This distinction matters because the venture industry spends an extraordinary amount of time debating the price of startups and remarkably little time debating the price of venture capital itself. We argue over whether a company is worth $XX million or $XX+5 million while accepting, with near-liturgical consistency, that the vehicle holding it should conform to some variation of 2/20. The underlying assets may range from a preclinical therapeutics platform in Paris to a robotics company in San Francisco or a crypto business in Dubai. Their capital requirements, timelines and risk structures bear little resemblance to one another. Yet the wrapper remains suspiciously uniform.

At Entropia Capital, we decided to question the wrapper a long time ago, not because the traditional fund structure is inherently defective, but because it was designed for a different investment logic from ours. We invest in frontier companies whose central difficulty is rarely technological risk alone. Their problems sit at the intersection of science, governance, regulation, infrastructure, capital formation and international execution. They are systems businesses, and systems businesses are poorly served by capital that behaves as though the relevant work ends when the wire transfer is completed.

Our response is built around three principles: no recurring management fees, substantial operational involvement, and the active creation of liquidity opportunities earlier in the company’s development. The precise economics can vary with the mandate. The principles do not.

The wrapper eventually shapes its contents

Management fees perform a legitimate function. They finance diligence, reporting, compliance and the institutional machinery required to manage other people’s capital. Serious investing cannot be sustained indefinitely on optimism, deferred compensation and airport coffee.

Yet fee structures also produce organizational gravity. A larger fund supports a larger team; the larger team requires more assets; more assets require larger investments; and the strategy gradually adapts to the institution created to execute it. Fundraising success becomes economically tangible today, while investment success remains provisional, sometimes for a decade. This tension is particularly acute for smaller funds. On a $25 million vehicle, a conventional 2% annual fee represents $500K before legal costs, administration, travel and the expense of maintaining a genuinely international operation. It is enough to reduce the capital available for deployment, but rarely enough to support the institutional platform described in the presentation. Small managers can therefore find themselves in an awkward middle ground: too expensive to function as pure investment partnerships, too small to reproduce the infrastructure of established firms, and under pressure to raise a successor vehicle before the first has returned meaningful capital.

We chose a different constraint. Entropia does not rely on recurring management fees; the investment capital remains as productive as possible, while the operating platform must earn its own living. We don’t see that as a discount, more as a discipline.

An operating company with investment capital inside it

Without recurring fees, operational capability cannot remain a promise subsidized by LP commitments. It must produce revenue, develop an asset or demonstrably improve an investment. Entropiatherefore operates through four connected activities: investment, venture building, venture architecture and ecosystem architecture.

The investment activity provides exposure to asymmetric outcomes in deep tech and frontier industries. Venture building creates companies where fragmented markets do not reliably generate investable ventures on their own. Venture architecture addresses governance, international structuring, strategic finance, recruitment, regulatory positioning and commercial development. Ecosystem architecture uses executive education to build knowledge, relationships and entrepreneurial density around the markets in which we operate.

These are sometimes called “platform services” in venture capital, which can mean anything from a genuine operating capability to a well-designed page on a website. In our case, they must support themselves economically while reinforcing the investment activity. This is less a fund surrounded by services than an operating company with investment capital embedded inside it. The architecture is deliberately uncomfortable. Comfort, in asset management, is not necessarily an investor benefit.

Deep tech operates on several clocks

Deep tech is commonly described as requiring patient capital. This is correct, but incomplete. Scientific and industrial development can be slow. Regulatory approvals take time; manufacturing systems do not scale at software speed merely because their founders have adopted software vocabulary. Biology, in particular, remains wonderfully indifferent to quarterly reporting. Yet a long company-building cycle does not mean every investor must own every share until the final exit.

A frontier company passes through several states of legibility. At inception, it may combine exceptional science with an incomplete team, uncertain regulatory sequencing and a corporate structure assembled by people who have not yet encountered an institutional investor. Several years later, the technology may still be pre-scale, but the company can possess protected intellectual property, credible governance, early customer validation, a coherent financing architecture and leadership capable of absorbing substantially more capital.

The technology remains young. The investment risk has nevertheless changed. We describe this transition as becoming venture-proven before becoming fully market-proven. It is the point at which a technically compelling but institutionally difficult company becomes intelligible to larger venture funds or strategic investors. Our work is concentrated around that transition. We help strengthen leadership, clarify positioning, structure governance, navigate regulatory pathways and connect companies to the geographies most relevant to their development. Depending on the business, European science may need to be combined with Asian manufacturing, Gulf infrastructure capital or American commercialization.

These interventions are not peripheral to deep-tech investing. They determine whether the technology receives sufficient capital and time to mature. They can also create an earlier liquidity boundary.

Ownership duration is not technology duration

Traditional venture often collapses technological duration and ownership duration into a single assumption: invest early, follow the company, and wait for an acquisition or IPO. We prefer to separate the two. Once a company has crossed an important threshold of institutional credibility, some early ownership can potentially be transferred to an investor better equipped for the next stage. This may occur through a strategic transaction, a financing round with a secondary component, a later-stage fund or a partial sale to a corporate partner.

From portfolio value to returned capital

The venture industry speaks reverently about power laws and rather awkwardly about distributions. Paper value is treated as performance with a time delay. Sometimes the delay lasts longer than an undergraduate education, a doctorate and the first several years of the resulting academic career. Yet DPI remains a refreshingly physical metric: capital was invested, and capital came back. IRR adds the equally impolite question of when.

Fragmentation as an investable inefficiency

The model is inseparable from where we invest. Technological capability has globalized faster than venture infrastructure. Exceptional researchers and founders now emerge across Singapore, Paris, Munich, Dubai, Bangalore, Seoul and San Francisco. What remains unevenly distributed is the connective tissue: institutional trust, specialized capital, regulatory fluency, commercial access and cross-border execution. Many frontier companies are overlooked not because their technology is weak, but because they are difficult to parse.

A different specification for the venture product

Rharbaoui argues that a fund is ultimately an expression of its people, strategy, access and accumulated performance. We agree. Venture remains intensely intuitu personae: LPs underwrite individuals exercising judgment in conditions where the data are incomplete and the future stubbornly refuses to resemble a spreadsheet. But if the manager is the product, the economic structure is its specification.

Our specification is relatively simple. Preserve the productivity of investment capital. Sustain the operating platform through activities that create independently recognizable value. Tie the economics primarily to outcomes. Treat liquidity as part of portfolio construction rather than an administrative event at the end of it. The details need not be identical in every situation. A passive minority investment, an intensive company-building mandate and a cross-border restructuring are not the same product; pretending otherwise would replace thoughtful alignment with contractual symmetry.

The model should consequently be judged against three questions:

Does the absence of recurring fees result in more capital reaching companies? Does operational involvement create measurable changes in their quality and investability? Does the portfolio return capital earlier and more consistently than a comparable early-stage strategy?

If the answers are no, the wrapper has failed, whatever its intellectual elegance.

We wanted Entropia Capital to share more of the entrepreneurial condition: to earn revenue before comfort, remain close to execution, create assets rather than accumulate overhead and depend disproportionately on the value we help produce. This is why we describe ourselves as blue-collar investors and operators. The phrase is intentionally inelegant. It implies showing up, performing work that is visible in the result, and accepting that capital alone does not confer usefulness.

The future of venture capital will not be defined by a universal replacement for 2/20. Large institutional funds, specialist partnerships, evergreen vehicles, venture studios and operator-investor platforms will coexist because different risks require different wrappers. But wrappers should express strategies rather than conceal their contradictions.

Ours expresses a particular thesis: investment capital should remain productive; operational capability should justify itself; economics should reflect actual contribution; deep-tech ownership should be managed across distinct risk stages; and geographic fragmentation can be converted from a founder’s burden into an investor’s edge.

A venture fund is indeed a financial product. Unlike an option, however, it cannot be priced from volatility alone. Its value depends on whether the people inside the wrapper can change the trajectory of the underlying assets, and whether, at some point, they remember to return the money.

In the U.S., this tolerance for inefficiency is not cultural indulgence but structural consequence. A single vintage of venture capital can produce hundreds of venture-scale companies, a deep secondary market for talent, and repeated exit cycles within a decade. Failed founders are recycled into new ventures, employees redeploy laterally, and capital is continuously repriced through public markets and late-stage secondaries. Losses dissipate because the system is thick.

Small ecosystems as institutional environments

Small (eco)systems do not enjoy this luxury. The places where Entropia Capital works in Singapore, Dubai, and Luxembourg are not reduced versions of larger ecosystems; they are structurally different environments where venture capital operates less as a market activity than as institutional infrastructure. Talent is imported rather than endogenous, capital is mobile rather than anchored, and exits are predominantly external.

In such systems, venture capital is not merely a participant in innovation, but instead a coordinating mechanism whose failures compound rather than dissipate. The last decade, marked by abundant liquidity and the global diffusion of the “founder-friendly” service model, revealed a critical mismatch: a model designed for abundance was applied to scarcity-constrained systems, producing fragility instead of resilience.

The later emphasis on Singapore reflects its position on a longer innovation arc: roughly thirty years of deliberate policy construction, compared with a decade of accelerated experimentation in the Middle East and a much earlier, finance-centric development path in Luxembourg.

The rise of the service model

The service model, born in the aftermath of the 2008 financial crisis and institutionalized during the era of zero interest rates, reframed venture capital as a form of companionship rather than selection.

Funds increasingly competed not on capital allocation discipline, but on relational proximity to founders. Firms such as Andreessen Horowitz institutionalised the platform model at a moment when U.S. markets were simultaneously deepening (cloud, mobile, fintech) and accelerating. Their services reduced coordination costs in environments where hiring velocity, regulatory exposure, and media narratives were themselves system-level constraints. In deep, liquid ecosystems, this reorientation translated into structurally weaker capital efficiency, i.e., often yielding mediocre risk-adjusted returns for those mimicking the Tier 1 funds without the firepower, while remaining masked by scale, liquidity, and abundant exit optionality.

In small ecosystems, it tends to produce social capture. When everyone knows everyone, governance quickly becomes reputational rather than functional. Boards turn into social equilibria where confrontation is deferred, underperformance is normalized, and capital continues to flow not because probability warrants it, but because relationships do.

Singapore offers a telling illustration: a highly programmatic innovation state, efficient at grant allocation and infrastructure, but ill-equipped to tolerate prolonged private-sector delusion. Over there, service-oriented venture capital, imported wholesale, softened the very discipline the system required most, i.e, leading to companies that survived on signaling and public support long after private markets would have forced correction. It was not naive imitation; it was a rational response to structural gaps. A young startup ecosystem, limited domestic talent pools, and the absence of serial founders meant that early-stage companies required scaffolding that markets could not yet supply. Platform teams, government-adjacent accelerators, and co-investment schemes functioned as ecosystem primers, accelerating time-to-formation rather than time-to-exit.

It is not uncommon in Singapore to encounter Series A or B companies with modest commercial traction, extended public-sector support, and stable venture backing over longer horizons than those typically observed in large private markets. This pattern is best understood not as underperformance, but as a locally coherent equilibrium. When founders prioritize regional consolidation, institutional partnerships, and measured internationalization, persistence becomes a rational outcome. In such settings, continuity of capital and support functions as a stabilizing mechanism while companies mature within a constrained but highly structured environment.

