When we talk with venture investors, they often ask us if solutions like CB Insights, Pitchbook or Tracxn are our competitors. They are not. Rather, Mergeflow and these other solutions complement each other. In this article, I’ll explain how this works.
Just for context, our venture customers are typically “deep tech investors”. These are investors who focus on companies in technology-intensive areas like materials science, energy, electronics, robotics, computing, or life sciences.
The software stack that our venture customers use
The software stack of most of our venture customers includes the following components (in addition to email, productivity tools, etc.):
Mergeflow
Mergeflow provides the science, technology, and market perspective on a company and its technology more broadly.
Venture capital, private equity, and M&A databases
Such databases include solutions like Pitchbook, CB Insights, or Tracxn. Our venture customers use these databases to get the transactional perspective on a company. This includes more detailed information on a company’s funding rounds, revenue, or number of employees, for example.
Deal flow management systems
Finally, for collecting and tracking insights that pertain to a particular company or deal, our customers use dedicated deal flow management software like Dealroom, or solutions like Attio, Pipedrive, Salesforce, or Notion.
Getting the “company perspective” and the “technology perspective”
Most of our venture investors don’t use Mergeflow to find investable deals. Rather, they want to get the science, technology, and market perspective on a pitch deck they have on their desk.
They use Mergeflow to speed up this otherwise very slow and labor-intensive process, and to discover and explore insights that they might not have found otherwise. Such insights could be a relevant technology they hadn’t considered before, for example.
Related article: What’s the ROI of Mergeflow?
There are two components to this perspective: the company perspective and the technology perspective. For example, if you were to look at collaborative robots company Rapid Robotics, the company perspective would be on anything explicitly related to Rapid Robotics itself, and the technology perspective would look at collaborative robotics more general.
The amount of information you get for the company perspective can vary considerably, from “nothing” to “a lot”. This depends on the stage of the company, among other factors.
But if you do get enough information back, it helps you tell whether a company is “real” or just hype. For example, when the news of Theranos‘ massive venture funding ($700Mio) first surfaced, Mergeflow showed the funding and many blog and news articles — but there were no science papers, clinical trials, or patents. That is highly unusual for a health tech company that raised $700Mio, to say the least.
Related article: Using data to estimate tech maturity
In practical terms, it’s probably easiest to look at both company and technology perspective in parallel. For example, if I were to look at Rapid Robotics, my screen would look like this (click on the screenshot to see it in full size):
One browser window has the company perspective, and the other one shows the technology perspective.
Specific questions we’ll address to get the R&D and market perspective
For both the company itself and its technology more broadly, we want to answer questions such as these:
- Venture investments
- Are there other venture-backed companies working on the same or similar technologies?
- Who are the investors?
- Markets
- Which other companies operate in markets that are relevant to the company’s technology? These companies could be potential customers or competitors.
- What markets are there for the company’s technology? We are mostly interested in small but fast-growing markets because such markets are often more suitable for launching a new product.
- Patents
- Does the company have patents?
- Who are the inventors? These are probably good people to talk to about the company’s core technology.
- General news and blogs
- Are there new product announcements? Press releases or news about cooperations with other (typically larger) companies?
- Science and technology
- What is some of the latest R&D pertaining to the company’s technology? This can help us find relevant experts we might consult. And more generally, it helps us prepare for meaningful, deep conversations with the company.
- What government R&D funding is there? Information on this can help us discover other early-stage companies that might otherwise be under our radar.
- Key performance indicators or figures of merit
- What are KPIs or figures of merit for the company’s technology? Knowing these KPIs will help us track progress in the future. And in the present, it helps us identify USPs of the company.
- Other technologies that might be required
- What other technologies are required for building the company’s technology? Having a better understanding of these other technologies helps us determine whether the company relies on external providers for certain elements or is self-contained.
- Reasons why the technology might not work
- What are potential science and technology roadblocks? We need to know these potential showstoppers so we can discuss with the company how they should best be addressed.
