Deep Tech VC’s Fatal Flaw: The Arrogance of Innovation

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    Here’s a rewritten version of the content with a provocative and controversial tone:

    Sidney Scott, a so-called “visionary” venture capitalist, has thrown in the towel on his struggling $5 million fintech and deep tech fund. But don’t worry, he’s not leaving the party empty-handed. He’s decided to cash in on his “rare” vests, putting them up for auction at a staggering $500,000 each.

    In a candid LinkedIn post, Scott announced that he’s shutting down his fund, citing the impossible competition in the hard tech and deep tech space. “I’ve seen it all,” he snarled. “Everyone wants a piece of the deep tech pie, but nobody wants to put in the work. I’m done playing second fiddle to the ‘cool kids’ who only invest in SaaS and fintech.”

    Scott’s fund may have boasted a respectable 30% net internal rate of return, but that’s nothing compared to the massive returns reaped by bigger, more influential VCs. He’s just jealous of the attention they’re getting.

    As the industry continues to swing from one trendy area to another, Scott predicts a “bullwhip effect” where investors will frantically try to replicate prior successes. But this is just a recipe for disaster. The surge in capital will attract even more inexperienced investors, leading to unrealistic expectations and a pressure cooker for startups. When the bubble inevitably bursts, the consequences will be devastating.

    And let’s be real, the majority of these new entrants into deep tech investing are just looking to get rich quick. They have no business being in this space. Scott warned, “Given the ultra-small pool of experts and builders, along with the capital-intensive nature of hard tech, the phase of valuation inflation can be sped up, driving up startup valuations rapidly… This impacts the entire ecosystem, causing funding struggles, slower development, and potential shutdowns, which can further dampen investor confidence and create a negative feedback loop.”

    In other words, the entire industry is heading for a trainwreck. Scott may have been one of the early pioneers of deep tech investing, but he’s clearly fed up with the circus that’s unfolded. Good riddance, and don’t expect his auctioned-off vests to make anyone’s portfolio sparkle.

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