This behavior reflects the specific architecture of Singapore’s ecosystem. The system is particularly effective at company formation, early validation, and institutional coordination, while the pathways to large, absorptive end-markets remain comparatively selective and resource-intensive. International expansion (toward the U.S., China, or major emerging markets) often requires deliberate, stepwise engagement rather than rapid scaling. As a result, many companies optimize for durability and optionality before pursuing aggressive market transitions. The outcome is not stagnation, but a portfolio of enterprises evolving along longer, more deliberate trajectories.

Within this context, the development of service-oriented venture capital can be seen as an adaptive response. In a frictional and still-maturing ecosystem, bundled support, i.e., spanning talent access, regulatory navigation, signaling, and ecosystem coordination, helps reduce early execution risk and compensates for missing market infrastructure. Such models are particularly effective in the formative stages of an ecosystem, where learning curves are steep and institutional interfaces complex. They contribute to system coherence by aligning founders, investors, and public stakeholders around shared operational norms.

As the ecosystem evolves, however, the opportunity shifts toward refining the capital narrative that accompanies this support. Equity structures, financing expectations, and liquidity pathways increasingly benefit from calibration to the realities of constrained domestic markets and multi-step internationalization. Rather than mirroring the timelines and valuation logic of large markets, later-stage companies in Singapore invite models that recognize extended value formation, earlier partial liquidity, and differentiated risk-return profiles aligned with regional and cross-border growth patterns.

Seen through this lens, Singapore’s venture landscape is not a story of misalignment, but of progression. The next phase lies in articulating financing frameworks that explicitly acknowledge the ecosystem’s strengths, i.e., discipline, coordination, and durability, while accommodating the longer arcs required to bridge toward global scale. In small systems, venture capital matures not by abandoning support, but by pairing it with capital structures and equity narratives designed for continuity, optionality, and long-term institutional resilience.

In Dubai, the dominant risk is not over-programming but over-velocity. Capital arrives quickly, often tied to thematic waves (e.g, crypto, Web3, AI) while governance norms reset with each cycle. Founder reverence, combined with rapid deployment, produces companies optimized for narrative timing rather than operational depth.

Luxembourg illustrates the inverse problem: an ecosystem optimized for capital movement rather than company formation. The jurisdiction excels at structuring—fund vehicles, holding companies, secondary transactions—but lacks the entrepreneurial density to sustain narrative-led venture building. The result is often immaculate architecture surrounding insufficient operational mass.

Capital engineering as institutional design

What emerges from these environments is not a call for harsher venture capital, but for more mechanical one. As such, the concept of capital engineering is not a stylistic correction; it is an institutional necessity in small (eco)systems.

Its first principle is that liquidity cannot remain a distant, binary event. Where founders are often expatriates and senior talent is globally benchmarked, early and partial liquidity is not

indulgence. It is retention infrastructure. Recurring tender offers, long treated as exceptional, function in small ecosystems as behavioral stabilizers. They reduce pathological risk-taking driven by personal financial exposure and introduce regular pricing events that puncture internal valuation myths.

In Singapore, tender mechanisms increasingly determine whether second-generation founders remain in the ecosystem or return capital (and themselves) abroad. In Dubai, they counterbalance volatility by anchoring incentives over time. In Luxembourg, they align naturally with a jurisdiction already optimized for cross-border capital flows and secondary transactions. Liquidity, in this framework, is not the end of the venture journey; it is a tool for governing risk along the way.

The second principle of capital engineering is unbundling. The historical bundling of capital, advice, and execution was a convenience, not an economic truth. In small systems, it becomes a distortion. When advice is paid for with equity, founders overpay for generic counsel and underinvest in specialized execution. Platform teams, however well-intentioned, scale poorly across sectors and introduce subtle agency problems, particularly when loyalty drifts toward the fund rather than the company. Fractional executives and market-priced specialists outperform precisely because they restore accountability and alignment.

A Series A company in Singapore does not need a generalized talent platform; it needs a domain-specific operator capable of executing under regulatory and cultural constraints. Dubai’s ecosystem has learned this through repetition: execution imported on demand outperforms standing advisory structures.

Luxembourg’s comparative advantage, by contrast, lies not in building founders, but in engineering liquidity, governance, and distribution, i.e, functions that can be priced, modularized, and exported. Unbundling restores clarity: capital allocates risk, markets supply expertise, and founders regain autonomy without illusion.

Finally, capital engineering requires distance. The most counterintuitive lesson of small ecosystems is psychological. Proximity erodes judgment faster where social graphs are dense. The healthiest investor–founder relationships are not intimate, but legible. Distance depersonalizes allocation decisions, transforming them from social acts into structural ones. Quantitative reserve management, explicit follow-on criteria, and disciplined concentration are not expressions of coldness; they are mechanisms that prevent favoritism, sunk-cost bias, and reputational inertia. In environments where venture capital is implicitly tied to national ambition, this discipline becomes political economy. Funds that allocate based on narrative rather than probability do not merely lose money; they misallocate national optionality. Large markets absorb such errors. Small systems remember them.

We should collectively recognize that venture capital, stripped of the mythology of the last decade, must again resemble infrastructure: quiet, disciplined, and designed for longevity. In large markets, venture capital can afford to be misunderstood. In Singapore, Dubai, and Luxembourg, it cannot. There, capital must be partially engineered (i.e., liquidity planned, advice unbundled, distance preserved) because the system itself depends on it. In small (eco)systems, venture capital is not a lifestyle industry. It is a structural one.

Few countries have invested as systematically in science and technology as Singapore. Over the last thirty years, the city-state has built and heavily supported an elaborate architecture of research institutes, translational centers, public–private laboratories, and state-backed venture programs. The aim has always gone beyond economic diversification. It was about positioning Singapore as a key node in the emerging knowledge economy: a place where frontier technologies are developed, commercialized, and governed — an ambition underwritten by more than SGD 60 billion in public R&D investment since 2006.

This project has yielded undeniable successes, from attracting globally respected researchers to hosting pharmaceutical manufacturing, semiconductor supply-chain nodes, and sophisticated biomedical research infrastructure. Yet the last few years — under the shadow of a global venture capital contraction — have exposed the limits of this approach. The 2024 and 2025 e-Conomy SEA reports point to a slowdown in early-stage venture formation, while PitchBook and Preqin data show multi-year declines in APAC deep-tech fundraising since 2022. In practice, most early-stage deep-tech ventures still struggle to reach meaningful commercial scale. Venture capital firms find it increasingly difficult to raise new capital without leaning heavily on government anchors. Several international players, including biotech-focused funds such as Lightstone and accelerators like Entrepreneur First, have exited Singapore, and few new deep-tech investors or company-builders have emerged in the last five years. And despite the billions invested across successive Research, Innovation and Enterprise (RIE) cycles, the conversion of research outputs into globally competitive firms remains uneven.

What happens when a developmental state attempts to engineer a deep-tech ecosystem under conditions of small-market scale, culturally embedded risk aversion, and a global investment climate that rewards contrarian boldness over administrative excellence? Deep tech, after all, cannot be steered through administrative optimization alone; it depends on contrarian judgment, tolerance for ambiguity, and strategic bets whose payoff may emerge only one or two decades later.

Singapore’s answer, I would argue, requires rethinking not only its instruments of support, but also the intellectual and cultural foundations of its innovation strategy. The country has repeatedly adapted and localised global models to its own context. Building on this tradition, Singapore could now benefit from a deeper commitment to contrarian ideas, policy experimentation, and a more distinctive “national DNA” in deep-tech development — one that does not simply import foreign playbooks, but reshapes them to the realities of a small, open, and strategically constrained economy.

The evolution of Singapore’s innovation system

Singapore’s innovation strategy is still best understood through the lens of the developmental state: long-term planning, a strong public bureaucracy, and targeted investment in priority sectors. This model has proved adaptable. The agencies that once focused on electronics, petrochemicals, and logistics now direct their efforts toward biomedical sciences, quantum technologies, advanced manufacturing, sustainable materials, and AI.

Yet this continuity obscures a significant shift. The original developmental state emerged in environments where governments could discipline domestic firms, shape capital allocation through bank-based systems, and nurture national champions in sectors with clear industrial boundaries. Deep tech does not operate under such conditions. By “deep tech,” we mean ventures grounded in scientific breakthroughs — biomedical platforms, quantum technologies, advanced materials, AI, robotics — where development is capital-intensive, slow, and dependent on specialised talent and infrastructure. Knowledge flows are global, regulatory landscapes are volatile, and competitive advantage now depends less on capex than on learning speed, network effects, scientific interpretation, and global commercial reach.

Singapore’s early deep-tech strategy — visible in the creation of Biopolis, Fusionopolis, A*STAR’s research institutes, and talent-recruitment initiatives — was analytically coherent: build research excellence first, then develop commercialization pathways on the go. Through the 2000s, the country succeeded in attracting leading scientists and building facilities that rival global innovation hubs. Yet commercialization remained modest. Much output from public research institutions translated into publications rather than venture formation, a pattern common in research-intensive systems.

The 2010s marked a shift toward entrepreneurship. A handful of startups — Structo, Horizon Quantum Computing, RWDC — demonstrated the potential for research translation and put Singapore on the deep tech map. Government-backed matching schemes and accelerators expanded the pool of founders. Corporate labs and translational units emerged in partnership with industry, creating new opportunities in medtech, advanced materials, and automation. But despite this institutional expansion, a structural bottleneck persisted: deep-tech startups struggled to scale beyond Singapore and the region, and late-stage capital remained scarce. Zimplistic, maker of the Rotimatic smart kitchen robot, is often cited as a cautionary example. Despite strong demand and more than US$50 million in funding, the company struggled with manufacturing scale, product reliability, and global distribution before ultimately being liquidated. Its trajectory illustrates Singapore’s “home-market handicap”: hardware and deep-tech companies must commercialize globally from day one, without the buffer of a large domestic market to refine manufacturing, iterate with early customers, or stabilize unit economics.

The post-2020 period has intensified the deep-tech agenda, particularly in areas aligned with geopolitical and sustainability priorities. One sees this in efforts to attract cell-therapy manufacturing, build medtech platforms, and develop quantum and photonics capabilities. Singapore has no shortage of novel technologies in the pipeline. What remains elusive is the consistent emergence of firms capable of competing globally at scale.

Structural constraints: scale, culture, and capital

These constraints run deeper than funding levels or program design.

The first is market size. Deep-tech ventures often require extensive testbeds, long regulatory pathways, supply-chain integration, and anchor customers willing to validate early proof-of-concepts. Singapore’s domestic market is too small to generate sufficient early demand for medtech diagnostics, robotics systems, or sustainable-manufacturing innovations. While government agencies sometimes act as early adopters, this cannot replicate the industrial fabric of larger economies. As a result, most successful Singapore-based deep-tech companies (e.g., BiOptic, RWDC) ultimately depended on foreign commercialization environments — an expression of the same home-market handicap noted earlier.

The second is risk culture. Singapore has invested heavily in entrepreneurial education, from university incubators to the NUS Overseas Colleges. But survey data — including the Global Entrepreneurship Monitor and studies by EDB and the Institute of Policy Studies — shows that concerns about financial risk, career disruption, and social mobility remain comparatively high. Deep tech is defined by uncertainty, long timelines, and the possibility of scientific failure. This creates a mismatch between national ambition and individual incentives. Many talented young people still gravitate toward civil service, consulting, or finance rather than high-risk research ventures. The result is a scarcity of founders willing to spend 8–10 years navigating regulation, complex science, and global market development.

