SPEAKER_00 0:02

Welcome to the Future Ventures podcast on Scaling with Clarity. Today's guest is Craig Taggart, venture partner at Cubid's Venture, where he focuses on strategic investments, family offices, and capital market rights. Craig has worked across venture capital financing, goal-to-market strategy, and business growth, helping uh technology and healthcare founders translate their expertise into scalable companies. At Cubid's Ventures, his work sets at the frontier of quantum systems, AI native platforms, and next generation computing infrastructure where scientific breakthroughs must ultimately become commercially viable businesses.

SPEAKER_02 0:44

Craig, welcome to the show. Thank you very much, Maxim. I appreciate you uh having me.

SPEAKER_00 0:50

I think we have a whole blue screen here. Yeah, yeah. I'm super excited for the conversation today. Um so when I typically start with um kind of a bit of uh your story into a venture, kind of like how did you come to do what you're doing currently?

SPEAKER_02 1:09

Yeah, no, thank you. Thank you for having me. I appreciate the time. Um, yeah, so I've uh you know I'm gonna be 51 this year. I I uh came up through uh UBS um through investment banking and uh wealth management um in different different time frames, but got access to um uh deal flow, uh capital advisory, strategic growth, MA, uh tech companies, uh SaaS software. Um so I've you know really learned a lot back then. Uh that was at uh San Francisco and in LA. And uh I've been with a family office for about five years by the name of Lego Partners, where we focus on venture-backed growth companies. Uh so if you think about the Sequoyas, the Andreessans, the Coastla Ventures, the main venture venture capital groups that uh like to invest in the best companies in the world, really. That's what they do, and they've got a great track record. So we help them with their Series A capital round financing. Um, very well, and uh that's across technology and healthcare. And that has led me to qubit's ventures. Cubit's Ventures I've been with since about February of last year. And um, qubit's Ventures is the first US-based venture capital firm focused on quantum technologies. Uh, we've actually been around for four years, if you can't believe that. Um so uh our our our investments in fund one go back to 2022, and uh we focus on seed, post-seed, series A companies, um, and that's in quantum technologies, uh, next gen compute, uh, next gen AI applications, and then finally uh data center innovations or infrastructure. So that's that's what we focus on.

SPEAKER_00 3:02

So amazing. Yeah.

SPEAKER_02 3:06

So we're we're we're really kind of at that, we're really kind of at that critical in inflection point. Um last year was we felt was really the the year for quantum technologies. Um I'm happy to happy to be involved with uh my my GP and managing partner Nardo Maneloto, who's literally spoken all over the world. People know him everywhere. Uh, and he knows more than most on quantum technologies, believe me. So we we really believe as a firm that we're at a very critical and inflection point um for the entire future of compute uh and intelligence and infrastructure. So we're really investing with that theme in mind, and uh love to get into it more in this in this conversation.

SPEAKER_00 3:54

So absolutely. Um so so just kind of thinking you were taking your background from UBS to to LIGO to to QBase. Now, you've advised and financed companies across, like as you said, like technology, healthcare, the two primary sectors. Um, what changed in your thinking when you move from kind of helping establish businesses scale to investing in technologies whose market may not yet be fully defined or exist? Kind of like for those that don't know much about quantum, kind of like where does it sit currently? Like, how close is this to being like commercialized?

SPEAKER_02 4:34

Yeah, I mean that's that that's a great question. So, you know, one of the one of the reasons I I was I I came aboard as a venture partner was because I I felt that there was a a change coming. There's a physical wall that's already here in traditional compute. So quantum computing, um, to your point, has been very much lab generated, right? It's been very much RD, it's been very much maybe someday. Um will this ever happen? Um, how do we make this commercial commercial that commercialized? Can we get this to scale? What's what's the business use case? All these questions. What's what's happening now is, and maybe this had something to do with it, was uh if you remember December of last year, um, one of the comments came out around um uh from the CEO of Google, Sindar Pinkai. And obviously he has a vested interest in this because they put so much capital in RD to come up with their willow chip, as did other big tech companies, right? So, you know, he said his words, quantum quantum technologies is where AI was five years ago. So he he said that in December of last year, and what we're now seeing is that this year we've seen a significant shift from what I said previously to okay, we have security concerns, we have power concerns, we have a physical wall in traditional compute, we don't have any other, we don't, we can't build any more data centers, right? We have banks at risk, we have securities issues at risk, we have the whole cryptocurrency at risk if we don't figure out this cryptography. So, what you're what you're seeing happen is you have companies that are now public companies such as IonQ, many others, and they are doing a tremendous amount in architecture, photonics, security, um, you name it. So it's it's really about um being positioned the right way. And we think we've passed that point in the fact that we're seeing a tremendous amount of MA uh coming from public companies. We're seeing um, I think we just passed over a billion dollars in revenue for privately held quantum computing companies. Uh, there's been a over a 50% increase in startups and quantum-based companies. So, you know, all the signs are there. And then I think the biggest sign was if you go back to about a month ago, you saw the Department of Commerce, um, US government come in with a $2 billion investment under the Chips and Science Act, which basically funded quantum modalities, which is exactly what Qubit's Ventures does, right? So uh so that they invested in nine different companies, uh, both public and private foundry, superconducting, trapped ion, photonics, everything. So, what does that mean? Well, that means that the US government, uh, IBM, one of the companies we really like on the public side as well is is uh inflection because that is a neutral atom architecture, which we are very involved in. But that they basically said, look, quantum is here, we're a venture investor in quantum technologies, we're gonna de-risk the sector with this investment from a from a capital standpoint, and this is something that we we need to be invested in for national security and energy. Those are our two biggest concerns in this country right now is national security and energy. So that's a big tailwind for us, and it speaks to kind of where we are um in in that process as far as the capital markets are concerned. So hopefully that answers your question.