We want to be able to address these questions, at least in a first pass, within 20-30 minutes.
Importantly, the goal is not to replace, but to augment face-to-face communication with the team of a company.
Below, I’ll walk you through the process step-by-step. To illustrate, I’ll use examples from various companies and technology fields.
Using Mergeflow’s AI Brainstorming Assistant to get an initial technology due diligence checklist
Getting the company perspective is easy; you just type in the name of the company and explore the results. But getting the technology perspective can be a bit more challenging. It might not be immediately clear what to search for, or what you should pay attention to when exploring the results.
For example, let’s say we want to get the technology perspective on Skydweller Aero. Skydweller is a solar electric aircraft company.
What should we focus on? What might be good questions to ask?
This is where Mergeflow’s AI Brainstorming Assistant comes in. For any topic you’d like to explore, it can:
- Suggest synonyms
- Write a description
- Suggest key performance indicators that you can use to track progress of a technology
- Make a list of technologies that you may need to build what your query suggests
- Suggest reasons why a technology may not work (Mergeflow’s version of Devil’s Advocate or the 10th Man Rule).
Importantly, the goal is not to give you complete answers, but to help you ask better questions — or to help you write better queries in Mergeflow. It’s a bit like a checklist or like a “digital sparring partner”.
For solar electric aircraft, for instance, a response of the AI Brainstorming Assistant might look like this (click on the image to see it in full size):
You could use this as an initial version of a “technology due diligence checklist”. Again, don’t treat it as dogma but as trigger for your own thought process. But there are suggestions that could be useful for further exploration.
For example, you could zoom in on solar electric aircraft AND flight time (flight time was suggested as a key performance indicator). This would give you findings like this:
This gives you an idea of what’s currently possible with solar-powered aircraft, in terms of flight time.
Or, if you’d like to hone in on the “weight” concern (suggested as a reason why solar aircraft may not work), a search for solar electric aircraft AND weight gives you results such as this…
…which suggests continuous fiber-reinforced thermoplastics as a possible material (lightweight but as strong as metal), or this paper…
…which reports on a structural analysis of HAPomega, a solar electric aircraft design developed at the German Aerospace Center.
Related article: 5 emerging technologies for better weather forecasting
Venture investments
Are there venture investments in the context of the company or its technology? For example, there might be other companies doing similar things, or companies that are customers or suppliers to the company under consideration.
For instance, here is the result of a search for Rapid Robotics, a collaborative robots company:
Besides the Rapid Robotics funding rounds (just “Rapid” because Mergeflow extracted the information from the title of this article), there is Elementary and Micropsi. Elementary is a computer vision company that partners with Rapid Robotics, and Micropsi pursues similar goals to Rapid Robotics (faster training of collaborative robots).
Notice that we only searched for “Rapid Robotics” because we wanted to get the company perspective first. And this only gives us data where Rapid Robotics was mentioned explicitly.
Next, in order to get the technology perspective, we’ll search for “collaborative robotics” more broadly (click on the image below to see it full-size):
Now we can zoom in on these fundings. This way we can identify the investors, and get some more context on the fundings themselves:
Markets
Next, we’ll look at markets, focusing on the technology perspective. The reason is simple: Typically the companies that venture investors look at are too early-stage in order to be “seen” by market analysts.
As an example, let’s say we are looking at a LiDAR company. As stated above, we want to see what other companies operate in markets that are relevant to the company’s technology. These companies could be customers or competitors. And we want to discover small but fast-growing markets.
We can see the companies in the 360° overview of LiDAR in Mergeflow:
LiDAR companies like Velodyne would probably be competitors, whereas the automotive companies could be potential customers.
In order to discover small but high-growth markets, we’ll zoom into details:
When we order the market segments by growth rate (CAGR), we can see that for instance “delivery robots” is estimated to be a small but high-growth market segment in the context of LiDAR.
We could then take this a step further and search for LiDAR and delivery robots, to get the context there (click on the image to see it in full size):
These findings could help refine our thinking about targeting the “delivery robots” market, for example.