The third constraint is capital structure. Seed and Series A funding are relatively well supported through state-backed co-investment schemes, angel networks, and early-stage funds. But many observers note that local deep-tech VCs are still building the capabilities required to underwrite long-cycle ventures. Others have shifted deployment abroad, attracted by denser talent pools or lower perceived risk. Very few local funds have the mandate or LP support to lead substantial Series B or C rounds; Singapore typically sees fewer than five such rounds per year, almost always led by Temasek, global corporates, or overseas investors. As a result, the availability of early institutional capital for genuinely frontier research remains thinner than headline figures suggest.

The limits of an ROI-driven approach to R&D&I

One of the least discussed but most important issues in Singapore’s innovation governance is the increasing emphasis on quantifiable returns: measurable outputs, milestone completion, near-term commercialization metrics. These tools are essential in a system where public funds must be justified. But deep tech does not conform neatly to such logic.

Research translation is inherently uncertain. Many of the breakthroughs that matter — CRISPR, mRNA therapeutics, lithium-ion batteries, photonic chips — emerged from environments that tolerated ambiguity and invested long before commercial potential crystallized. Systems that impose premature discipline risk selecting for incremental improvements rather than transformative innovation.

There is also an unintended behavioural effect. Interviews suggest that some Singapore-based founders calibrated projects around public funding schemes more than global customer needs. Compliance and milestone reporting become central activities. Internationalization is delayed until programs allow it. When public support is generous yet administratively rigid, companies can survive locally while failing to confront global markets.

This is why contrarian thinking matters. An innovation system cannot be managed purely as a portfolio of financial assets. It requires strategic bets on emerging domains that may mature only after a decade, and which conventional ROI heuristics would discourage. Without intellectual elasticity, public policy risks becoming an exercise in administrative optimisation rather than a creative act of nation-building.

Toward a distinct Singaporean deep-tech identity

If Singapore’s first twenty years of innovation were defined by institution-building and the adoption of global best practices, the next twenty demand distinctiveness. The question is not simply how to attract more researchers or fund more startups, but how to craft an innovation identity aligned with Singapore’s unique strengths: geopolitical neutrality, regulatory sophistication, financial depth, and pragmatic governance.

One possibility is to position Singapore as a regional orchestrator rather than a domestic incubator. Many Southeast Asian markets possess the scale, natural resources, and industrial challenges that require deep-tech solutions — agritech in Vietnam, medtech in Indonesia, green materials in Malaysia, and sustainable manufacturing across the region. Singapore can serve as the command center for capital formation, governance, and IP protection for these technologies, even if early deployments occur abroad. Performance Rotors, a Singapore-founded robotics company conducting industrial inspection deployments across Indonesia and Malaysia while keeping its R&D, IP, and governance anchored in Singapore, exemplifies this orchestrator model.

Another avenue is deepening translational partnerships with global industry. Singapore’s strengths in biologics, semiconductors, and specialty chemicals create opportunities for commercial testbeds rather than purely experimental labs. Companies such as Illumina, GSK, and Micron show that Singapore can host sophisticated industrial activity. The challenge is ensuring that startups — not only multinationals — are integrated into these value chains. This may require new regulatory models, procurement frameworks, or shared-infrastructure platforms that reduce barriers for smaller firms.

A related issue is talent accessibility. For deep-tech ventures to scale, Singapore must remain a place where specialised scientific and engineering talent can enter quickly and affordably. Today, the cost and administrative complexity of bringing in such profiles — especially early-career researchers and engineers — can be prohibitive for startups, given rising EP salary thresholds and the administrative burden of COMPASS evaluations, which often disadvantage junior hires who do not yet meet experience or salary benchmarks. Easing this bottleneck, without compromising standards, would materially enhance Singapore’s attractiveness as a deep-tech hub.

Most crucially, Singapore must cultivate a leadership ethos within its innovation agencies that values contrarian ideas, tolerates uncertainty, and resists emulating foreign models. The world’s successful deep-tech ecosystems — from Boston’s biotech cluster to Israel’s defence-driven innovation and Denmark’s life-science specialization — did not emerge from copying others. They articulated contextually grounded identities. Singapore must decide what its own contribution to global deep tech will be: quantum governance, sustainability technologies for tropical megacities, advanced neurodiagnostics, next-generation manufacturing, or something yet undefined.

A system optimized for administrative excellence will produce competent incrementalism. A system that allows space for contrarian thinkers — scientists, founders, policymakers — will produce transformative breakthroughs.

Leadership beyond efficiency?

Singapore remains one of the world’s most capable innovation states. Its achievements in building a deep-tech ecosystem from almost nothing are remarkable. Yet success has created its own expectations and weaknesses. The global venture-capital winter did not cause Singapore’s challenges; it illuminated them.

For Singapore to thrive in the next era of deep-tech competition, it must resist treating innovation as an efficiency exercise. The deepest questions are not administrative but philosophical: What risks is Singapore willing to take? What form of national identity should its innovation system express? And what kind of contrarian leadership will champion ideas that defy the neat logic of spreadsheets and ROI models?

Deep tech rewards courage, patience, and clarity of purpose. Singapore has these qualities in latent form; the task now is to bring them to the center of its innovation strategy. The country must move beyond adaptation and articulate a model that is not only effective but original: a deep-tech identity shaped by Singapore’s own complexity and ambition. The opportunity is simple: to build a deep-tech identity only Singapore could create.

Originally published on Asia Tech Lens on November 26, 2025.

Then came the pandemic. What should have been a pause became an acceleration. Lockdowns digitised everyday life, drawing a decade of adoption into two years. The flood of quantitative easing in the United States and Europe poured into global venture markets, inflating valuations from Singapore to Jakarta. Funds that had once hesitated to cross the Pacific now deployed aggressively, chasing category leaders at multiples once reserved for Silicon Valley.

Between 2020 and 2022, Southeast Asia experienced its own “golden years”: Grab’s listing on Nasdaq, Sea Group’s extraordinary rise, and record-breaking rounds for startups from logistics to fintech.

By mid-2023, the cycle turned. Inflation returned, rates rose, and liquidity receded as quickly as it had appeared. The region entered its first true venture winter, one not defined by crisis, but by sobriety. The exuberance of the previous years had built infrastructure, talent, and legitimacy; it had also revealed how fragile the underlying economics remained.

Funding slowed, valuations corrected, and many “regional champions” found themselves over-extended. Yet what looks like a contraction is actually a reordering: capital, talent, and ambition are rediscovering proportion. The structure of venture capital in Asia is being rewritten not by crisis, but by clarity.

The capital cycle reveals who was swimming naked

Every downturn separates those who live off fees from those who live off performance. Large LPs are redrawing their maps worldwide. In the first phase of this correction, most retreated toward the safety of scale, i.e., channelling capital into a few global megafunds whose brand and infrastructure offered predictability. That phase has largely played out. More recently, a second movement has begun: capital is trickling back toward smaller, early-stage vehicles whose alignment, cost discipline, and hunger for alpha now stand out against an industry still digesting its excesses.

Between these two poles lies a fragile middle. Funds in the US$200–500 million range (large enough to collect fees but too small to influence outcomes) face the hardest reckoning. In Southeast Asia, where most exits still fall below US$100 million and IPO windows remain closed, their economics simply do not work. At Tin Men Capital’s recent annual gathering in Singapore, several managers acknowledged the new reality: survival will depend on specialisation, not scale.

A new allocation logic is taking shape

The next decade will not reverse this polarisation; it will deepen it. Globally, megafunds will continue to expand, raising ever-larger pools and shaping markets from afar. Their exposure to Southeast Asia will remain selective, focused on a handful of Singapore-based or cross-border companies that fit within global growth theses. This capital will continue to anchor late-stage rounds and provide occasional liquidity, but it will not define the region’s venture fabric.

At the other end of the spectrum, small, agile funds are finding new room to manoeuvre. They can experiment with fee structures, syndicate models, or sharply verticalised theses; they can operate close to founders and local markets in ways global capital cannot. For them, scarcity is not a weakness but a discipline. They are the ones living off the carry, not the management fee, rather builders of conviction rather than distributors of capital.

Between these poles lies a narrow corridor where regional mid-sized funds must either reinvent their model or fade. The question is not one of size, but of incentive: who is structurally motivated to create real performance rather than perpetuate fundraising?

Southeast Asia’s constraints have become its strengths

If capital is bifurcating, the region’s structure helps explain why. Unlike the United States or China, Southeast Asia does not offer a seamless, billion-dollar domestic market. It is a mosaic of ten economies, each with distinct regulations, consumers, and currencies. That balkanisation discourages pure-scale strategies but rewards depth of expertise.

Sector knowledge now compounds faster than capital. Funds that specialise (in climate tech, logistics, healthcare, or fintech infrastructure) find proprietary deal flow where generalists see noise. Frontier technologies like AI or robotics may struggle to find exits beyond a handful of global acquirers, but sector-focused companies enjoy multiple paths: regional corporates, family conglomerates, or trade buyers.

Meanwhile, the quality of founders has improved. Corporate layoffs and global realignments have pushed seasoned operators to build their own ventures. Talent once lost to the Bay Area is returning to Singapore, Kuala Lumpur, and Bangkok. With fewer speculative investors, the ecosystem feels smaller, but also more serious.

The invisible hand of recalibration

Sovereign giants like Temasek and GIC illustrate the shift. Both have scaled back direct early-stage exposure, opting instead for fund-of-funds and co-investments, often outside the region. Their retreat leaves room for a new generation of local GPs, funds that can read the market in its own dialects and operate at founder speed.

The story, then, is not of retreat but of realignment. Capital is concentrating where it is most efficient, while creativity migrates to the edges. The next wave of Southeast Asian tech will emerge from this tension: between the institutions that industrialised venture and the craftsmen now rediscovering it.

Toward an age of proportion

Booms celebrate scale; winters reward proportion. Southeast Asia’s next cycle will be defined by the interplay of three forces: capital, reorganised and polarised; craft, rediscovered by smaller funds and founders; and constraint, the structural feature that forces both to become smarter.

If the last decade was about building the region’s digital foundations, the next will be about refining them: less rush, more resilience. In the long run, that may prove to be Southeast Asia’s most valuable innovation of all.

Photo by CJ Dayrit on Unsplash

Too often, something is called “venture building” out of convenience rather than conviction. In theory, the model promises to make innovation less risky by creating startups with better access to capital, talent, and distribution. In reality, many players emphasize the building aspect — staffing teams, producing slide decks, and launching barely proven minimum viable products — without anchoring their efforts in a coherent and validated venture thesis. This has been prevalent among the first generation of venture builders, that have been driven by corporations, agencies, and consultancies. With this group, process often replaces conviction, and volume of ventures stands in for substance. Often, the result is companies scale before they should.

There has to be a better way for Southeast Asia to do venture building.

What “building” really means

If venture is the bet, building is the work. But what constitutes building in this region can vary dramatically.

