Venture Capital

We have discussed research supported by governments and conducted both in universities and in national labs or government institutes, and in the laboratories of several major corporate research labs, where most of the fundamental ideas have arisen. The research and education system is healthy, with teachers, students, conferences, and journals. We have seen that both startup companies and the large corporations are moving to bring systems into the market. The final participant in a functioning ecosystem is capital: without money, companies cannot grow and thrive.

Quantums-focused funds

At least two venture capital funds have been initiated, with funds of around US$100M each, in the last few years. Mike Lazaridis, an entrepreneur who founded Research in Motion (maker of the Blackberry phone), not only has supported research at the University of Waterloo and the Perimeter Institute, in 2013 he and Douglas Fregin started a venture fund named Quantum Valley. The second, Quantum Wave Fund, has offices in Boston, New York and Moscow, and was founded in 2012 with an interest in quantum technologies, though its existing investment portfolio does not yet include quantum computing startups.

Other funds

D-Wave has been supported both by the Canadian government and more than fifteen different venture capitalists. Several rounds of funding have been announced publicly over the years.

Long-established venture capitalists, including NEA and GV, have invested in some of the startup companies we discussed in the last article.

Services

Venture capitalists (VCs) do more than just provide money; they also actively engage in the management of companies they fund, and connect the inventors with potential customers and other members of the venture capitalists’ network. The challenge for VCs is patience. Most VCs are accustomed to time scales of just a few years for their investments to pay off. In the Internet Age, many companies creating services accessible through web browsers or providing apps for mobile phones expect to have significant revenue streams and established customers, if not necessarily profits, within a few months, making it relatively easy to assess the value of and potential for the business.

Quantum technologies, in contrast, will require longer development times (and larger dollar amounts) from idea to product. Because the core technical concepts are alien to the classical computers, cell phones and Internet services we are accustomed to, everyone from customers to venture capitalists must learn new ways of assessing value, learning to see the business case for deploying the technology and recognizing what is technically feasible without always understanding the technical details. If you are a potential customer or investor, we hope that this course has provided you with some understanding of the technology to assist you in these decisions.

Share this article:

This article is from the free online course:

Understanding Quantum Computers

Keio University