Hard tech is hard, but when there are major breakthroughs, that can come with outsize returns and enormous opportunities. Cantos just closed its third fund to invest in science-forward companies at the pre-seed and seed stages to 'improve billions of lives and saving the planet.'
"I have a bachelor's in international relations. I'm not technical at all. I've always been sort of a reader and watcher of science fiction," admits Ian Rountree, GP and founder at Cantos Ventures. "You hear all these truisms that I think are largely a myth of modern venture capital. Those myths include that 'hardware is hard and slow' and that hard tech is more capital intensive. There are assumptions that it isn't as good as investment. And yet, if you're looking at the biggest problems in the world, it makes you wonder. If we're gonna mitigate climate change, disease, armed conflict, existential risk, poverty -- building real shit in the real world is probably more impactful than software in many cases, but venture capital was basically scared away from it. That didn't really sit well with me."
Rountree took a deeper look at the sector, and where others saw risk, he saw opportunity.
"If all of Sandhill Road is categorically saying I'm not investing in hardware and bio, then maybe it's actually an interesting gap to step into," says Rountree.
Cantos 3 is focusing on pre-seed and seed-stage investments in deeply technical climate, TechBio, aerospace and next-gen computing startups. It specializes in taking technical risk alongside founders and will tolerate more of it than other venture firms, it claims.
"We seek to minimize market risk, and we look for companies making commodities cheaper and with a lower carbon footprint, raising the standard of care, or improving the defense capabilities of democratic nations. We believe the largest companies can also have the biggest positive impact on people and our shared planet when stewarded well, so we aim to back entrepreneurs with the ambition to build $10 billion to $100 billion companies and beyond," Rountree says. "Our thesis is that such companies will either offer platform potential or be full-stack. We view our founder partners as the new industrialists."