SPEAKER_00 8:49

It does, it does. Can you double click on national security and energy and how uh how is quantum technology being deployed in in those instances?

SPEAKER_02 9:01

Yeah, sure. So I'll I'll talk about um security because I think that's what's driving the adoption. And the reason why that is, is because to my point, is that if you think about you know the security protocols around everything we know today, uh Bitcoin, Ethereum, you know, banking system, uh, securities industry, fintech, everything we have is on a certain security protocol. And what's happening is is we're thinking now that by 2028, that they're all going to be at risk in some point. So what's what we're adopting now is there's this quantum revolution that is introducing two, not one, but two cryptographic security designs that will protect against future quantum threats. So that that's that that that means PQC, which is post-quantum cryptography and quantum key distribution. Now what's what's what's being adopted quickly is is PQC because that is a new advanced cryptographic algorithm, and how it works is it basically is is um is instead of relying on the difficulty of factoring, if you if you will, factoring large numbers like RSA, PQC uses mathematical problems that are incredibly complex, are both classical and quantum architectures, right? So the most prominent family of cryptography, which involves finding the nearest point in the highly complex grid, or numbers, that's what that is. So we're talking about protocols such as TLS, uh, we're talking about SSH, VPNs, all of that. So we're thinking by 2028, that's gonna be here. So that's why in July of 2026, everything we know about security, whether it's cybersecurity, uh cryptography, you have to start moving in that direction of for a more global standardized, you know, like groups like NIST. NIST have finalized the first set of PQC standards, um, which we have to, right? I mean, these are digital signatures that are now in industries that are actively migrating to these quantum resistant algorithms. So that's that's the first piece of of security. The second piece is QKD, and that has to do with the laws of physics, right? So that's a hardware-driven method, and believe me, I'll be the first one to say I'm a business guy, I've had to learn a lot since I joined Cubis Ventures regarding the technology and the physics behind quantum. Yeah, so trust me, I'm doing the best I can, but this is what I want to talk about because security is something that we're we think is really driving the adoption of cryptocurrency of quantum. Because what else is what else is a bigger factor than than than security? Nothing. Yeah, right. So so that's that's where um you know, and then this has to do with hardware-driven methods such as properties of light or photons, right? So now we're getting into you know the real physics, physics side of it. So um, and this is a and this is to secure a cryptographic key between two parties. That's what that is. So there's a comparison, there's a lot of comparisons between both PQC and QKD, and how quickly they'll be adopted and why. Um, but that's that's the main, that's why I think adoption will start to create, and that's why I think you're starting to see the adoption and transition to quantum. Uh, just because it's not a want to, it's more of like we have to, right? It's it's kind of like it's kind of like if if you're if you remember, like you know, everybody is the year uh 2000, right? Everybody didn't know what was gonna happen in 1999, so they all waited to the fourth quarter of 1999 because year 2000's gonna change. It's the same.

SPEAKER_00 13:19

I think nothing was invented by the consulting firms, yeah.

SPEAKER_02 13:22

All the consulting firms, yeah, and they waited to the last two, you know, and then what happened? Absolutely nothing. Yeah, this is a little bit this is totally different than that. This is where everything is gonna be vulnerable if you don't do something about it yesterday. So, you know, but that's what we like. I uh we have we have we have three portfolio companies that are based on that security protocols, so makes sense. One is uh one is uh American binary, which is actually pretty uh pretty interesting, actually.

SPEAKER_00 13:53

Uh I can talk about that if you want, but um well what I'm trying to understand with with with these companies, I I are they working in um in a coordinate effort to establish the protocol, uh beautiful the infrastructure, um, or it or with with with the security component, like I mean the most logical two uh industries that that come to mind for me is the financial industry and two on the energy side, specifically critical infrastructure protection, right? We have SIPAX both in Canada and US. Um and NIST is kind of the standard. So um where where's the adopt where's the first adoption going to take place?

