In this episode of Nothing Ventured, host Aarish Shah sits down with Harry Morgan, principal at 7% Ventures, to explore the complexities of investing in climate and deep tech startups. Harry, a former founder turned investor, discusses the challenges of tackling world-shaping problems and the often uncomfortable realities of venture capital, including its tendency to amplify privilege over opportunity. The conversation delves into the unique dynamics of climate investing, highlighting the longer time frames and smaller exits compared to software ventures. Harry emphasises the crucial role of government in determining national priorities and de-risking scientific advancements. He also shares insights on the necessity of bias in venture capital, advocating for a trained approach to backing exceptional founders. Tune in for a thought-provoking discussion on the intersection of investment, innovation, and social impact. Timestamps: 00:00:00 - Introduction to Nothing Ventured Podcast 00:00:10 - Guest Introduction: Harry Morgan from 7% Ventures 00:00:42 - Overview of Today's Episode Topics 00:01:28 - State-Educated Founders and Funding Stages 00:02:26 - Host Reintroduction and Podcast Purpose 00:02:36 - Harry Morgan's Journey from Founder to Investor 00:03:02 - Lessons from Founding a Startup 00:04:31 - Transition from Journalism to Investing 00:05:04 - Balancing Science and Commercial Aspects in Deep Tech 00:05:58 - Importance of Founder Ambition in Deep Tech Investments 00:06:44 - Indexing on Technological Step Change and Founder Execution 00:07:28 - Early Stage Financial Models and Product-Market Fit 00:08:39 - Building a Business vs. Building Revenue 00:09:52 - Specialization vs. Generalization in Founding Teams 00:10:55 - Adaptability and Generalization in Founding Teams 00:11:13 - Importance of Commercial Knowledge in Founding Teams 00:12:02 - Venture Capital's Role in Solving Multi-Decade Challenges 00:13:17 - Market Timing and Structural Challenges in Climate Tech 00:14:39 - Hedging Against Market Timing Risks in Deep Tech 00:15:19 - Execution Risks in Deep Tech Investments 00:16:45 - Government Regulation and Market Timing Risks 00:17:52 - Technology Success vs. Company Failure 00:18:39 - Differentiation Beyond Climate Impact 00:19:26 - Viewing Climate as a Horizontal Rather than a Vertical 00:20:32 - Government's Role in Supporting Innovation 00:21:12 - Economic Benefits of Climate Innovations 00:22:23 - Challenges with Government Grants and Procurement 00:23:28 - Importance of Government Contracts Over Grants 00:24:08 - Issues with Innovate UK and Grant Flywheels 00:25:35 - Government's Role in De-Risking Science 00:26:25 - Cultural Attitudes Towards Failure in the UK 00:27:29 - Zombie Businesses and the Fear of Failure 00:28:45 - Social Mobility and Venture Capital 00:29:55 - Diversity in Venture Capital: Performative or Real? 00:30:54 - Checking Biases in Venture Capital 00:31:39 - Social Mobility Ventures: Creating an Alternative Flywheel 00:33:20 - Redefining Terminology Around Social Mobility 00:34:24 - Levelling Privilege and Access to Opportunities 00:35:17 - Supporting Underprivileged Founders to Take Risks 00:36:32 - Levelling the Playing Field in Access to Resources 00:37:03 - Systemic Problems in Social Mobility 00:38:41 - Education System and Entrepreneurship 00:39:35 - Celebrating Big Successes and Failures 00:40:34 - Social Mobility Ventures: Goals and Timescale 00:41:39 - Inclusivity in Social Mobility Ventures 00:42:49 - Celebrating Self-Made Success Stories 00:44:06 - Changing the Problems Entrepreneurs Solve 00:44:48 - Focus on Inclusion in Angel Investing FindHarry Morgan online at: LinkedIn: https://www.linkedin.com/in/harryemorgan/ Twitter: https://x.com/7pcventures / https://x.com/harryemorgan 7percent Ventures: https://7pc.vc This episode is sponsored by EmergeOne, fractional CFOs for venture backed tech startups from Seed to Series B. Get in touch at https://emergeone.co.uk/contact-us/ or join the CFO team at https://emergeone.co.uk/join-the-cfo-team/ Sign up for EmergeOne’s weekly newsletter, Off Balance at https://off-balance.beehiiv.com/subscribe