PaperJet Ventures' Investment Thesis 1.0
Investing in Deep Tech/Climate, AI, and SaaS at the earliest stages.
Editor’s note on March 31, 2023 - The syndicate name was changed from Renegade Capital.
In the last post, I announced the launch of my new syndicate, PaperJet Ventures (“PaperJet”), after investing in tech startups for the past two years. Here is my investment thesis in two versions - teaser and extended (which I highly recommend):
Teaser
Innovation drives us forward. Artificial Intelligence (“AI”), semiconductors, and battery tech are not just changing the game but creating a new one. PaperJet seeks disruptors who can transform how we work and move.
We’re interested in Deep Tech/Climate, AI, and Vertical Software as a Service (SaaS).
Deep Tech/Climate
The continuous improvement of battery technology and its declining cost make it a great time to invest in startups that can power up more than just cars.
Self-driving cars, saving energy, and better ways to make things are essential to us. PaperJet wants to work with technical founders with a laser focus on solving fundamental problems holding the industry back and preventing widespread adoptions.
Artificial Intelligence (AI)
Applied AI is transforming the world. With “Copilot for professions,” we can boost efficiency and improve job satisfaction in sectors like finance and law. PaperJet seeks experts with domain expertise to build Large Language Models (LLM)-powered services.
Vertical Software as a Service (SaaS)
In traditional industries, SaaS solutions will improve processes and digitize work. PaperJet searches for founders with experience in the telecom, energy, and natural resources industries.
I recommend reading the following extended version of the investment thesis to learn more.
Investment Thesis 1.0 - Extended Version
PaperJet Ventures invests in Disruptive Innovation at the earliest stages.
Technology breakthroughs such as AI, advanced semiconductors, and battery technology enable and accelerate innovation.
As these technologies continue to evolve and, in some cases, converge, PaperJet is looking for disruptive innovations to transform how we move and work. Here are PaperJet’s three focus areas.
Deep Tech/Climate
The proliferation of Electric Vehicles (EVs) has revitalized the once-stagnant auto industry and propelled it forward. Extensive climate-oriented programs like the Inflation Reduction Act, the global phase-out of fossil fuel vehicles, and strong public support are additional tailwinds shifting the world toward sustainable energy.
The continuous improvement of battery technology and its declining cost curve (as shown below) provide the main catalysts for PaperJet investing in startups that can electrify other major transportation, including aerospace/aviation, marine, and commercial/cargo.
Key players such as Tesla, CATL, LG, Panasonic, and Redwood Materials are making significant inroads in cell design, advanced battery materials, and vertically integrated battery production and recycling.
As 300+ “Gigafactories” are coming online by 2030, the expected economies of scale will drive battery costs downwards in the long term.
PaperJet has some views about solving significant constraints holding the industry back and preventing widespread adoptions.
Accelerate adoptions with breakthrough technologies, including autonomous mobility, next-generation powertrains, electric propulsion systems, energy storage, and charging infrastructure.
Solve current supply chain bottlenecks for crucial components (semiconductors and sensors) and parts through localization & integration.
Achieve faster economies of scale, including volume production, through advanced manufacturing with scalable solutions such as vertical integration & automation.
Reduce the idea-to-revenue/commercialization cycle, and improve visibility to risk and performance with software-enabled solutions.
Increase the knowledge talent pool in the sector.
PaperJet invests in startups looking to solve these problems or provide the necessary infrastructure for other companies to solve them. Not only these innovative startups can disrupt the sector, but they also create a new ecosystem that can revitalize the stagnant manufacturing sector that badly needs innovations.
PaperJet is looking for technical founders with a laser focus on problem-solving who create an agile and execution-first company culture that can attract capital and talent.
Artificial Intelligence (AI)
The rise of Generative AI and Large Language Models (LLM) provides the possibilities of how applied AI can transform our current work.
Github Copilot provides an example of how an AI tool can help engineers become 100x more efficient in creating and deploying code while making their work more meaningful and enjoyable.
AI’s breakthrough has made inroads in healthcare, robotics, and other fields outside of tech.
As these models and their applications evolve, PaperJet wants to invest in “Copilot for professions” in idea-intensive industries such as financial services, accounting, legal, and consulting.
With the correct AI tools, professionals can spend less time on routine activities such as collecting information, analyzing data, or preparing reports. Since these professions have much higher client-facing job requirements, actual work will involve more expertise application, interaction with key stakeholders, and people management. The expected outcome will address these industries’ problems with employee turnover, low job satisfaction, misalignment of pay structure to outcomes/impacts, overhiring, and more.
Given how fast AI is evolving, PaperJet seeks founders with a strong balance of domain expertise, intellectual curiosity, and agility to identify technological shifts to create new opportunities.
Vertical SaaS
Finally, another key focus is vertical SaaS solutions for traditional industries, such as telecommunications, energy, natural resources, and utility. Before any possibility of applied AI in these industries, there is a more significant and immediate need for enterprise SaaS solutions to solve major pain points in their business processes while digitizing knowledge work to enable collaboration and workflow automation.
PaperJet is looking for founders with the right domain experiences within telecom, energy, utility, and natural resources since these industries provide the critical infrastructures that power the startups within our deep tech and AI focus areas.
As these SaaS companies can collect their customers’ proprietary data and train them with the foundational models, their products become more useful with AI-enabled opportunities ranging from workflow automation to valuable analytics and insights.
Final Note
For founders working on interesting problems, especially within those core focus areas, please email me at christopher.j.kong@gmail.com.
If you are an accredited investor interested in angel investing, consider joining PaperJet Ventures.
If you want to learn more or have more questions, please contact me on Twitter.
Thanks to Jen Liao and Jaireh Tecarro for providing valuable insights and reading drafts of this post.
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