SPEAKER_02 14:37

Where? Yeah. Um well I th I think it already has. I mean, I I think you know, I think when you I think when you when you talk about uh PQC specifically, I mean we have a we have a a a portco uh which I'll share, it's in fun one by the name of American Binary. So American American Binary does exactly what I just talked about. So American Binary is it's a hardened post-quantum compute or post-quantum cryptography. Sorry, it's been a long day. Uh, but they meet, they already meet, if you think about this. So we have the National Security Agency, NSA, right? Yeah, so this company already meets the NSA uh CNSA 2.0 standards, right? It already meets their standards as a privately held company. So the architecture protects against what I just said, so it protects against present and future cyber attacks, which what else you know what is more dangerous than that? Not much right now, specifically with the war in Iran and all that stuff. So this is including this what you'll start to hear, this harvest now decrypt later. You're gonna start to hear that if you're any uh haven't heard it already. That's a big term in uh cryptography and security. So this is attacks involving really sensitive data. So but I think it's already happening, specifically you know, around companies such as IBM, Global Foundries, Atom Computing, Inflection, Reggetti, obviously D-Wave, P PSA Quantum, all these publicly traded companies on quantum, they're already adopting this in internally. They have to because it's it's so competitive. I mean, their first mover advantage into quantum technologies. Now they all they all have different modalities, but they have to they have to be adopting the security in-house that they would have already had more to do that, um, just because their current cybersecurity threats would have already the company would have already been at risk.

SPEAKER_00 16:43

So I mean in in in this case, obviously the the big enterprise had to start with this, or big companies. You talked about IBM, uh, that's kind of the the the driver. How would these parlay translate into like middle market companies, uh lower lower market individuals? Um what do you think the the roadmap would look like? As far as kind of like the quantum technology, the evolution, the adoption.

SPEAKER_02 17:18

Well, I mean, these are all these are all quantum, these are all quantum companies already, right? So they're all I mean you talk about, and I just I'm just listing the the companies that were invested by the government because people who watch your podcast would know who they are. Um but each one like uh global foundry has got three 375 million dollars. What do they do? Well, they're a multi modality, they're an open foundry, so they support superconducting, right? Trapped ion, photonics, and silicone spin architecture, all the architectures they they're involved in that. So and then IBM obviously got a billion dollars, so they got half the money, and you know, that's uh you know, I IBM has been around forever. So uh, but the other ones on the private side and the public side, the public markets reacted very positively to that, and now we're starting to see a lot more activity on the private market saying, hey, we need to be involved in this. Um, we need to be involved in the capital markets, uh, we need to be looking at funds because you know, most people are not, they don't have investment teams or investment committees. Um, most don't. I mean, we we talk to a lot of family offices and corporate venture capital primarily because they're they're the most um interested at this point, but most don't have at least large teams of people that really can understand different technologies within quantum, and that that that's across like and I'm talking about like um you know, you think about you know the AI software hardware, you talk about imaging and sensing, you're talking about electronics. We have a company by the name of uh Probius that's in healthcare and bioanalytics and quantum. I mean, think about that for a second. So, you know, AI compute again, defense security, American binary. I mentioned that. Uh energy infrastructure, big one, pink technologies. That's going to be a unicorn. So, you know, um, so we're we're very involved in that. Um, and we we think that um, you know, the the the private companies are are really starting to see some see some traction. And um and I think that will only continue as we move through 2026 and in 2027. I mean, we have 13 companies in fund one, and I think I believe two of those, I think, I believe two of those companies will probably be acquired in Q3 of this year. So those are companies that we invested in probably at the seed or post-seed level, and they're they're gonna get they're probably gonna be acquired by you know one of the larger privately held or publicly publicly companies that I already mentioned. So so you're starting to see, whenever you start to see that MA activity in a in a in an industry, you know that you know they're they're trying to scale, they're trying to grow, trying to build in-house, and the the faster they can do that, the more powerful they they become in in the industry. And and they know at this size that they can't, they obviously don't have the architecture or the teams to build certain types of quantum teams internally. So what what do they do? They acquire them, right? So that's what's starting to happen. So makes sense. Yeah, there's there's there's a no there's a notable shift in strategy, and like you know, uh as a condition for receiving like these chips incentives, the U.S. government is taking up. I mean, it's a it's a non-controlling equity stake in these companies. I mean, you know, the UK followed that, Japan followed that. Uh, this marks a major shift toward a proactive industrial. This is a policy move. It's not just capital, this is policy. This is part of Trump's administration. So um high risk, deep tech, federal investments, and they're all in. So, and I I do expect more capital to come into the space from from that department.

SPEAKER_00 21:18

So and it makes sense. It makes sense. Um, you you you mentioned that um um in fund one, there's 13 companies. I'm assuming in fund two, you're currently deploying. How big are the funds? What are the what is the check size?