In traditional tech startups, it could focus on distribution and user acquisition — think consumer tech like Carousell or Grab. In deeptech startups such as Eureka Robotics, building might mean structuring intellectual property partnerships with universities and navigating grant regimes. In legacy sectors, it involves orchestrating value chains, regulatory approvals, and often offline infrastructure. Agritech startups like FlyLab or the late eFishery are good examples.

Building is not a uniform process, so it must be adapted to the sector, regulatory context, and local talent base. This is why the copy-paste model of Western venture builders often fails to deliver results in Southeast Asia.

Building here means starting with venture logic rooted in local realities. Southeast Asia’s challenges are acute due to its diversity: It has 11 countries with distinct languages, currencies, regulatory regimes, and stages of institutional maturity. For instance, launching a fintech product entails navigating entirely different licensing, data, and compliance frameworks in Singapore, Indonesia, and Vietnam. Infrastructure gaps are equally pronounced: What scales easily in Malaysia’s capital Kuala Lumpur is probably unviable in rural Myanmar.

Unlike China, where centralized policy enables top-down industrial scaling, or the US, where regulatory uniformity and capital liquidity create smoother pathways to market, Southeast Asia requires hyperlocal orchestration. In this region, a venture builder’s success depends not just on capital and playbooks but also on local networks and the ability to adapt operating frameworks to each geography.

Emerging models

Three types of venture builders have taken root in Southeast Asia, each shaped by structural constraints and internal logic.

First, a new class of corporate venture builders is operating alongside large enterprises. When executed well, these builders can unlock proprietary access to distribution, data ecosystems, and expertise, offering startups a formidable advantage. As always, they strive to avoid common pitfalls, such as unclear mandates and limited founder autonomy. Currently, promising examples include SC Ventures (backed by global bank Standard Chartered) and Engie Factory (backed by the French utilities giant Engie).

Both use their parent companies’ ecosystems while operating with semi-independent roadmaps and governance structures, giving them strategic alignment and entrepreneurial agility. But time will tell whether they can consistently survive three to four-year corporate cycles without being swallowed or shut down by their parent.

The second type comprises self-run studios and accelerators that have survived the funding winter. Wright Partners, Creatella Ventures, or Origgin’s Venture represent independent studios, though most had to scale down or seek complementary opportunities elsewhere.

Those are complemented by Antler, Iterative, and SDTA, which offer founder-centric, process-driven acceleration models underpinned by dedicated venture funds. Acting as institutional co-founders, they embed rigor into ideation, validation, and go-to-market phases, while providing structured support systems such as shared services, founder communities, and pre-seed capital. Their long-term success, however, hinges on attracting top entrepreneurial talent and maintaining thematic clarity. In Southeast Asia, where talent is scarce and fragmented, the accelerator model is a high-stakes, winner-takes-most game. Only those with integrated investment arms or diversified revenue streams tend to endure

The third type is a more emergent category that includes what I call mission-aligned activators, which are generally backed by private equity players. They launch ventures in sectors with high regulatory or infrastructural complexity, like climate resilience, digital health, or industrial transformation. These builders often deliver durable outcomes by working with policymakers, research institutions, and investing in parts of the ecosystem that struggle to attract capital. Wavemaker Partners kickstarted Wavemaker Impact to target climate initiatives while Temasek-backed Xorazeroes in on deep tech.

Unlike corporate venture builders that serve a parent company’s larger goals, these players are externally focused, focusing on systemic change and a multipartner approach.

Embrace change

Venture builders still have a critical role even as Southeast Asia moves from success defined by blitzscale metrics to resilience, early profitability, and long-term relevance. They serve as institutional co-founders, capable of accelerating early traction, offering operational support, and facilitating ecosystem integration.

Photo by CHUTTERSNAP on Unsplash

Yet their contribution must also be calibrated. A venture builder is not simply an enabler: It holds equity in the startups it launches, and its involvement must evolve alongside the company.

To be truly effective, a venture builder must weigh its value over time — what its contributions are, and when and how they are recognized. Short-term formats, whether fixed-term accelerators or sprint-based incubation programs, often fall short of what deep venture building requires. Building a company is a multiyear arc, not a three-month exercise.The transition from de-risking to scaling is particularly delicate. In the early stages, the builder’s presence can be immensely valuable, helping de-risk a new technology, determine a go-to-market hypothesis, or secure early capital.

But as a startup matures, that hands-on support can shift from helpful to heavy-handed, limiting agility and founder autonomy. Without a clear plan for evolving roles and incentives, builders risk becoming a bottleneck. This has implications for governance, liquidity design, and incentive structures. Builders and founders must jointly plan how equity, cash contributions, and strategic alignment will be reevaluated.

In many cases, the builder must transition from co-pilot to board-level enabler, or even exit entirely to make room for growth capital. Navigating this change transparently is crucial not only for startup success but also for the sustainability of the venture-building model.

Builders with skin in the game

Too many venture builders in Southeast Asia focus on short-term, quantitative outputs: startups launched, cohorts completed, or demo days hosted. But counting founders or pitch decks is not the same as building durable companies. The region needs builders focused on medium-term, qualitative outcomes: those who co-own risk with founders and commit to the long haul. This means corporations must evolve to see venture building as more than a PR play. It is a long-term strategy that requires internal alignment, talent autonomy, and incentive symmetry.

Similarly, government and development actors must recognize the value of venture builders in frontier markets, particularly in climate, health, and infrastructure tech. The emerging generation of builders must be as diverse as the challenges they tackle. They must operate as orchestrators, not just operators, and be measured not by the number of startups launched, but by how many durable ventures they help create.

If we can get this right, venture building will not just be a buzzword, but a foundational lever for Southeast Asia’s inclusive growth.

Originally published at https://www.techinasia.com on July 23, 2025.

Traditional venture capital has struggled with deep tech because of its long time horizons and high risk-to-reward ratio. Many investors still hesitate to back projects that require a decade of development before seeing meaningful revenue. Meanwhile, solo founders often lack the infrastructure and strategic connections needed to scale their innovations beyond the lab.

The startup studio model

This is where startup studios provide a solution. By building companies from the ground up, startup studios reduce risk, accelerate execution and optimize the startup journey through structured venture creation, pre-established networks and hands-on support. This model has already proven its efficiency in sectors like biotech and advanced manufacturing.

A growing number of deep-tech hubs are recognizing the value of startup studios. In Southeast Asia, for example, deep-tech investment has grown, yet many startups continue to struggle with cross-border expansion and industrial integration. By aligning corporate resources, academic research and venture-building expertise, startup studios offer a structured solution to bridge gaps and help technologies reach commercialization faster.

Privileged access

The defining characteristic of successful startup studios is privileged access-unique resources, networks and opportunities that are difficult for traditional startups to obtain. In deep tech, this can shorten development timelines and reduce inefficiencies.

Another significant advantage studios offer is early access to industrial and technology partnerships. The path to commercialization in deep tech requires collaboration with tier 1 players in manufacturing, supply chains and regulatory bodies. Without these connections, startups face bottlenecks in prototyping, production scaling and certification processes. Studios pre-negotiate industry partnerships, ensuring portfolio companies can integrate into existing value chains.

Another crucial dimension of privileged access is capital efficiency and early-stage funding acceleration. Many deep-tech startups face the challenge of securing long-term capital while still in the pre-revenue phase.

Studios solve this by injecting their capital early on and streamlining the fundraising process through pre-vetted investor networks and strategic co-investors. This model enables startups to spend more time on execution and less on securing funding rounds. The ability to offer early access to corporate buyers, government-backed financing and alternative funding sources also ensures studios can provide capital beyond traditional VC constraints.

The venture studio playbook

Studios engineer ventures through an adaptive, portfolio-driven strategy. One critical advantage of the model is the ability to kill ideas early and repurpose assets. In a traditional VC-backed startup, failure often means complete shutdown, but studios own a majority stake in their portfolio companies and can quickly pivot underperforming teams into new projects. This increases capital efficiency. The biotech firm Recursion Pharmaceuticals, for example, pivoted multiple times before refining its AI-driven drug discovery model, ultimately securing major partnerships.

Cross-border expansion is another area where startup studios shine. In deep tech, scaling internationally is often a necessity due to fragmented regulatory landscapes and supply chain dependencies. Many investors view international expansion too early as a risk, but in reality, I’ve found deep-tech startups must establish a global footprint from day one. Studios mitigate the risks of premature expansion by pre-building strategic entry points in key markets.

Studios also redefine the founder-equity model. While traditional startups allocate large equity shares to individual founders early on, studios operate differently. Typically, they retain 30% to 60% ownership in their portfolio companies, with founder equity structured to align incentives over time. This ensures that startups remain capital-efficient while attracting talent through salary security, access to pre-built operational teams and lower personal financial risk for entrepreneurs.

Challenges of the startup studio model

While startup studios offer a highly structured approach, there are challenges. One drawback is the high capital intensity required to sustain R&D cycles. Deep-tech ventures often require years of investment before commercialization. This puts financial strain on studios, especially if they rely on short-term capital structures. To address this, studios can diversify their funding sources, leveraging hybrid financing models that include government grants, corporate partnerships and patient capital from specialized investors.

Another challenge is talent alignment and founder autonomy. Since studios retain a significant equity stake, some experienced entrepreneurs may feel constrained by reduced ownership and decision making power. To attract top talent, studios can offer structured incentives, including long-term equity vesting, milestone-based bonuses and the ability to co-lead spin-offs. Aligning incentives through phased equity distribution ensures both founders and the studio remain committed to the venture’s success.

Finally, scaling across regulatory barriers remains a key difficulty in deep tech. Different regions have varying approval timelines, compliance requirements and infrastructure readiness. A solution here is for studios to pre-build regulatory playbooks and partnerships with policymakers, ensuring they can anticipate compliance hurdles and accelerate approval processes in multiple jurisdictions.

What’s next for startup studios?

As governments and investors seek more effective ways to accelerate deep-tech commercialization, studios are likely to play a larger role in shaping innovation ecosystems.

One emerging trend is the rise of corporate-backed startup studios, which integrate existing industrial ecosystems to de-risk venture building. Corporate venture studios allow large industrial players to test and spin out new deep-tech solutions while leveraging their infrastructure, supply chains and customer networks.

Another trend is the evolution of hybrid funding models. Traditional VC structures are often ill-suited for deep tech, but startup studios are pioneering alternative financing approaches, combining venture capital with government-backed grants, sovereign wealth funds and industry co-investments. These hybrid models provide deeper capital reserves and allow for longer development cycles without excessive dilution.

Finally, the talent equation is changing. Many serial entrepreneurs who previously built companies from scratch are now choosing startup studios over solo ventures. Studios provide a compelling value proposition-offering founders a pre-assembled team, operational infrastructure and financial stability from day one. This shift is already evident in North America and Europe, where some entrepreneurs are now building through studios rather than traditional VC-backed pathways.

As the deep-tech revolution unfolds, startup studios are an efficient and structured way to build companies. For founders, investors and policymakers alike, I think the question is no longer if startup studios work-but how to leverage them for maximum impact.

Originally published at https://www.forbes.com on March 25, 2025.

Over the past decade, I’ve worked at the intersection of deep tech investing, corporate innovation and startup acceleration, advising and co-building technology ventures across the U.S., Europe and Southeast Asia. I’ve seen firsthand how data infrastructure and operational control are becoming essential tools for private market outperformance.

