private underinvestment in these areas
      • the challenges of evaluating and managing tough tech startups
      • the prospect of growing government support for high-risk innovation
      • the reasons why institutional investors who could just as easily put their millions into software-focused venture funds might want to consider tough tech instead.

Rae thinks The Engine can outperform traditional software-focused VC firms — even though its companies face higher hurdles — because their chosen markets are more wide-open and the payoffs could be so enormous. “I don’t think there’s any reason that I should say to my investors, ‘You should expect less of me.’ In fact, maybe they should expect more of me,” Rae says. “And they should also expect that what we invest into, they feel incredibly proud of as well—that they backed a company like that that had impact on the world.”

Chapter Guide

      • 00:09 Soonish opening
      • 00:27 Imagine a Future Where…
      • 01:50 How Venture Capital Lost its Way
      • 03:56 Marc Andreessen’s Change of Heart
      • 04:50 The Engine’s Unofficial Origin Story
      • 06:07 Introducing Tough Tech
      • 06:51 Katie Rae Tells The Engine’s Official Origin Story
      • 08:37 How The Engine Runs
      • 11:18 What Tough Tech Means to Katie Rae
      • 14:17 How The Engine Is Different
      • 16:26 Midroll Message: Support Soonish on Patreon
      • 17:31 The Tough Tech Poster Child: Commonwealth Fusion Systems
      • 24:13 The Case for Public and Private Investment in Tough Tech
      • 27:03 Life Sciences at The Engine
      • 29:46 Overinvesting in Bits, Underinvesting in Atoms
      • 31:33 Shifting the Policy Conversation in Washington
      • 34:20 The Return on Investment from Tough Tech
      • 36:42 End Credits
      • 37:09 The Lonely Palette Goes to Iceland

*[“Soonish” is produced by Wade Roush. Click here for a full list of episodes.]

The views expressed in this post are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

More Episodes

Antoine van Agtmael: Stagflation and Race for Clean High Tech

Atul Singh & Antoine van Agtmael, January 31, 2023

The Hot Mic: Trump Trumped, Looming Recession and India-China Clash

Atul Singh & Christopher Roper Schell, January 11, 2023

As US and China Clash, Taiwan Moves Closer to the Brink of Disaster

Atul Singh & Glenn Carle, August 15, 2022

Serbian City Novi Sad: European Through Culture

Institute for the Danube Region and Central Europe, August 13, 2022

Must Listen

Fair Observer

Joe Biden’s Saudi Arabia Visit to Meet Mohammad bin Salman

Arab Digest, August 12, 2022
Fair Observer

Russian President Vladimir Putin, Syrian President Bashar al-Assad and the Russia-Ukraine War

Arab Digest, August 6, 2022
Fair Observer

India & Japan: Implications of Ukraine on Asia (Episode 2)

Fair Observer, August 3, 2022
Fair Observer

Putin Takes the Middle East and North Africa to the Precipice of Disaster

Arab Digest, July 29, 2022
Fair Observer

Italy, Tunisia and Algeria Form a Mediterranean Energy Treble

Arab Digest, July 22, 2022
Fair Observer

Realpolitik: Implications of Ukraine on Asia (Episode 1)

Fair Observer, July 21, 2022
Fair Observer

Media in the 2022 Kenyan Elections

Fair Observer, July 21, 2022
Fair Observer

Egypt’s Dictator Sisi is Ringmaster of a Near-Bankrupt Circus

Arab Digest, July 15, 2022
Fair Observer, 461 Harbor Blvd, Belmont, CA 94002, USA
Subscribe

Subscribe

Register for $9.99 per month and become a member today.

Subscribe

Publish

Join our community of more than 2,500 contributors to publish your perspective, share your narrative and shape the global discourse.

Subscribe

Donate

We bring you perspectives from around the world. Help us to inform and educate. Your donation is tax-deductible.

Explore

  • About
  • Republish
  • Authors
  • Privacy Policy
  • FO Store
  • Terms of Use
  • FAQs
  • Contact

Regions

  • Africa
  • Latin America & Caribbean
  • Asia Pacific
  • Middle East & North Africa
  • Central & South Asia
  • North America
  • Europe

Topics

  • Politics
  • Environment
  • Economics
  • Global Change
  • Business
  • International Security
  • Culture
  • Science

Sections

  • 360°
  • Video
  • The Interview
  • Podcasts
  • In-Depth
  • Interactive
  • Insight
  • My Voice
  • Quick Read

Daily Dispatch

Designed, Developed and Maintained by Netleon Technologies
© Fair Observer All rights reserved
Fair Observer Education Logo Fair Observer Leadership Academy Logo

    Fill below form to share your concern with us

    *Indicates required field

    BOOKMARK

    Want to save this post?

    Register as a member to support independent journalism and enjoy subscriber benefits.

    BECOME A MEMBER

    NEWSLETTER

    Make Sense of the World

    Unique Insights from 2,500+ Contributors in 90+ Countries

    NEWSLETTER

    Make Sense of the World

    Unique Insights from 2,500+ Contributors in 90+ Countries

    We Need Your Consent
    We use cookies to give you the best possible experience. Learn more about how we use cookies or edit your cookie preferences. Privacy Policy. My Options I Accept
    Privacy & Cookies Policy

    Edit Cookie Preferences

    The Fair Observer website uses digital cookies so it can collect statistics on how many visitors come to the site, what content is viewed and for how long, and the general location of the computer network of the visitor. These statistics are collected and processed using the Google Analytics service. Fair Observer uses these aggregate statistics from website visits to help improve the content of the website and to provide regular reports to our current and future donors and funding organizations. The type of digital cookie information collected during your visit and any derived data cannot be used or combined with other information to personally identify you. Fair Observer does not use personal data collected from its website for advertising purposes or to market to you.

    As a convenience to you, Fair Observer provides buttons that link to popular social media sites, called social sharing buttons, to help you share Fair Observer content and your comments and opinions about it on these social media sites. These social sharing buttons are provided by and are part of these social media sites. They may collect and use personal data as described in their respective policies. Fair Observer does not receive personal data from your use of these social sharing buttons. It is not necessary that you use these buttons to read Fair Observer content or to share on social media.

     
    Necessary
    Always Enabled
    These cookies essential for the website to function.
    Social Media
    These cookies are used to enable sharing or following of content that you find interesting on our website. These settings apply to third-party social networking and other websites.
    Performance & Functionality
    These cookies are used to enhance the performance and functionality of our website. They provide statistics on how our website is used and help us improve by measuring errors. Certain functionalities on our website may become unavailable without these cookies.
    Analytics
    SAVE & ACCEPT