SPEAKER_02 21:34

Sure. Yeah, I'd I'd love to I'd love to talk to you further about fun two. Fun two is probably gonna be about gonna be we're targeting a hundred million in AUM. Uh we have three companies invested um thus far. And uh, you know, we have I think we're up to I want to say 10 companies warehoused now. So we don't have any shortage of deal flow. So uh you know that's that's That's good news. Um, so you know, one of the one of the areas we we like, we we like a lot of areas in quantum, but we have one company by the name of Sigaldry Technology. Seagaldry Technologies is um and and one of the areas uh one of the things about qubits that's interesting that your listeners would like is that we have access, we have access to deals that other funds are not gonna have access to. Why? Um, because my partner, Nardo, it has been speaking on this and is a quantum uh expert across the world. So he's built relationships with um a lot of companies that I've already mentioned. So he knows you know um Reggetti, he knows the guys behind D-Wave, in inflection, atom computing, some of these public companies, he knows the guys on the boards, right? So uh Sigalery Technologies, we got we're in we're they held open position for us on the seed and series A level, and that is a company that is building um quantum. Let me just I want to make sure I get this right um because I I look at a lot of companies and I just want to make sure I have this right before I move on here. So speed on that. Yeah, so we're so Galdry Technologies. This is an AI hardware play. We just invested in this, yeah, and this is a think about this if you can put your head around this, where where where this is going. So I mentioned at the top future of computing, right? Quantum infrastructure and intelligence. This company is developing quantum AI, quantum accelerated AI servers. That's what they do. So that integrate multiple qubit modalities within a fault-tolerant architecture. So they did a hundred and thine million dollar raise, the largest Series A raise in quantum in private markets. That was done in April, and we were able to be involved in that deal. So, what does that mean? That means we're seeing not just deal claw, we're seeing the highest of quality of deals. I mean, Microsoft's invested in that, Nvidia's invested in that very good lead investors in that deal. So, um, you know, that's the type of manager I have. We're looking at architectures such as neutral atom companies. We think out of the four architectures such as um such as uh neutral atom, superconducting, trapped ion, those types of architectures we're seeing um neutral atom, foundational engineering, high-powered optics, we're seeing that is the leader in architecture. Why is that? Well, everybody thinks of quantum computing as this big chandelier hanging from a ceiling that's massive, takes infrastructure, takes you know, capital, all this build. Neutral atom technologies for architecture isn't that, and it operates at room temperature, it doesn't have to be at Kelvin or frozen temperatures. So it's very, very um friendly to um commercialization, it's very friendly to adaptability, it's very friendly to transitioning or pivoting to adopt adoption curve, right? So, you know, that architecture has to lead from somewhere, and we think that neutral atom um is the one to do that, and we've seen that from the public markets with with with uh in inflection. They got a hundred million dollars from the US government, and they're really doing well on the public side. So, but yeah, that's that's my that's my take on that.

SPEAKER_00 26:00

Makes sense. Um couple couple of questions there. Um, I know that the the under new administration, I mean it's not that new if it's coming on to two years, but there is a shift in policy in terms of like security independence and chip independence. Um do you see more of this happening? Um, do you I mean they at the moment it's very topical, right? Uh open AI is is is pitching to the US federal government for them to come in with five percent um stake in the company. Um, do you see more of this happening? What what is your perspective on this?

SPEAKER_02 26:38

Um, you know, I I I think you I think you're speaking more to like the open AI and and the anthropics, right? As far as the government involvement in that. Yeah, I think.

SPEAKER_00 26:48

We saw the US government take a stake in Intel. We see now a piece from OpenAI. Kind of like do you see more of the US government playing a role in in uh next frontier companies?

SPEAKER_02 26:59

I do. I I I do think it's part of their policy shift. I I do think it has to do with more national security, I think it has to do more with energy. I think it you know having that industrial policy, I think, in place will open up investment to these types of companies that can really protect the US, right? I mean, we're we're the most powerful country in the in the world, and you know, if if if anything, those are the two areas I keep talking about, but that's what's that's what's at most risk for us is our energy policies and our uh security for financial. You know, that's that's something that if if you leave yourself, you you you cannot afford to leave yourself open uh for those areas at all. Um, and I think that's what you're seeing with Intel, which was surprising, um, by the way.

SPEAKER_00 27:51

Um, but yeah, I think that's the government came in.

SPEAKER_02 27:55

Yeah, yeah. I mean, there they were, I mean, Intel lost their way a long time ago, in my view. I mean, they AMD, uh, Nvidia, Taiwan Semiconductor, I mean, they just they crushed them in earnings, product, everything. So, you know, I'm I'm kind of surprised, but you know, who knows? But they they took a big stake in Intel, and obviously Intel's done very well ever since then. So um, but anyway, um, yeah, so yeah, it's I don't think it's gonna stop. I I think it's it's it's in it's in the best interest of the government, it's in the best interest of the country, it's in the best interest of the of policy, and I think politicians, I mean, you know, they can always say, hey, I was part of the policy that that invested in quantum technologies and take take all the take all the credit they want for that for that decision.

SPEAKER_00 28:45

So some loud voices um say that the government shouldn't be in the business of picking winners and losers.