Related article: How to find niche markets for new technologies
Patents
We restrict ourselves to patents assigned to the company and won’t do a patent analysis of the company’s technology. We’re not trying to do a freedom-to-operate analysis here. Rather, patents help us identify technical experts at the company we’re looking at.
So we’ll simply search our patent data set for the company and then look at the inventors Mergeflow extracted from the patents. Using Mergeflow, we can also explore co-inventor networks. This gives us a sense of the team structure since people usually file patents together when they work together on a project or a technology.
As an example, below is the co-inventor network for Twelve (previously Opus 12), a company that makes materials from CO2 (click on the image to see it in full size):
We could take this one step further, and search for Kendra Kuhl and Etosha Cave, for example, who both take central positions in the inventor network (click on the image below to see the report).
This gives us news about Twelve’s new jet fuel made from CO2, their partnership with LanzaTech to make polypropylene and ethanol, and several government-funded R&D projects (in the “Research Projects” section of the report).
Related article: Companies that are making things from CO2
General news and blogs
General news and blogs are a good source for new product announcements, for instance. There may also be press releases or other news about cooperation or joint projects with other, typically larger, companies.
For example, I already mentioned some news on Twelve above, in the section on patents: It’s where we saw the news of the cooperation between CO2 recycling companies Twelve and LanzaTech, and the article about Twelve’s jet fuel made from CO2:
Another example is Carbon Upcycling, which is another company that makes materials from CO2 (click on the image to see it in full size):
So this is the company perspective. But technology blogs in particular are also very useful for getting a feel for the technology perspective. While this can be a bit hit-and-miss, it’s generally worthwhile just to spend a few minutes trying to discover interesting “food for thought”.
For instance, if we wanted to get the technology perspective on CO2 upcycling or making materials from CO2, here is a preview of what this would look like in technology blogs:
Under “recent blog posts”, the first article might provide interesting input to conversations with a company like Twelve or Carbon Upcycling, for example:
A new catalyst that transforms carbon dioxide into added-value chemical products –>
Then, eyeballing the tag cloud of “emerging technologies” to the right, Artificial Photosynthesis might be interesting to zoom into, for example:
Government R&D funding
It’s not uncommon, particularly for “deep tech” companies, to receive government funding at a relatively early stage. Therefore, exploring government R&D funding projects can be a useful way to identify early-stage deep tech companies. This is useful for getting the technology perspective on a company. For example, for Rapid Robotics (see above), we could explore government R&D funding for collaborative robotics.
Mergeflow tracks a number of government R&D funding programs worldwide. A program that is particularly interesting is SBIR. In the screenshot below, you can see some recent SBIR projects in the area of collaborative robotics:
Moreover, government R&D fundings are relevant for getting the company perspective. For example, if we look for green steel company Boston Metal, we can learn about their technology, without having to read entire scientific publications, by looking at these projects. Here are their fundings on a time axis (Boston Metal was called Boston Electrometallurgical before)…
…and here, for example, is their most recent SBIR project:
Energy-Saving Process for Extraction of Vanadium –>
Related article: Collaborative robotics: Building robots that can safely work with humans
Science publications
Science publications often provide the most detailed information on how a particular technology works and the various challenges that arise during its development.
As an example, let’s say you’d like to get the technology perspective on OROS. OROS is a company that uses aerogels to make very warm but also very lightweight outdoor clothing.
To get a sense of how active aerogel research is, we can begin by looking at aerogel science publications in general:
But in order to be as effective with our time as possible, we should probably zoom in on R&D that’s connected to our area of interest (apparel, clothing, textiles). For example, searching for aerogels AND apparel gives us this review paper:
Recent Developments in Nanocellulose-Based Aerogels in Thermal Applications: A Review ->
Or we could use Mergeflow’s patent class metadata to do a concept search, e.g. for aerogels used for textiles and shirts. This gives us the following paper, for example:
Try this for your own topics and companies
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