Why Roll-Ups Are Ripe For AI

Roll-ups, where investors acquire and consolidate smaller businesses in fragmented sectors, have long been a private equity favorite. They can deliver efficiencies through scale, help negotiate better contracts, centralize functions and ultimately allow the group to be sold at a premium.

But executing a roll-up is hard. It requires deep market knowledge, relentless due diligence and seamless post-deal integration. That’s where AI is rewriting the playbook. Modern AI systems can crawl thousands of databases, parse regulatory filings and analyze web content to surface ideal acquisition targets using natural language processing. Machine learning models can flag customer churn risk, uncover margin levers and benchmark operational key performance before a term sheet is signed. After closing, AI can help facilitate faster onboarding, workflow automation, supply chain optimization and digital transformation across units.

This is no longer theory. Thrive Capital, an investor behind OpenAI and Stripe, has been fundraising for Thrive Holdings, a $1 billion permanent capital vehicle to acquire and operate “everyday” businesses, including homeowner associations and accounting firms, with AI as the operational backbone. The idea is to use algorithms and automation to drive improvements in margins and service across legacy sectors. And Thrive isn’t an outlier. This playbook builds on a proven model seen in industries like dental chains and plumbing services: Standardize systems, share overhead and scale intelligently. What’s new is that the engine now runs on code.

The Acceleration Of AI In Private Equity

AI in private markets may seem recent, but the data revolution has been gaining steam for decades. In the early 2000s, quantitative hedge funds like Renaissance Technologies led the way (paywall). Private equity generally followed with caution until firms like Two Six Capital began using data science to evaluate portfolio companies. Two Six participated in more than $27 billion worth of deals using these analytics. The pace accelerated in the 2020s, with some studies indicating that firms investing in data science capabilities outperformed their peers (paywall), highlighting a link between analytics and business success.

One example is Paris-based Jolt Capital, which developed Jolt.Ninja, an AI platform that’s been in use since 2016, according to the platform’s website. It scans the web to spot under-the-radar investment opportunities in tech firms. It tracks patent filings, executive shifts, market sentiment and financial signals, which can offer an edge in sourcing and diligence, particularly in Europe’s fragmented deep tech landscape. Another example is EQT, also in Europe, which uses its internal AI engine, Motherbrain, to help source investments.

Shaping Long-Term Plays

The other major trend I’m seeing reshape private markets is the rise of permanent capital vehicles (PCVs), investment structures without fixed exit deadlines. In my view, their popularity is likely increasing thanks to their compatibility with operationally intensive strategies like AI-led roll-ups. Traditional funds must return capital in seven to 10 years, in my experience. PCVs allow firms to take the long view, reinvest gains and build durable, cash-generating businesses over decades. It’s a model tailor-made for transformations that take time, like deploying AI across dozens of acquired companies.

Sequoia Capital helped pioneer this approach (paywall) in 2021 by launching The Sequoia Fund, a structure designed to hold public stocks indefinitely. Instead of being forced to exit positions in winners after an initial public offering, Sequoia now retains long-term upside and strategic optionality. Andreessen Horowitz took a similar approach in 2023 with its a16z Perennial Venture Capital Fund.

No public tally exists for how many firms run PCVs, but I’m seeing the trend accelerating. From my observations, top-tier firms with operational muscle and AI ambitions are increasingly choosing flexible timelines over forced exits.

Capital Meets Code: A Strategic Convergence

Together, AI-powered roll-ups and permanent capital vehicles signal a structural shift in how investment firms deploy capital and build value. I believe the boundary between late-stage venture and traditional private equity is fading, as operational control becomes the new priority. Firms are hiring engineers as core team members, building proprietary tooling and behaving less like investors and more like operators. A new class of fund is emerging: They aggregate assets, standardize them with AI and create long-term cash flow engines.

To me, this means the competitive edge is increasingly found in the data stack. This isn’t a tactical update; it’s a redefinition of what happens after the deal closes.

For other firms looking to adapt to these shifts, start by embedding technical talent—such as data scientists, machine learning engineers and AI product leads—into your core deal and operations teams. Second, consider piloting internal tools that can track portfolio performance, not only financially but also operationally, and layer in data streams that surface risks and opportunities in real time. I believe those who adapt could not only see better internal rates of return but also build a compounding, self-improving edge that defines the next generation of value creation.

At Entropia Capital, which also operates in the US and Europe, we’ve seen this shift firsthand: fewer IPO ambitions, more capital-efficient startups, and leaner funds deploying smarter capital. The era of blitzscaling on cheap money is over, and that’s a welcome evolution.

The Silicon Valley mindset, which depends on a culture of experimentation and risk-taking to drive innovation, sparked much of Southeast Asia’s early tech momentum. While strong ties to the Bay Area still matter, the region no longer needs to emulate Silicon Valley to thrive. Instead, it needs a venture model tailored to its unique markets.

Building consistently and pragmatically

Tariff tensions are once again rippling through global markets. US President Donald Trump’s sweeping tariffs are affecting everything from ecommerce rollup firms that sell primarily to the US to private equity firms now struggling to achieve exits.

In Southeast Asia, the impact is particularly acute. In our discussions with founders and operators across Southeast Asia, a common reality is emerging. Whether it’s supply chains, logistics costs, or shrinking runways, the sentiment is consistent: Macroeconomic pressures are mounting.

This convergence of inflationary input costs, tariff-driven trade friction, and tightened capital flows is hitting the region’s innovation ecosystem at a pivotal time. Many startups are reaching critical growth stages and seeking sustainable, capital-efficient models to navigate forward.

See also: $60m bet says Southeast Asia won’t mind being watched by AI

Additionally, Southeast Asia’s VC scene faces a hard reckoning after the boom of the past decade. While the region raised US$34.1 billion in capital in 2021 it saw relatively few exits. Many startups have raised ambitious rounds with the hope of listing or attracting global buyers, only to discover that Southeast Asia still lacks the liquidity depth and IPO culture of markets like the US.

Compared to US$38.92 billion in the US, only US$2.66 billion in IPOs were recorded in 2024 between the main exchanges in Singapore, Thailand, Malaysia and Indonesia. In truth, most investors and founders were aware of these structural limitations. Still, there was a widely shared belief that a dramatic shift could occur, driven by a maturing ecosystem and regulatory reforms. While Singapore’s SGX is modernizing, local public markets remain small and cautious. As such, the hoped-for transformation has yet to materialize.

One founder we advised recently declined a series C round, recognizing that earlier valuations had set unrealistic expectations. The dangers of inflated valuations during and after Covid have been discussed for over two years, but their consequences are now visible.

A better kind of regional startup?

Tech in Asia data shows there are 38 firms in Southeast Asia worth at least US$1 billion, but according to Tracxn, the region has more than 120,000 startups. The reality is, most Southeast Asian startups won’t become unicorns. But I believe the region is more suited to grow a different kind of company: the so-called zebras. The term was coined in 2017 by social entrepreneurs Jennifer Brandel and Mara Zepeda. As capital-efficient ventures that prioritize sustainable growth, zebras can create real value within five to seven years through steady growth, profitability, and lasting relevance. In Southeast Asia, these include materials science firm Nanolumi, automation startup Eureka Robotics, and fintech player Funding Societies.

These are not moonshots — they’re meaningful and gaining momentum. Funds like Tin Men Capital and Iterative have championed this approach for years. Today’s most thoughtful founders aren’t just raising funds; they’re choosing capital partners aligned with their realities and long-term goals. This shift is reshaping the region’s startup mindset.

The next wave of founders will focus on early value, cash generation, and sustainable growth. They may not make headlines every month, but they’re essential to Southeast Asia’s future. Rather than chase Silicon Valley’s power-law model, where a small number of investments account for the vast majority of a VC’s returns, many financiers are now calling for Southeast Asia to embrace a more grounded strategy: frequent, smaller exits through strategic M&A.

Japanese and Korean firms have led the way. For example, NTT Dataacquired Malaysia’s GHL Systems, Tripla bought Singapore’s BookandLink, and Persol Asia Pacific snapped up Workmate. Osaka, Seoul, and Tokyo are increasingly important hubs for M&A activity — destinations better aligned with Southeast Asia’s stage of development than the Nasdaq.

Bloomberg data shows the value of M&A activity involving South Korean firms rose 60% year on year in 2024 to US$29 billion, while Japan M&A volumes increased around 20% in the first half of 2024 compared to the year prior. Still, acquisition motivations remain narrow. Most deals still focus on expanding customer bases and market presence, rather than acquiring advanced technology or specialized talent. I hope this will evolve, positioning M&A as a key driver of regional consolidation, capability-building, and ecosystem growth.

Rethinking fund size and strategy

The latest US tariff regime is a reminder of Southeast Asia’s exposure to global macro risk. It seems clear that the region must accelerate its journey toward greater self-reliance. Collaboration among ASEAN economies — i.e., harmonizing trade, technology standards, and capital flows — will be critical to minimizing external shocks. Initiatives like the ASEAN Economic Community offer a starting point, but the region could learn from Europe’s more ambitious efforts, such as the Capital Markets Union, to build frameworks that allow capital and innovation to flow freely across borders.

See also: Can one upcoming IPO transform Thailand’s tech ecosystem?

The Capital Markets Union shows the value of coordinating financial regulations to lower barriers for cross-border investment and boost market confidence. ASEAN could also benefit from stronger regional oversight to synchronize these efforts, as seen with the European Securities and Markets Authority.

Meanwhile, VC models must also evolve. Emerging managers deploying vehicles worth US$30 million to US$60 million are better positioned to generate attractive returns than larger funds chasing unicorns.

A call for self-reliance

Governments are critical in shaping Southeast Asia’s innovation landscape. Singapore offers a blueprint with initiatives like startup venture debt, SGX reforms, and programs like the Global Innovation Alliance. More can be done, however, especially in backing emerging VC managers, incentivizing M&A, and supporting realistic US$50 million to US$200 million startup outcomes. Policymakers must also recognize that ecosystems take time to mature. Building regional capital stacks, boosting R&D, and retaining local and international talent require patient, consistent effort.

Yet a deeper cultural challenge remains. Despite progress, being a founder in a Southeast Asian market like Singapore still lacks the prestige found in the US, Europe, or China. Singapore’s structured education system and comfortable corporate safety net reduce the appetite for entrepreneurial risk. A 2024 JobStreet survey found that 72% of Singaporeans stay in outgrown roles for over a year, reflecting cultural hesitation to embrace the uncertainty and ambition that startup life demands.

Too often, investors overlook local ventures in favor of US startups, missing the talent and insights within their own ecosystem. Until this mindset shifts, Southeast Asia risks underleveraging its greatest asset: entrepreneurs. Capital avoids friction, and without a more cohesive, founder-friendly environment, the region may lose its best innovations.

If Southeast Asia can adopt a VC model aligned with its economic fabric, it could unlock a decade of inclusive growth. By connecting capital with reality, empowering pragmatic builders, and fostering regional collaboration, we can move from promise to performance.

Originally published at https://www.techinasia.com on May 28, 2025.

I believe the answer lies not in importing blueprints from Silicon Valley or China but in developing a homegrown strategy—one that can transform Southeast Asia’s constraints into advantages and help build innovation systems suited to its economic and cultural realities.