SPEAKER_02 28:54

Um yeah, exactly. I mean that's but that's why you saw I totally agree, but I think that's why you saw them do a diversified approach, right? They're like, okay, let's let's invest in quantum, but you know, we're gonna be heavy in IBM, but the rest of you guys can here's the hundred million, you know, but we're invested, you know. So I think that's a diversified approach and modalities, which is it's it's basically a venture capital approach to the industry, which is is great.

SPEAKER_00 29:24

So do you do you guys with qubits invest in uh companies globally, or does the company have to be Delaware C Corp, uh primary US, Canadian, North America?

SPEAKER_02 29:34

Doesn't matter whether you yeah, we're that that's a good thing. I mean, we're a great question. We're we invest globally, uh percent. Like we we have venture studio, um we have venture studio in India, venture studio up in Seattle. Um so you know we're definitely involved in that. We we we believe in we believe in the ecosystem that allows companies to grow. But yeah, we we invest globally and we talk to global capital. Like my my partner Nardo Maneloto, he's been in the Philippines for a week, right? So we're we're seeing we're seeing a lot of interest from Southeast Asia. Um we've been on the phone with Singapore, family office based, uh family office is based in Singapore, Japan, um, places in the UK, US is a little slower to adopt. Um, I have fortunately a lot of relationships with uh family offices, so we've had a lot of interest from family offices that um have a deep tech focus, but um, you know, again, it's it's kind of that that adoption curve which is is is happening now. So it's a good time to be in the space.

SPEAKER_00 30:42

Makes sense. Um notably I didn't hear Israel uh as part of this. Um there's a lot of deep tech VC firms there. Um okay.

SPEAKER_02 30:57

Yeah, no, we're uh it's funny you said that because I um I don't think there's a month that goes by that I don't see a company in deep tech from Israel. Um the the the continued innovation and technology and brain trust that continues to come out of that country is nothing short of phenomenal, um just as far as what they're able to develop. They've been known for cybersecurity for years, but um they they just I don't know what the word is for it. I've just I've never seen a country have so much trouble in the world, but yet it doesn't matter, and they just keep coming with the best companies in the world, it's amazing. Um so yeah, we're we're slowly getting there. We're we're seeing some interest from UAE, we're seeing interest from Dubai, so yeah, Middle East, but you know, until that settles down, people are kind of you know, okay, let's figure this out. But um, but yeah, we're we're definitely seeing it from global scale.

SPEAKER_00 32:03

Makes sense. Um just a curiosity question for founders that are listening. What must the quantum founder prove before you believe that uh they're ready for institutional capital?

SPEAKER_02 32:17

Yeah, great question. Um, yeah, so yeah, one of my one of the things I do is I is I look at a lot of deal flow. Um, and uh, you know, one of the things we're we're looking for is is you know, you know, what what is your obviously proof of concept, but you know, kind of that go-to-market strategy, product market fit, uh, what's your moat around the technology, what's your what's your patent portfolio? Um, you know, is this coming out of a lab? Is this coming out of a university? I mean, is there is there a business here or is this an idea, right? Because a lot of these companies sit at the university level, they sit at the RD level, they sit at the lab level, and they never really get to commercialization. There's a reason, right? There's a reason. There's PhDs are great, scientists are great, they're much smarter than I am, but they're not business people, they're not CEOs, they don't know how to make a business happen, they don't know how to grow a business. So we we look for a lot of different areas when it comes from an investment committee standpoint, but um, you know, there that those are just a few things that were that that are just red flags that you know, if because nine times out of ten, we've seen a company that is trying to do you know photonics, or we've seen a company that is trying to do um, you know, hardware, or you know, it could be a number of different things, you know, when it comes to sensing or imaging or defense security. So, you know, why are you doing what you're doing? What what you're missing, what what what problem are you trying to solve and how are you solving it? And you know, there's a series of questions that we ask, and if they if they can't answer some questions, then we know that they're not ready, you know. So that's kind of how that goes. Um, and then you know, basically we're looking at okay, you know, we we have a lot of we've you know, I see a lot of companies that I'm referred that are you know raising capital or have gotten or have received some sort of um non-dilutive capital uh in some form, which always is interesting. But it's really about you know that go-to-market, product market fit, um, what's the mode around the technology? What problem are you trying to solve? Who's your leadership? Who's on your board? Where's the company originated? Um you know, is this something that that can gain traction in the capital markets? Period. And then from there, you need to get, you know, um some sort of high-level lead investor on that pre-seed or seed round to really, you know, bless the company, to say, hey, this is a technology that that we've invested in, and here's here's the reasons why, and and it's gotta be different from what the market has seen. And uh venture capital is really good at vetting those out. So we we we do the best we can to uh to put us in the right deals. And that's one of the things that's that's great about qubits is that we we get shown deals, the best deals. So it really it really makes our job much easier because we don't have to go through you know hundreds and hundreds of deals to find one or two, and we still do that because you never know what's coming down coming down the path. But you know, we we have access to deals that most most people are not gonna see until the A round, the B round, or much, much further down the valuation chain.

