Quantum Computing Mogul Tells Deep-Tech Startups: “Raise Money When You Can, Not When You Need It” [27th World Knowledge Forum]

‘The U.S. Startup Ecosystem and Its Challenges’ Session IonQ Co-founder and Professor Jungsang Kim: “Capital Markets Can Freeze in an Instant… You Have to Seize Opportunities When They Come” Warning Against Dependence on Government R&D Subsidies: “Companies Turn Into Bureaucracies and Innovation Is Stifled” “When There Is No Early Market, Boldness Is Essential… Bet Like K-Content”

“Startups should raise as much money as possible in advance when they can secure funding from the market, rather than waiting until they need it. Capital markets can freeze in an instant.”

Jungsang Kim, co-founder of IonQ—the first pure-play quantum computing company to go public in the United States—discussed funding and survival strategies for deep-tech startups at the ‘The U.S. Startup Ecosystem and Its Challenges’ session of the 27th World Knowledge Forum, held on the 10th at The Shilla Seoul in Jangchung-dong, Seoul. The session was moderated by Michael Jeon, managing partner at Silicon Valley venture capital firm Solarstar Nexus.

After personally experiencing the collapse of the dot-com bubble and the downturn in the telecommunications industry at Bell Labs in the early 2000s, Kim moved into academia and began pursuing the commercialization of quantum computers. Founded in 2015, IonQ successfully entered the New York Stock Exchange through a SPAC in 2021.

Kim said that, given the deep-tech sector’s need for massive funding over a long period before commercialization, a carefully planned capital-raising strategy can determine whether a company survives. He recalled, “When liquidity surged and the SPAC boom took off shortly after the COVID-19 pandemic began in 2020, we moved ahead with the listing without hesitation and secured a large amount of cash. Although rising interest rates and an investment winter arrived in 2022, we survived thanks to the capital we had raised in advance.” He explained that a company can collapse overnight if it focuses only on its technology-development schedule and misses shifts in the market.

Kim issued a sharp warning about the tendency of early-stage startups to rely on government R&D projects. He said, “When we founded IonQ, we decided not to accept even a single penny from government contract research projects. Once you take government money, your research objectives become fixed, making it impossible to pivot nimbly in response to market changes. Because of all kinds of regulations, such as documenting working hours, the company turns into a bureaucracy from its very first day.” His point was that governments should be treated only as customers who purchase technology, while development funding should be raised through private venture investment to achieve exponential growth in corporate value.

Regarding the recent polarization of global venture investment, with more than 85% concentrated in a small number of generative AI companies, Kim proposed the ‘first-mover advantage’ as a solution. He explained, “When we founded IonQ, no one believed quantum computers had market potential. But because we entered when no one was paying attention, we were able to design the market ourselves through trial and error with relatively little initial capital.” He added, “When entering an established market, you must combine your business with a powerful model that fundamentally disrupts the existing industry’s cost structure.”

Kim urged young Korean entrepreneurs to take bold risks. He said, “When everyone in the past was focused on entrance exams and secure career paths, director Bong Joon-ho and writer Han Kang ventured into entirely different cultural and artistic fields and became world-class. What they had in common was their willingness to take bold risks. Rather than blaming limitations in infrastructure and capital, entrepreneurs must show the determination and ability to act while willingly taking on the risk of failure. Only then will global capital finally begin to move.”

This article has been translated by GripLabs Mingo AI.