Investing in early-stage Physical AI startups involves distinct outlier opportunities, with incredible growth opportunities for investors. Our strategic framework aims to accelerate the growth, and exit to align with fund lifetime, facilitating future funding, while offering extensive support for efficiently tackling challenges.

Disclaimer: The following information herein is strictly confidential and is intended for authorized recipients only. This content is shown for information purposes only and is not intended as investment advice, or an offer or solicitation with respect to the purchase or sale of any security. The strategy presented herein represents the strategy of the General Partner of the Fund as of the aforementioned date and may vary at the discretion of the General Partner. There is no guarantee that any investment objective will be achieved. Past performance is not indicative of future results. Actual results may differ materially from those expressed or implied. Any projected returns presented herein are shown for illustrative purposes only. There can be no guarantee the Fund will achieve these results. Venture investing is risky and you could lose some or all of your investment.

Network and Ecosystem

A decade of founder expertise and vast network streamlines this for us. In the global hardware sector, key players – founders, experts, investors, partners – are only two connections away on Linkedin, providing early access to deals and expertise.

Deal sourcing in North America (US and Canada) narrows when focused on the Physical AI sector, enabling us to maximize our strong network for effective sourcing. Active involvement in events, communities, incubators, accelerators, and venture studios is a key part of our strategy essential for connecting with innovative talent and allowing us early access to almost all deals available within the sector and geography.

Deals: Our Secret Sauce

We prioritize effective automation internally to improve productivity for – deal CRM, founder assessments, LP reporting, online documentation signing, deal memo tracking, data room, investment tracking – ensuring openness with investors.

Deal sourcing begins with startup application with an inbuilt Startup Scoring that immediately evaluates the vision, team, product, business, and execution from provided information, ensuring alignment with our thesis. We swiftly review and engage startups with a score of 2.0 or higher within 48 hours for further assessment.

Smarter Angel AI, trained on 6.1M data points from startups, public companies, and crowd campaigns, evaluates the submitted startup’s alignment with market trends, sector focus, current stage, valuation and competition. This aids data-driven decisions, market understanding, and exit predictions. Now in its 20th iteration, it’s evolving to align with our investment thesis.

In-depth one-on-one discussions occur as part of our Dating Approach to Investing to build rapport and deep understanding of founders. 36 Questions for Investing, evaluates founding team members on 66 parameters, countering hype and FOMO. “Why You” is crucial for us in early-stage teams, and these questions allow insights into visionary, adaptable teams with growth mindset, innovation potential, problem-solving skills, efficiency, customer focus, and openness to assistance. Low competitiveness for deals allows us time to implement this thoughtful, relationship-focused approach.

We also set clear investment expectations by informing potential future deals with a score of less than 2.0 about required traction milestones and timelines expected, before any financial investment.

Due Diligence

Our due diligence covers analyzing market reports, financials, projections, capital efficiency, tech/IP, scalability, competition, risks, and legal aspects. We scrutinize startup data rooms and consult customers, partners, and experts to assess challenges and validate findings.

We meticulously dissect the existing technology, down to physical components and code, to gain a comprehensive understanding of technical decision making process during development.

Deal Structuring

Post-due diligence, we negotiate investment terms based on startup needs, AI recommendations, committee and expert insights, finalizing post-money valuation, equity stakes, and other key terms that best de-risk our investment and in turn LP’s capital.

This clarifies for all stakeholders the investment risks, future challenges, execution pitfalls, and the strategic exit plan.

We also set founder communication guidelines, while providing resources to tackle challenges.

Funding

After agreement, legal documents are prepared and signed, followed by compliance verification and prompt disbursement of investment funds to the startup.

Post Investment Value Add

We provide unparalleled long-term support for portfolio companies, drawing from deep domain expertise and extensive networks. This includes strategic guidance, operational assistance, mentorship, adding value as the rare Smart Money and earning a place on their cap table, ensuring they are well-equipped to succeed. Regular check-ins, tracking metrics, milestones, and challenges against OKRs, combined with our deep tech and user understanding, enable us to provide tailored advice, expert assistance, during informal discussions beyond board meetings.