SPEAKER_00 35:51

So I mean you you mentioned your Koji Pinardo uh as uh as as being a big force behind access to these deals. Um so visibility, obviously super important. How do you how do you scale for these deals? I mean, obviously, if people are coming, I'm I'm 100% sure that you're not just passively relying on people to come to you. So what what other things are you doing to uh to find the right deals?

SPEAKER_02 36:20

Yeah, so I mean, you know, a lot of this has, you know, we you know, again, we have a lot of relationships with with um Caltech, uh Berkeley, USC, UCLA, so you know, and overseas, and with you know, my partner has a lot of relationships with CEOs that he's been following for two, three, four years, right? So we want to see how those companies are developing, how they're growing. Are they ready for a seed investment? Are they ready for an A investment? Are they ready for a lead and lead or you know, a passive co-investment? So, and our our check size is usually, I mean, we're we're gonna be probably 100 million AUM, so you can kind of do the math, and we're probably gonna do about 35 companies. So 100 million divided by 35, you can kind of do the the check size on that. Um so you know, we're we're always active. I mean, I I can tell you, I probably get um emailed five deals a week, right? Because you know, I I post a lot on I post on LinkedIn on quantum technologies quite a bit. Like I just posted on um pitchbook. Pitchbook came out with a quantum technologies write-up, and I just did my own comments and and you know, always now it's funny. Like a year ago, I'd put a I put a post on LinkedIn, I get you know five or ten likes, a couple comments, like now it's over a hundred, right? So now I get you know, at least over 75 people liking my stuff and they comment on it because they know who I am, they know what I write about, they've seen a podcast, or you know, whatever. But you know, so I I get emailed deals a lot now just to take a look. You know, hey, we're raising a seed round on this technology. There's three million on a $10 million free, and we want to do a safe, or we want to do a growth, or you want to do a note, or you know, whatever the structure is. So that's what I see. But no, it's it's you know, I don't have to go look for them. Um, but you know, we we kind of have both. Where I can I I know enough companies now that we're kind of looking at already, and with my partner Nardo, we have we have plenty to look at, so but it's always interesting to see what's coming down the pipeline.

SPEAKER_00 38:33

So yeah, Craig, you mentioned universities. Um I'm curious, and I'm assuming that you're keeping an eye in terms of what's coming out of there, but like what do you think is the hardest uh I guess barriers to transition technology from the lab to to to commercialization or just taking it out, taking it out of the lap and pursuing it there?

SPEAKER_02 38:59

Yeah, I mean, we you know it's funny you said that because we we just we just do it, we just did a quantum day. We we presented at Quantum Day in Caltech back in April. And it was funny because two weeks two weeks before that, uh a little brief story, two weeks before that, there was news that came out that uh, you know, PhDs, guys smarter than I am, that are sitting in a lab that came out and said from a from a theoretical standpoint, you know, theoretical standpoint, they proved that you didn't need a hundred thousand or five hundred thousand or a million qubits to get to, you know, to get through error correction. They're trying to prove error correction, right? To get to functionality. So they basically said, yeah, we came out in theory and said it only takes between 10,000 and 20,000 qubits, not 100,000, 500,000 in an error correction type of scenario. So, you know, amazing brain trust there, but it's like kind of like what I said in the previous question is it's like you know, there's a lot of companies that have been sitting in RD. There's a lot of companies that have been a lot of concepts. I wouldn't say companies, I should say concepts or ideas that are in labs or RD that say, oh wait, quantum technologies is now commercialization. Now we should try to build a business around it. Okay, well, that's what everybody else is thinking, too, right? And that's great, but you know, why did it stay in the lab so long? And sometimes these why did these ideas or concepts stay in the lab? And some of them should stay in the lab and not try to be a business, the bottom line. So but you just it's all about the strategy, it's all about, like I said before, it's all about what problem are you solving that's not already solved, and you know, quantum is such a huge, huge space, and it's still nascent in from an investment standpoint that you know you're gonna have this rush to the door, you're gonna have this, you know, let's see if we can get to the private markets, let's see if we can get acquired, let's see if we can do IPO, all this stuff. But in reality, they're just ready. They're just they're simply not ready. They don't have they don't have you know a VC with them, they don't know how to put together a deck, they don't have a CEO who's taking a company through the private markets, you know. So you you know, to to get one of these companies through the capital markets, you typically have to have a CEO or a team that actually has done it before, it's a good idea, right? Rather than say, oh, we can do it ourselves. Like work. So yeah, it's just it's just in it's interesting to see what people think and they come up to this aha moment, like, oh wait, that's why it's hard, you know, type of thing. So it's always interesting to see that.

SPEAKER_00 41:53

So on the capital side, um you you said that the the like the URL P say primarily family offices and corporate venture motor firms. Um I'm curious as to why those two groups are they more patient, kind of like why family offices, like what yeah.

