The Three Lenses of Deep Tech Valuation: Beyond Numbers, Toward Strategic Value Creation

Ric Gros, Chair of Scimita

Introduction

Valuation in deep tech is a paradox. On the one hand, the journey is driven by frontier science and breakthrough potential; on the other, investors need clarity, structure, and returns. While traditional valuation frameworks provide helpful starting points, they fall short of addressing the complexities and opportunities unique to deep tech. This article introduces a third, often overlooked lens that integrates innovation strategy into the valuation conversation.

First Lens: Valuation Frameworks

The foundational methods used to value startups still apply in deep tech, though often with adaptations:

• Cost-Based Methods (e.g., cost-to-duplicate) attempt to assess what it would take to replicate the IP and team.

• Market-Based Methods (e.g., comparable transactions, precedent deals) offer external benchmarks but rarely fit the uniqueness of emerging science.

• Income-Based Methods like discounted cash flow (DCF) are useful at later stages but fragile in the early TRL range.

• Venture Capital (VC) Method works backwards from expected exit value, applying target returns and dilution.

• Real Options Valuation (ROV) is increasingly favored for its ability to model binary risk and staged investments.

• Scorecard and Milestone Models provide semi-quantitative ways to adjust for team, technology, and timing.

These methods help translate uncertainty into numbers—but they don't create value.

Second Lens: Investor Heuristics and Application

Valuation methods are rarely used in isolation. Investors triangulate based on:

• Stage of Technology (TRL 1 vs. TRL 6 dictates which methods are viable)

• Investor Type (VCs, corporates, government funds each apply different lenses)

• Risk Appetite and Thesis Alignment

For instance, a VC might use the VC method combined with milestone sprints to manage risk; a corporate may use real options to evaluate future strategic fit; a government grant body may simply assess cost-to-duplicate and scientific credibility.

In practice, valuation becomes a negotiation between perceived future value and current risk—grounded more in investor pattern recognition than in hard metrics.

Third Lens: Strategic Value Creation and Cascading Innovation

This is where traditional methods fall short.

In deep tech, the journey often starts with either:

• A breakthrough scientific insight with potential to solve a major problem, or

• A clear problem for which science is applied to find a novel solution.

This is the beginning of an innovation journey—and within it lies an untapped lever: the ability to shape not just the product, but the entire value ecosystem around it.

The Fallacy of Early Valuation Math

Yes, we can build discounted spreadsheets. We can run comparables. We can justify our forecasts with conservative assumptions and layered risk discounts.

But a spreadsheet cannot build the future.

These methods assign a value to the current state. They do not create value. That creation happens elsewhere—through a process we call Strategic Value Optimisation (SVO).

Strategic Value Optimisation

SVO asks:

• How much value is this tech actually creating?

• How much of that value can the company capture?

• What business models, pricing strategies, and deployment options best support this capture?

This step is about engineering the outcome—and positioning the company to command a higher share of ecosystem value.

Cascading Innovation: The Innovation on the Innovation

At Scimita, we use the term cascading innovation to describe how we iterate not only on the technology, but on the business logic surrounding it:

• Perhaps we buy underperforming assets and apply the tech to generate arbitrage.

• Perhaps we don’t sell anything, but instead license the IP into multiple verticals.

• Perhaps the technology enables an entirely new industry operating model.

These aren't just business models. They're multipliers of value.

From Vision to Valuation

With a robust commercialisation strategy and cascading innovation sprints, the venture doesn’t just advance its tech. It creates a compelling narrative for capturing outsized value. Investors don’t just see technical progress; they see line-of-sight to a 10x return.

This is what flips the valuation conversation:

When investors believe the path to 10x is real, the discussion shifts from "what are you worth today" to "how do we participate?"

Conclusion: Valuation as a Creative Act

Valuing deep tech is not about projecting the present forward. It’s about creating a future where more value can be captured and then pricing today accordingly.

The most successful deep tech ventures don’t just follow a valuation model. They run an integrated program where every technical sprint is mirrored by a value optimisation sprint.

In this world, valuation is not a number on a spreadsheet. It is the output of strategy, creativity, and bold design thinking.

Ric Gros is the Chair of Scimita, a deep tech innovation house advancing transformative technologies from TRL 3 to TRL 7. Scimita is pioneering new models for strategic value creation in partnership with capital providers, researchers, and commercial leaders.