Hardware startups: How they raise money from investors

A contribution by David Meiborg. He is General Partner at First Momentum, a Munich-based VC that invests in technical B2B and deeptech startups in the pre-seed phase.

As VC investors focused on deep tech, we often see early-stage hardware startup founders struggle to understand and master key aspects of building a company. While there are many resources for SaaS startups, the deep tech space remains relatively opaque.

That's why we created the deep-tech hardware Napkin. To do this, we collected over 100 data points from 30 European deep-tech VCs and validated them with around 1,000 additional data points from Dealroom. The resulting report provides data and benchmarks on the relevant topics of company building across financing rounds and verticals.

In this post, we provide additional context and five actionable tips for successful funding rounds and the long-term survival of your startup.

1. Structure the cap table correctly from the start

To quote Francesco Ricciuti of Runa Capital: “Cap tables are important. Don't let poor technology transfer reduce your chances of success.” While it is important to get the right advisors and mentors early on for the network and their industry experience, this should not jeopardize future fundraising plans. This is especially true when spinning out a startup from a university or research institution.