SPEAKER_02 42:23

Still there, you know, being a family office, we co-invest together on deals, that's just how it works. So, you know, family offices are good because you know, number one, family offices weren't really a big deal 10 years ago. They weren't, people weren't talking about them. Now they're they're probably operating more like private equity, where there's trillions of dollars in capital in family offices, and those are basically born, it can be single family or multifamily offices typically, right? So, and they're they're generally born out of families that have had success with a business or multiple businesses. Yeah, uh, very real, some of them are very real estate focused, they've built a lot of wealth through that. So it's usually a real estate or they you know sold a business or company through one of the first generation or second generation. So, you know, what it is is they they usually have some sort of you know thesis or areas that they're good at, or they come from that area sector, so they like to invest in what they come from, which is great. Yeah, um, and then they're very um, they're very passive, so they don't need a board seat, and they usually have a much quicker due due diligence process. So if you're talking to like a corporate venture capital or you know, later stage private equity or whatever, um, you know, it's usually much, much longer, like months, right? So they have to go through series committee and all this stuff. Family offices, I've seen a family office make make a decision in 48 hours. Right. So so if they if if they like a deal, if they like you, if they met with a CEO, they've been through the data room, you know, for that that's I mean that's rare, but it can be as much as it can be like a week or two, right? Yeah so so that's really good for companies that need to raise capital rather quickly to keep to stay capitalized or to move towards better capitalization for their structure. Um and and plus they're um they're they're very patient capital. Yeah, so so if they invest in something, like we're along for the ride, we want to make sure that our return is there, and we we like what you're doing, we want to be involved. We don't know anything like you know, quantum technologies. You know, we we like the space, we have a deep tech focus, but we don't have anybody in quantum technologies. Let's invest in a fund. Yeah, here you go. So that that's why a lot of them are looking at us, um, starting to look at us. And then corporate venture capital is just you know, it's it's a whole other entity, but you know, you you start talking about you know, companies such as you know, Nissan, Toyota, Caterpillar, Microsoft, Nvidia, you know, Google, all these different companies have their own venture departments. Why? Well, they have so much capital on their balance sheet that they have to invest it in areas of technology that they think will generate a nice multiple or exit. So, so again, some of those companies may or may not have talent and or skill in quantum technologies, and uh they want to get access to that, they want to be involved in that, especially when it's early stage, uh, because that only helps their their uh their profile in not only the quantum industry, like, oh, we're Toyota, we're caterpillar, we're Google, we're whoever, but you know, we invested in psychology technologies with Qubit's Ventures. Here's why. So now they can say to their board, well, we're generating returns from quantum technologies, quantum compute intelligence. Yeah, we're ahead of our competitors, we're generating returns in that industry, and that helps their teams internally learn more about it, right? So it's a win-win situation for them and it's a win-win situation for us because we can bring value add to them in an area that they don't have enough expertise, you know, background to really make an investment decision, which is why they rely on us um to do our work.

SPEAKER_00 46:38

So, how do you um how do you view the relationship between quantum and AI? And you talked about the infrastructure layer. Um, I mean, obviously, at the moment there's more demand than there's supply. Um quantum provides high speeds, high outputs. I'm just trying to get your perspective on that interrelationship.

SPEAKER_02 47:08

Sure, great, great question. Um, so I think you know, I think when it comes to AI, I think, you know, I don't know about you, but I'm I'm using Gemini and Cloud every day. Yeah, that's what I do. I don't think I'm alone in that. I think um most people, especially in business, are using that just because it's more efficient. So just from an application layer, I think when you start to look at what AI is, how it's changing the landscape of literally everything we know in corporate America, and one of the reasons why automation is here to stay. Um, I think when you have that type of influence over small business, middle market, large corporations, that's great. But I think when when you talk about quantum, now you're talking about okay, now you have an engineering side of quantum, whether whether it whether it's um compute, whether it's sensing, whether it's defense, there's an engineering behind these companies and what problems they're solving, right? So if you start to factor that side in of what we're building at Cuba's Ventures, now you push that against what AI already is and what happens. Now they push each other to be to grow that much faster. So I I think it's funny I you asked that because I got that question when I was on a panel at USC in October of last year, and they said, What do you what do you think is happening? Do you think AI is you think AI is going to push quantum adoption, or do you think quantum is going to push AI adoption? I think I think it's both. I think both of them are pushing each other. Because I think once people see, like, okay, there's AI here, but yeah, how do I apply it? How do I use this? Well, if you start looking at AI and you put AI adoption into one of our companies on the engineering side, such as American Binary, which is solving defense and security issues, yeah, would you have right? And then you put that company engineering problem solving with AI, you start to see this um multiplier effect where I think they they continue to grow each other and they speed up compute, you know. Um by I guess the word is by bilaterally, I don't know. But that's that's what I think is happening. Um, and I think that's what's fueling the adoption because I think they both kind of need each other in a way to really solve the problems that that we're facing, whether it's defense, whether it's energy, whether it's supply chain, um, you know, biology and healthcare. One of the one one of the earliest adoptions of that we're seeing is a company by the name of Probius, which talk which is a bioanalytical. This is the first area. So biology and healthcare is already being affected, yeah. Because it's so you know, if you think about the adoption curve for biotech companies being adopted or passed through the F passed through the FDA, you know, 10 years to get a company through that, right? So we have a company in our porco by the name of Probius, and it's moving think about this, it's moving bioanalysis from a reogenic-centric to a data-centric approach. What does that mean? It's it's it's a bioanalytical platform that captures rich data, data-driven quantum data, integrates directly into AI workflows. Yeah, so it's exactly what I just said: quantum moving into AI, influencing AI, pushing it faster, but it enables faster diagnostics, decentralization processing, and it really accelerates insights for healthcare and drug development. So, what do you think that's going to do for like the world? Right?