Our well-rounded support system for startups includes:

• Global supplier and partner connections for prototyping and manufacturing
• Networking with domain experts, advisors, and early adopters
• Strategic guidance on business, operations, product development, and team building to improve efficiency before Series A
• Grant writing services
• Assistance with crowd equity campaigns
• Access to university research teams
• Introduction to potential industry clients
• Operational mentorship covering B2C/B2B sales, business development, and more

We aim to constantly improve our investment process, applying lessons learned to enhance portfolio efficiency.

We maintain transparent communication with our Limited Partners, sharing updates on fund performance, strategic adjustments, and anticipated challenges. This openness extends to engaging LPs as active contributors to our fund’s journey. We have a structured communication and event schedule to keep our stakeholders informed and engaged, ranging from biweekly updates to quarterly and annual reports and networking events, ensuring a vibrant and informed investment community.

Our Team

Supporting a Physical AI startup is a collaborative effort. In addition to Managing Partner Jasmeet Singh’s expertise in technology, operations, strategy, customer success, and user behavior psychology, we gather an extended team to periodically serve as strategic partners, venture partners, diligence partners, operators, volunteer advisors, or consultants to offer a diverse range of skills and perspectives

Grant Writing: A former mentee of Jasmeet, pursuing a PhD in Environmental Science and specializes in grant writing for to help startups access non-dilutive government grants from Canada, US, UK regions. Similar connections across US and Canada for specific segments and grant allocating such as SR&ED Tax Credit Financing, various branches of US government, CDAP

Ethical AI Development Leaders: Seasoned product management leader with over a decade of experience in product management and operations, she has conceptualized, developed, and launched 15 products, generating $60 million ARR and serving 2+ million users across industries. With 5 years of experience building award-winning AI/ML products, and 2.5 years building compliance, security, and privacy products. She is currently at the forefront of defining strategies to mitigate bias within Responsible Gen AI frameworks and governance related to Hardware & AI interaction. Two secondary contacts on the topic of AI Ethics, and governance in the global context

Product Development: Cogya, Scaledge, FyeLabs, Skilltor which assist startup founders with product development and testing in US, Canada, and India. Along with a mission aligned hardtech community that derisks productization in US regions. These also serve as dealflow sources. Similar connections in LATAM available when required

Logistics: Eshipper, Shiprocket for logistics and distribution in North America and India

Startup Benefits: Direct senior leadership connections with Beniplus and Benchmark to help provide startup employees with insurance benefits

Accounting: Manu Shandal (CPA), assists businesses in Canada and USA with 20+ years of financial accounting experience

HR Assistance: Background of over 15 years in the tech industry, specializing as a strategic and action-oriented HR partner in start-ups and scale-ups. Her track record includes crafting efficient and scalable HR frameworks and nurturing HR systems that attract, retain, and develop top-tier talent, thereby propelling business achievements. ExtensisHR as the secondary connection and support for hiring through

PR and Marketing: Agency which helps assists startups in their PR and Marketing needs including Podcast appearances

Diligence Partners: A network of technical domain experts across various industries

Other Resources: IP Lawyers and Auditors, Startup Immigration Partners, Investment and M&A bankers, B2B Sales assist, university researchers, doctors, marketing professionals, incubators, accelerators, government policymakers, startup ecosystem leaders dedicated to AI and hardware from North & South America, India, Africa, Europe, and South-East Asia, as well as co-investors and follow-on investors.

Global suppliers for prototyping hardware and manufacturing services: Actuonix, Adafruit, Arduino, Banana Pi, Creality 3D, CubeMars, Dagu, DF Robot, DigiKey, Firgelli, Google Coral, Hardkernel (Odroid), Hello 3D, Intel Realsense, Jabil, Jaein, JeVois, JLCPCB, Khadas, LattePanda, M5 Stack, MarvelMind, MatchX, McMaster-Carr, Meanwell, Mouser, Nano Pi, Nvidia, NXP, ODrive, Orange Pi, Pine64, Raspberry Pi, Robotis, Rock Pi, Seeed Studio, Slamtec, Tenstorrent, Texas Instruments, TowerPro, Unitree, Vexos, Waveshare, and local partners in various countries.

Internal Tool Stack: (Forms, Startup Scoring, Startup CRM), (36 Questions for Investing), (Network CRM), (Founder Communication, Early Adopter Network)

Actively seeking to incorporate dedicated regulatory compliance providers (MDR, BIS, ISO, IP65, etc.), and advisors in Battery Chemistry, Psychology, Material Science, Marketing to addresses the unique and intricate needs of hardware startups.