Harnessing The Region’s Diverse Capabilities

This approach starts with recognizing the distinctiveness of the region’s environment. Southeast Asia is largely seen as fragmented due to its eleven countries, multiple languages and legal systems, and uneven levels of economic development. But that same fragmentation can become a source of strength. It offers startups an opportunity to design for diversity, build for complexity and scale through modularity.

Instead of assuming a uniform addressable market, companies can utilize capabilities across borders—for example, engineering talent in Vietnam, design and operations in Indonesia or regulatory expertise in Singapore. In my experience, these distributed models aren’t bugs—they’re features.

Equally important is the region’s positioning at the crossroads of global tech powerhouses. Southeast Asia stands out as one of the world’s most promising regions for sustained economic growth over the coming decade, fueled by a young population, increasing digital penetration and rising middle-class consumption. In consumer tech, this creates a fertile ground for experimentation—where the influence of both U.S. and Chinese platforms meets local consumption patterns shaped by social commerce, mobile-first behavior and informal sector dynamics. It’s a region where platforms must adapt quickly and build with cultural nuance, not just engineering horsepower.

Understanding The Nuances For Deep Tech Startups

But while consumer tech thrives on scale and network effects, deep tech demands a different strategy. The commercialization of climate tech, biotech, advanced materials or robotics doesn’t move at the speed of viral user growth. In my experience, it depends on long-term partnerships, infrastructure, access to industry and regulatory pathways.

This is where Southeast Asia’s infrastructure-building momentum can provide business leaders with a unique advantage. Across Vietnam, Indonesia, Malaysia and the Philippines, governments are investing heavily in energy systems, logistics, agriculture modernization and digital infrastructure. These efforts create a ready landscape for startups that can plug into national priorities and deliver homegrown solutions—not abstract tech for global markets, but tangible systems aligned with regional development.

There’s an opportunity here to leapfrog—not necessarily in creating novel technologies but in deploying them faster, closer to the ground, and in ways that solve critical bottlenecks. For example, if you’re a leader of a deep tech venture in a sector like renewable energy, water management or health diagnostics, aligning with government agendas and industrial transformation efforts can allow you to scale by building with and for the system. This is a different type of innovation playbook: less about disruption, more about integration.

To make this model work, Southeast Asia must also embrace a culture of strategic trade-offs. Not every trend or imported model from more mature ecosystems is worth pursuing. The region may not be ideal for funding mega-rounds or sustaining capital-intensive moonshots with long exit horizons. Yet I believe that this constraint, far from being a weakness, can serve as a catalyst for building smarter and more sustainable.

How Business Leaders Can Seize The Region’s Next Wave

If you are leading or investing in innovation in the region, don’t focus on chasing speed or inflated valuations; rather, cultivate ventures designed for capital efficiency, close-to-revenue business models and real market deployment. Success in Southeast Asia may be less about exponential scaling and more about embedding innovation into tangible systems grounded in the economic and social realities of the region.

At the ecosystem level, coherence matters more than isolated victories. Policymakers and investors alike can make a critical difference by supporting the connective tissue that allows innovation to thrive: education pipelines aligned with industry needs, procurement programs that open pathways for emerging companies, regulatory frameworks that enable responsible experimentation and cross-border standardization efforts that make regional scaling viable.

As a business leader, your engagement in these scaffolding efforts can be transformative. There are a number of ways you can help strengthen the broader system while advancing your own strategic interests. For example, consider investing in applied R&D, participating in industry consortia, collaborating with educational institutions to shape curricula and/or supporting cross-border partnerships.

Singapore’s two-decade-long journey beyond financial intermediation—through sustained investment in semiconductors, AI governance and sustainability technologies—is a signal of what long-term commitment can achieve. Vietnam’s ambition to emerge as a high-tech manufacturing hub, Malaysia’s industrial transformation roadmap and Indonesia’s sweeping energy transition plans all offer similar anchor points where private sector leadership can align with national and regional priorities.

However, without greater regional coordination, many promising innovations risk being confined to national markets. As a leader, you can participate in efforts that promote knowledge transfer, cross-border collaboration and regional platform-building to help ensure Southeast Asia’s startups can scale beyond pilot projects and local successes.

Final Thoughts

I believe what the region needs most is long-term strategic commitment—not reactive pivots every time global trends shift, but rather sustained focus on building an innovation ecosystem that thrives on Southeast Asia’s own terms. In my experience, this involves resisting the urge to replicate models from elsewhere and instead doubling down on the region’s unique strengths: agile and resilient talent, digital-first adoption patterns, growing infrastructure investment and the emergence of a new generation of regional capital.

Southeast Asia does not need a Silicon Valley clone. It needs an innovation architecture that transforms diversity into agility, complexity into opportunity and infrastructure investment into a deep tech future. If you help shape that evolution—by building ventures designed for integration, resilience and regional relevance—you can not only unlock tremendous business potential but also be part of forging a model of innovation leadership that the world has not yet seen.

Deep tech is becoming global, and the competition is rising between countries, regions and cities. The truth is that only a fine-tuned and balanced mixture of scientific innovation, high talent density and fast-growing industry makes an ecosystem an attractive location to scale deep tech startups and transform them into successful and sustainable businesses. The Bay Area, Boston and Israel built their reputation as leading deep tech nodes by uniting those three key pillars.

In this competitive paradigm, high talent density and diversity are paramount. The rhetoric of a global war for talent and the emergence of a new type of global meritocracy have mobilized many governments to change social and economic policies to attract and retain top talents.

A Standout Example

Switzerland is no exception. Despite being a small country, Switzerland has built a global reputation over the last two decades as a hub for deep tech, medtech and advanced manufacturing. Its competitive edge lies in its highly educated workforce, world-class research institutions and strategic position at the crossroads of European markets. The Swiss government and regional agencies such as Innosuisse have strategically prioritized deep tech sectors through funding schemes, technology transfer programs and startup incubation initiatives. With its ability to seamlessly integrate research excellence with entrepreneurial ambition, it’s a natural hub for industries like medtech, robotics, cleantech and a cornerstone of its deep tech strategy.

The Deep Tech Talent Challenge

While Switzerland boasts some of the world’s highest talent densities, the global talent war remains a pressing issue. Over the decades, many of the brightest minds emerging from Swiss institutions have contributed to the success of ecosystems elsewhere, particularly in the U.S. This “brain drain” has been a mounting issue for many European countries, including France or Italy.

To address this, Switzerland has made significant strides in developing local talent while attracting foreign professionals. It has embraced policies that facilitate the immigration of highly skilled workers, particularly in STEM fields. Multinational corporations, such as Novartis, Roche, ABB and Logitech, have been supported nationally to provide local jobs and opportunities for graduates and professionals to find rewarding careers without leaving the country.

Switzerland’s deep tech entrepreneurs, however, still face significant challenges. CXO roles in deep tech startups often require a unique blend of scientific expertise and business acumen, which is not always readily available. Bridging this gap requires concerted efforts to cultivate entrepreneurial skills and attract seasoned executives with experience in scaling deep tech ventures.

Thriving ecosystems rely on future-proof approaches to workforce planning. Switzerland’s ability to connect its industrial strategy with people and skill requirements has been a defining factor in its success. In the end, knowledge, data, skills, expertise and market access are the currencies that link ecosystem players. In Switzerland, entrepreneurs benefit from an ecosystem that provides financial support and fosters a culture of collaboration and innovation. This multi-stakeholder approach is vital for developing and scaling deep tech ventures.

The Swiss Deep Tech Playbook

Deep technologies often affect entire value and supply chains, requiring an innovative playbook to analyze stakeholders’ interdependencies and value creation models. In Switzerland, these ecosystems are supported by a dense network of technology parks, research institutes and innovation hubs. Organizations such as Venturelab, Switzerland Innovation and the ETH Domain play pivotal roles by providing funding, mentorship and global exposure to entrepreneurs, enabling them to navigate the long and complex development cycles that characterize deep tech.

Swiss research institutions are continually reinventing their approaches to technology transfer and commercialization. This is evident in the rise of spinoffs from ETH Zurich and EPFL, which have gained international recognition for their groundbreaking innovations. These institutions are creating new entry points for entrepreneurs and investors, making Switzerland an increasingly attractive destination for deep tech.

However, developing deep tech ecosystems requires more than scientific excellence. It demands experienced C-level executives who can guide startups through the complex phases of prototyping, pre-industrialization and early commercialization.

Lessons From Switzerland’s Success Story

Switzerland’s success in the deep tech sector offers valuable lessons. Integrating research excellence with entrepreneurial ambition is critical—a strategy famously exemplified by Silicon Valley. Deep tech startups should consider seeking partnerships with universities, research institutions and innovation hubs to access cutting-edge knowledge and resources. Collaboration with academia can foster technological innovation and provide access to talent pipelines, mentorship and early-stage funding opportunities.

Second, cultivating a multi-stakeholder ecosystem is essential for scaling. Switzerland’s network of technology parks and innovation hubs exemplify how an ecosystem that connects startups with investors, corporates and industry experts can create synergies and foster growth.

Lastly, Switzerland’s success underscores the critical role of workforce planning and talent development in driving innovation. For startups, this means prioritizing the cultivation of both technical and business expertise within their teams. Make sure to foster a culture of continuous learning, hire individuals with interdisciplinary skills, and create clear pathways for professional growth; startups can effectively bridge the gap between research excellence and commercial success. Even in smaller ecosystems, startups can attract top-tier talent by offering equity, opportunities for advancement and a mission that resonates. Ultimately, the most talented individuals are drawn to environments where they can collaborate with the best, creating a virtuous cycle of growth, innovation and excellence.

Conclusion

The rise of inspiring deep tech entrepreneurs and the ecosystems around them is one of the most fascinating business developments of our time. While not every country will emerge as a leader in this space, Switzerland is particularly well-equipped to maintain its position as a global hub for deep tech innovation. As Switzerland continues to refine its approach to fostering deep tech, its impact should extend beyond its borders, shaping industries and creating opportunities for future generations.

Yet, despite their transformative promise, securing funding for deep tech ventures remains an uphill battle. I believe this paradox arises from a fundamental misalignment in the venture capital (VC) ecosystem: Investors naturally gravitate toward sectors where experimentation is low-cost and rewards are immediate rather than to areas with the most critical need for innovation. Deep tech, in contrast, challenges traditional financial models with high uncertainty and extended timelines.

But I believe finding sustainable funding solutions for these high-impact enterprises will be essential in the years to come. Let’s take a closer look at the current VC landscape and what options can help deep tech founders establish strong financial support for their startups.

The Venture Capital Paradox

While venture capital investment in deep technology has grown over the past 10 years, the allocation remains disproportionately minor; according to BCG, 20% of total VC funding is now going to deep tech. This imbalance is evident in sectors like climate tech: High-impact areas such as sustainable construction and energy transformation often struggle to attract sufficient funding, while low-impact sectors like e-commerce or ride-sharing secure disproportionately large investments. I believe addressing this disparity requires a fundamental shift in how capital flows toward innovation-rich but resource-intensive domains.

The VC model dominates startup funding and prioritizes businesses designed for hyper-growth and rapid acquisition. This approach works well for software startups or consumer-focused platforms but often needs to align better with the deep tech realities. Deep tech startups typically face high capital requirements upfront—whether for hardware, infrastructure or manufacturing—and longer timelines for profitability. For such ventures, VC funding, focusing on rapid returns and equity trade-offs, can be prohibitively expensive.

