The founder’s financial craft is not raising a round — it is blending incompatible instruments into a single coherent stack.
Grants, soft loans, and equity are not interchangeable money. Each carries its own timeline, reporting burden, risk appetite, and implicit theory of what the venture is for. A grant rewards demonstrable public benefit; equity rewards capturable private return; a soft loan sits awkwardly between. The deep-tech founder’s real financial skill is instrument-blending: sequencing these sources so that each de-risks the next and none imposes conditions that strangle the others.
I executed this across 15+ programmes and roughly USD 25M. The pattern is instructive: early competitive prizes and grants (Venture Cup, GAP Fund, Climate-KIC) bought the technical proof that later attracted soft loans (Nefco) and strategic equity (D/S NORDEN). The grants were not merely money; they were credibility signals that changed the terms on which private capital would engage.
This suggests a richer account of the valley of death than “not enough capital.” The constraint is often not enough of the right kind of capital in the right order — a sequencing problem more than a scarcity problem. It also implies that public funding bodies shape private investment not only by what they fund, but by the order in which their instruments become available.
The open question
Can the optimal sequencing of public and private instruments be modelled from real venture funding histories, rather than assumed?