This is why I believe deep tech entrepreneurs need to look beyond traditional VC and embrace a broader spectrum of funding options. The choice of financing—whether dilutive or non-dilutive—could significantly shape your business strategy and your long-term growth trajectory.

Diversifying The Deep Tech Funding Landscape

A robust funding strategy for deep tech startups requires understanding the nuances of available capital sources. Here are some of the most common financing options:

• Philanthropic Foundations and Prizes (Non-Dilutive)

Foundations like the Gates Foundation offer grants and prizes to advance research and pilot projects in specific fields. Often tied to milestones or competitions, these funds can provide critical early-stage support.

• Government Grants (Non-Dilutive)

Public funding bodies provide grants for R&D and commercialization. However, government grants often involve lengthy application cycles and rigorous reporting requirements.

• Crowdfunding (Non-Dilutive)

Platforms like Kickstarter allow startups to raise capital directly from the public. While often effective for consumer-facing innovations, this approach requires significant outreach and marketing efforts.

• Angel Investors and Syndicates (Dilutive)

High-net-worth individuals or groups like Cambridge Angels can provide early-stage funding with relatively low diligence requirements. Their investments are often thesis-driven and network-based.

• Accelerators (Mostly Dilutive)

Programs like Y Combinator or deep-tech-specific initiatives such as Carbon13 offer funding and mentorship to help startups refine their business models. Accelerators can be instrumental in connecting founders with strategic partners and advisors.

• Catalytic Capital (Dilutive)

Funds like Breakthrough Energy Ventures prioritize societal impact over financial returns. These investors are typically more patient and mission-aligned, which can make them ideal for capital-intensive deep tech.

• Rolling Funds (Dilutive)

These quarterly raised funds, such as Climate Capital, provide flexible investment vehicles focused on thematic areas like sustainability or advanced technologies.

• Micro-VCs (Dilutive)

Smaller venture funds specializing in niche areas, such as Creative Ventures or Embark Ventures, often bring deep expertise and hands-on support to their portfolio companies.

Strategizing The Funding Journey

At early stages, deep tech entrepreneurs often gravitate toward non-dilutive sources like grants and prizes. These funds can provide a much-needed runway and validate your startup’s technological potential, signaling competence to later-stage investors.

As your startup progresses, you may want to incorporate angel syndicates or accelerator programs into your funding strategies, leveraging these networks to refine your business models. Moving into growth stages, the challenge often shifts to accessing catalytic capital or micro-VCs, which typically require navigating complex due diligence and trust-building processes.

The journey of securing capital for deep tech is often likened to navigating a Russian nesting doll: Each funding layer presents new challenges and opportunities. It’s important to be both strategic and creative, adapting to shifts in market dynamics, regulatory landscapes and investor appetites. Capital in deep tech should act as a positive feedback loop: Success stories can help validate your model and pave the way for innovative financial products and structures.

I believe that in order to accelerate innovation in deep tech, global tech business leaders need to evolve and seek out more equitable access to capital. This can include fostering public-private partnerships, developing hybrid funding models and encouraging institutional investors to allocate resources toward high-impact technologies. By aligning the right type of capital with your business strategies, you can unlock the transformative potential of your innovations.

The vision is often for these islands of innovation to spark new energy, revitalizing the parent organization. Yet, the results can be far from what was expected. These efforts, despite high hopes and initial enthusiasm, don’t always deliver the large-scale, game-changing outcomes they were meant to produce.

While it’s true that some innovation centers do yield notable outcomes—BMW’s Startup Garage, for example, contributed useful technologies to its car designs—these achievements can be more modest than disruptive. Even though these small wins can bring incremental improvements, they may not address larger, more systemic challenges facing companies, such as adapting to the rise of software-driven industries and competition from rapidly advancing markets.

So, why do corporations still struggle to innovate?

Myths That Hinder Corporate Innovation

The core issue is that these innovation hubs often fail to deliver meaningful returns, despite their best intentions. In many cases, they fall short of their ambitious goals and are forced to justify their existence by pointing to vague achievements like “cultural transformation,” a term often used when there’s no solid proof of financial success.

One of the biggest obstacles to innovation within these corporate structures is their over-reliance on rigid, step-by-step processes such as design thinking. While such frameworks can be effective for making gradual improvements, they are often too structured to foster the kind of bold, disruptive ideas that could truly shake up a market. Corporations like predictability, and they tend to favor project pipelines that can be managed and controlled at every stage.

However, this approach usually leads to safer, incremental innovations, as riskier ideas don’t fit neatly into traditional financial models. Moreover, the decision-makers responsible for greenlighting these projects are often mid-level managers who lack the vision or willingness to take bold risks, resulting in stagnation and missed opportunities.

Another myth that hinders corporate innovation is the idea that long-serving employees can suddenly transform into entrepreneurs within the company, driving radical change. While intrapreneurship can be effective for making improvements to internal processes, it may not necessarily lead to groundbreaking innovations. Employees embedded in corporate culture are often more focused on job security and stable career paths than on taking the kinds of risks needed to lead disruptive projects.

On top of that, there’s little incentive for them to do so, as even in the event of success, the rewards tend to be modest and undefined. Intrapreneurship may be effective for minor adjustments within a company, but it’s not always a reliable strategy for future-proofing a business or positioning it to lead in an evolving market.

Unlocking Genuine Corporate Innovation

The real key to corporate innovation lies in embracing uncertainty and focusing on a portfolio approach rather than following rigid methodologies or betting on a single project.

Nassim Taleb’s The Black Swan explains that a structured corporate innovation process can inhibit the type of experimentation that’s needed to capture “Black Swan” opportunities. The lesson is that corporations should embrace serendipity, allowing ideas to flourish from unexpected places, even if these ideas initially seem too risky or unaligned with the company’s core strategy.

To rethink your corporate innovation strategy, I recommend creating a broad range of small, speculative projects that increase the chances of stumbling upon a breakthrough. This approach requires leadership to champion a culture of experimentation, de-risk the consequences of failure for employees and reward learning and discovery over simply meeting predictable metrics.

Three Strategies For Getting Started

To truly build a more strategic approach to innovation, leaders can:

1. Create “safe-to-fail” spaces within the organization where experimentation is encouraged. Adopting this approach requires a cultural shift toward accepting failure as a part of innovation and focusing on long-term learning and discovery rather than short-term efficiency.

2. Support and fund moonshot projects—ventures that may appear impractical but could lead to large-scale disruption. Embracing experimentation means companies can increase their exposure to asymmetric payoffs, where the success of a few projects can far outweigh the costs of many failed ones.

3. Listen to weak signals and cultivate environments where employees from diverse areas can contribute ideas outside of their immediate expertise. This mindset fosters resilience in the face of uncertainty, allowing corporations to respond and adapt to shocks and volatility instead of being harmed by them.

A portfolio approach balances incremental improvements with disruptive or radical innovations, allowing flexibility and adaptation in response to unexpected opportunities or challenges. Companies that succeed in highly volatile environments understand that predicting the future is a fool’s game. Instead, they focus on developing a variety of options and hedging their bets, so that when an unexpected opportunity arises, they are ready to act.

Spreading risk and experimenting with different avenues can help organizations better position themselves to capitalize on the next major innovation instead of relying on linear, predictable processes that can stifle creativity.

Because of the complexities of the productization tasks at hand and the deep scientific background needed, the barriers to entry, maturation and scalability in another country are extremely high. But the risks with developing or combining high technologies can be mitigated by founders who are successful at striking those key cross-border partnerships.

Building Connections To Fuel Growth

While framed as client-supplier relationships, the collaborations that deep tech startup leaders form are more complex and rarely purely commercial. Founders interact with corporate R&D teams—otherwise unavailable to small customers—who convinced their decision makers about the opportunities of a collaboration. Equipment manufacturers and process specialists are broadly keen on showcasing their products alongside the technologies that deep tech startups develop. Often, a mix of corporate giants and “hidden champion” SMEs forms the fabric of a successful long-term, win-win partnership network.

The amount, typology and aggregated know-how of industrial key players often hint toward North America, Europe and Japan as Tier 1 targets, with Israel, South Korea, China and India as contenders. Deciphering cross-border value chains is a strategic necessity, though it can be overwhelming and complex. To successfully create impact, founders need to navigate a moving network of stakeholder relationships in these spaces. They must constantly assess and understand the ultimate users of their startup’s product or service, as well as the intermediaries.

Decisions about how much time, energy and resources founders want to spend will drive how they approach the intermediaries who sit between their venture and future customers or partners. These parties include asset managers, corporate sponsors, advisors or investors. While intermediaries are a bridge, they can also create barriers. The expertise and willingness of an intermediary to collaborate on the development and evolution of a startup strategy can be critical for its success.

An incredibly strategic mindset and the associated cross-border processes go hand in hand with better control over development timelines, go-to-market and funding in the long run. The need to intimately interact with established players forces deep tech startups to professionalize internal processes and governance much sooner. Successful mastery of this change process—from the “garage startup” to a process-oriented tech company—boosts the attractiveness for future corporate acquisitions. It’s therefore a key success factor.

3 Tips For Handling Common Pitfalls With Cross-Border Scaling

The obstacles that deep tech startups may encounter during this expansion journey are numerous. There are different legal systems to master, potential challenges with identifying the right partners and eventual push-back from the original entrepreneurial ecosystem or the local government.

The idea that national distances affect the conduct and performance of businesses operating across borders has been at the core of entrepreneurship for decades. Cultural misalignment raises barriers to information sharing, reduces trust and increases transaction costs. Institutional distance, meanwhile, increases the risks of inefficient governance, marketing and potential sanctions associated with different institutionalized practices.

Here are three practical tips that founders can take to overcome some of those pitfalls.

1. Being Default Global Vs. Default Local

Future international success starts as soon as the venture is incorporated. Globalizing doesn’t happen overseas; it happens at founders’ desks. Startup leaders need to first identify the right support in advanced economies, large markets and top industrial ecosystems, then convince them to be involved.

Without the founders’ quasi-obsession to build as a global player, the future expansion is at risk. Mistiming of the internationalization strategy, forgetting the root causes of global success, hiring the wrong leaders or over-delegating the international developments are typical mistakes to be avoided.

2. Capitalizing On International Playbooks

The path to becoming a cross-border firm is a series of iterations and humbling experiences, and each business model requires a different playbook. The reality is that few early-stage deep tech startups are actually multi-geography, therefore not many people have actually been confronted with the challenges of growing a business across borders. As a result, that knowledge is a scarce resource.

Because so few people have been there, it’s difficult to seek expertise when going down the globalization road. Founders should spend some time preparing a version that serves as their company’s single source of truth and covers the latest learning on how their venture can grow effectively at the global scale.

3. Empowering The Right Executives

When a deep tech company hires an executive, the business essentially hires that person’s network. While great executives will staff a team quickly, those with weak networks burn time to build their teams. In their first years, deep tech ventures mostly need a guide to work with the core team—someone who knows the market very well and has a pre-built international network. They’ll provide knowledge about markets, prospects and the capacity of competitors at a global level. Over time, startup founders can bring in more and more talented professionals, particularly senior local hires in targeted markets with long-time company employees.

In conclusion, navigating the complexities of deep tech commercialization necessitates that founders strategically manage cross-border relationships and professionalize their internal processes at an early stage. Success is contingent upon adopting a global mindset, leveraging best practices that are often elusive in the deep tech sector and recruiting executives with robust networks. The cultural, institutional and logistical challenges inherent in these ventures must be approached with humility, determination and unwavering dedication. This is how companies can secure long-term success.

Elon Musk: The Modern Icon

Take Elon Musk, the visionary behind Tesla, SpaceX and Neuralink. Many see him as the Henry Ford or William Shockley of our time. While his ambitions and achievements inspire millions, Musk might not be as relatable or easily emulated. He’s popularized cutting-edge technology and become a cultural icon, transcending the business world and amassing a vast following.

However, most entrepreneurs only engage with Musk’s persona through social media snippets, public market data and carefully curated communications, lacking the personal or operational familiarity necessary for a deeper connection.

The Downsides Of Deep Tech Elitism

This raises important questions: Is fostering deep tech elitism counterproductive? Does the celebrity status of figures like Musk stifle the emergence of a new generation of local, rather than global, deep tech role models?

These are complex questions. The influence of role models is multifaceted and not uniformly positive or negative. Role models can increase or decrease risk perception among both novice and experienced entrepreneurs. Even a positive influence can inadvertently hinder a venture’s success by skewing the balance between ambition and operational pragmatism, thereby challenging competitiveness.

Additionally, the impact of an entrepreneur’s emotions, moods and passions on creativity, decision-making, judgment and relationships is crucial yet often overlooked. Emotional factors are typically reduced to day-to-day leadership capabilities and occasionally addressed by coaches who struggle to link emotions with engagement, motivation and resilience.

The Role Of Hope In Deep Tech

For a thriving tech ecosystem, it’s vital to equip deep tech entrepreneurs with high levels of entrepreneurial hope to provide the energy, creativity, foresight and focus they need. Deep tech involves long development cycles, multiple stages, unpredictability and imperfections. Hope is necessary for resilience.

Local Distribution Of Role Models

I believe that more diverse and distributed deep tech role models can help connect the dots between inspiration and execution. Having both global icons and local role models is essential for healthy deep tech ecosystems. Identifying leaders and founders in our daily lives who form the backbone of today’s and tomorrow’s industrial economies provides a collective stimulus.

Differences in entrepreneurship levels between clusters, regions and countries are often attributed to the availability of role models. A region with high levels of deep tech entrepreneurship can further encourage new initiatives by making it easier to find appropriate examples or access resources from peers, as we see in the Bay Area or Boston.

Practical Inspiration: Learning By Example

The primary function of a role model is to teach by example. Social learning theory suggests that individuals are drawn to those who can help them develop by learning new tasks and skills, more so than by similarities in age, nationality or gender.

The positive impact of role models on motivation to pursue ambitious goals is most significant when their achievements seem attainable in terms of timing and abilities. Therefore, tech ecosystems should highlight a wide range of players, showcasing colleagues as examples rather than competitors and demonstrating that the social elevator works. This can attract new talents, seasoned entrepreneurs, experts and capital, which are all essential for deep tech success stories.

Replication: A Two-Way Street

Deep tech requires new systemic and support approaches. Developing a practical business in this field not only demands significant R&D to transition from the lab to the market but also takes more time and money than launching a digital venture. Future deep tech role models must leverage their social standing and impact by enhancing access to opportunities, funding, knowledge and hands-on support, creating a level playing field without bureaucratic obstacles.

In conclusion, fostering a diverse and distributed array of deep tech role models is crucial for inspiring and guiding the next generation of entrepreneurs. By bridging the gap between inspiration and execution, we can build a thriving tech ecosystem that addresses the challenges of our time.

Global research institutions spend billions every year exploring, developing and testing new technologies with the hope to bring them to market. However, while basic science provides numerous avenues for promising ideas and expertise in fields like sustainability or healthcare, a range of structural, intellectual, and financial barriers make their maturation complex, and broadly painful for founders. Those include a scarcity of funding and talent compared with consumer tech, to misaligned incentives and risk appetites among researchers and investors alike. Consequently, many ventures flounder once they reach the maturation phase before market players — investors, corporations — are willing to engage. Let’s face it. Frontier tech discoveries typically face 100:1 odds of making it through the first commercialization steps. Expensive product maturation efforts, investor pressure, and protracted time frames have made traditional investors rather risk-averse. This leaves vast funding gaps at early-stage that create both innovation and economic challenges. The problem is acute all over South-East Asia but resonates in a singular manner in Singapore, where the ambitions are big, science is world-class, and frontier tech R&D is deliberately being nurtured so that its outcomes can be pillars of the future national economy.

To counteract this structural complexity and move to the next level, the frontier tech sector in Singapore needs to produce more promising research ventures that are geared towards commercialization and international growth. In particular, recognizing that the country will always remain a small and remote international platform with regards to the major markets new frontier tech startups will likely target, a combination of targeted efforts could leverage the nation’s strengths and address some of its shortcomings.

1. Boosting the attractiveness for researchers and builders alike

There is no question that frontier tech maturation and productization should be driven by specialists, with the aid of seasoned entrepreneurs and operating partners. But the innovation-to-productization cycle only partly overlaps the process of venture creation. While having a team of scientists leading the go-to-market is somehow prevalent in Singapore, academics often lack the experience and incentives required to competitively translate their work into commercial products. Yes, they can learn. But the learning curve is generally steep, and it often has an irremediable impact on the productivity — and, down the road, the market timing and competitiveness — of the spinoff. We highlighted in previous articles the importance of organizing “relay races” , and the necessity to dynamically build the right team, at the right time. Not all academics are made to be science entrepreneurs, but most can make substantial contributions to emerging startups in their field. Now, for the academics ready to cross the entrepreneurship Rubicon, there is always a catch. Let aside the fact that publishing academic research is still considered as the ‘bread and butter’ of academic life —technology maturation is a demanding activity, and hardly compatible — basic science in Singapore just provides more stability and funding visibility. Even if the country had more frontier tech startups today, the reality is that the public sector would always be a black hole for talented research professionals, be they Singaporean or foreigners. To counterbalance this effect, official joint positions between universities and startups or venture builders can be tested. In addition, the introduction of innovative incentive mechanisms that would factor spinoff experiences in—e.g., new KPIs for academics seeking tenure — can entice more candidates to contribute to the ecosystem.

Second, the country faces difficulties in attracting experienced frontier tech entrepreneurs, venture builders, and operating partners. Unfortunately, even highly generous expatriate packages to motivate the move may not convince this crowd. They are largely incentivized to live and work in cities like San Francisco, Boston or Tel Aviv, associated with massive work and learning opportunities, which in turn contribute to their personal branding, experience, and network building. Singapore’s small domestic market, by contrast, structurally offers fewer opportunities to build a world class network. To counteract this, new immigration schemes targeting seasoned frontier tech entrepreneurs and operating partners would be a great addendum to Singapore’s gamut of immigration tools. For example, applicants demonstrating a strong track record could be granted a 3-year work visa— yes, you need visibility to build frontier tech— associated with an ‘entrepreneurial grant’, i.e., the possibility to be financially supported to incubate Singapore-based projects in their field. This status could even open the door to bringing additional talents to work on science-driven products (i.e., opportunistic pooling), as well as an expressway to raise early-stage capital. The program can be designed so that this frontier tech AAA crowd is incentivized to ignite and expand startups from Singapore, and incorporate the associated expertise into the local entrepreneurial ecosystem.

2. Unlocking the private funding market

Frontier tech fundraising in Singapore can be challenging due to the limited types of financial instruments available to the investor community, and the few domestic options available to promising startups. Although the government has long introduced generous tax schemes to incentivize private R&D, spending has been relatively low over the last decade, broadly amounting to 25–45% of gross frontier tech spending (note: it varies following the industry). While these proactive policies are commendable and a blessing for many innovation projects, we tend to notice that good ideas failing to tick government checklists have nowhere else to turn. Also, researchers, entrepreneurs and corporate executives alike point out that application processes for public grants have many restrictions in terms of fund allocation, an excessive reporting, and usually takes months to complete. Those frictions can be eased by working hand-in-hand with domestic grant administrators and technology transfer offices to simplify the playbooks that are used today to allocate and track the available public funding.

For frontier tech private equity to be successful in South-East Asia, a new investor base is poised to emerge, with a strong understanding of the region’s current strengths and weaknesses, and the journey ahead. To create this scene, Singapore needs to develop new and creative vehicles to attract capital. Establishing a series of early-stage hybrid vehicles (e.g., venture builders) and frontier tech venture capital firms is one of the best ways to do so. Making domestic funding available early in the process would reduce the number of startups seeking overseas financing, with the underlying risk to flip the company abroad in the first months or years. While some public funding contributions is expected to be necessary to make a dent —especially for venture building that concentrate more operational risks — it is critical that those funds end up primarily financed by the private sector over time, so that they can be truly competitive with each other. While frontier tech startups in Singapore are still seen as not producing sufficient financial returns for their level of risk, or suffer from a lack of information or local track record given the novelty of their markets, the country may want to support the emergence of new vehicles with first-loss capital in order to attract large, institutional investors and corporations. The new vehicles should be divided not by sector but by funding avenues and investment philosophies. In particular, while the country is home of numerous family offices and philanthropic capital, the lack of flexible investment vehicles has sidelined this market segment. There is a massive opportunity to bring them in.

3. Encouraging more international collaboration and networking

In the frontier tech fields, Singapore would benefit from more exchanges with the US, Europe, Israel and China. They host the global capitals for frontier tech research, development and private equity. Establishing business landing pads in top-tier hubs like San Francisco, Boston or Shenzhen would allow researchers and entrepreneurs to network with and market their technologies to investors and corporations, with the support of the Singapore government. This is key and goes way further than networking and soft landing. For a frontier tech entrepreneur, focusing — for example — on the US market requires a team with a deep understanding of the local regulations, the product development procedures, and, more generally, the current state of the industry. Most early-stage startups cannot afford to hire or develop these expensive resources by themselves, so there is a need for mechanisms to share the costs. Ideally, the venture builders and operating partners that Singapore is able to attract should support these efforts: they are expected to be familiar with these foreign markets, and have strong networks there. They would bring unique perspectives to the conversation.

As collaboration becomes even more critical to modern innovation, a standardized system of frontier tech talent development and exchanges would foster greater international cooperation, socialize science entrepreneurs into multi-disciplinary research and productization, and eventually attract more talent and funding in Singapore. Thus, the establishment of publicly subsidized talent transfer and support programs to complement the work done by the private sector would be a great addendum. As an illustration, the French public innovation agency bpifrance recently officialised an open platform supporting frontier tech CEOs in the constitution of their advisory boards, with 1,500 seasoned entrepreneurs and executives already registered to support early-stage startups. Singapore can easily orchestrate a similar scheme; government subsidies may be necessary at the start to cover the contributions of the first generation of advisors, and accelerate.

In the case of frontier tech, scientists, engineers, entrepreneurs, and business and finance professionals all provide different but equally necessary spheres of expertise. Any future ecosystem success hinges on its ability to make the most of these collaborations. From incentivizing academics, supporting the emergence of new investment vehicles, stimulating international exchanges to attracting seasoned entrepreneurs and operating partners, Singapore is to leverage new frontier tech policies and devote significant efforts to broaden the local pool of dynamic entrepreneurial human capital over the coming years.