SPEAKER_00 51:08

Oh, it's I mean, it's well for sure. AI, what it's quantum. My my biggest observation there is that it it allows us to go from one-to-many approach to one-to-one, everything will become personalized. Like, I mean, we we do a fair bit of work around biotechnology, and so now you can use AI instead of relying on one biomarker, you can use a series of biomarkers and aggregate them together to determine kind of like well, if what happens if if this then what? Um, so yeah, I mean it's pretty exciting, kind of like how AI. I mean, you you have Mark Zuckerberg and Priscilla Chan, like they're focusing on kind of like that foundation. Like, how do we use AI in terms of advancing healthcare? Right.

SPEAKER_02 51:50

So, yeah, no, I think I think I mean, I'm not to be honest with you, I've never been a big Zuckerberg fan, but what he's doing in healthcare, it's great. I mean, it's really great, you know. So I just wanted to share that with you to your question about how you know quantum is really directly into AI workflows. I mean, it's happening now, and they're actually they're raising a series A round that I'm helping out with. So but that that company's gonna change healthcare already.

SPEAKER_00 52:17

So yeah, do you uh so um question Do you do you see more data centers being built, more need for compute? Do you see things staying terrestrial? Do you see these moving to space? Kind of like what what did what do the next three to five seven years look like?

SPEAKER_02 52:40

Yeah, I'm I'm I'm smiling because I literally just had this conversation with a friend of mine at lunch like four hours ago, five hours ago. Yeah, he's probably he's probably gonna be he's probably gonna be an LP in the fund, but yeah, no, he and I told him because he was talking about like you know, he works in the energy space, and I said, you know, what do you think? Is is there a physical wall in compute right now? He's like, absolutely, there is there's been a physical wall forever. I mean, you got you got you always hearing the news now, it's like, well, we can't put a data center there. Um, where are we gonna put a data center? How let's try the ocean, right? Yeah, let's try, oh uh Elon can get us to Mars. We'll put a data center there. So you're already seeing this, like, we can't support our grid, there's not enough energy on the grid. So it's just it's kind of ridiculous at this point. But we're at this physical wall of compute, everybody knows it, whether they want to realize it or not, it's already here. So, what that means is this this quantum tunneling is what you're gonna what you're hearing. So it's really this physical energy barrier. So it's you know, macro macro level system bottleneck, so it's a classical infrastructure wall where you know traditional compute, zeros and ones just takes way too much energy, and that's why we're having to build so many uh data centers. What we think will drive adoption and is driving adoption is to my previous point earlier about PQC, QKD, cryptography, security around our financial center. The other reason why it's gonna adopt quickly is because of energy. Have to adopt to our energy adoption curve, and we have to punch through that. Whether it's yesterday or whether it's next year, uh, we think quantum tunneling is gonna drive that forward, and the reason why that is, is because when you think about quantum mechanics, not to get too technical, but you know, it's you have entanglement, right? You have uh dynamics around quantum computing where it's not just zeros and ones, it's always all alternating in that space, right? So um, you know, so you you have a much more efficient quantum compute architecture, and you use a tremendously less amount of power, so you're really solving two problems right there. Yeah, so that's where I think you're gonna start to see another reason why the adoption curve will is happening now, because the you know, to punch through these traditional physical barriers is driving several breakthroughs. One next gen photovoltaics, um, you know, that's one where you have these solar cells utilize tunneling transport. Another one is ambient and energy harvesting. So this is not this is it's actually a term I just learned, nonlinear effect. Or yeah, that's what it is. So, but it's a it's a it's a macro challenge, though. I mean, you know, it's it's something it's it's it's you know, it's it's a thermal and material wall. I think the path forward is really going to be to accelerate adoption past physical limitations through modern research, focuses on room temperature, which I mentioned the architecture earlier. Um and I think that neutral atom will lead that. Um, but they they don't require the massive crowd genet clean temperature. So I think you're gonna see that. That's where we're investing in, but they eliminate the need for extreme thermal barriers. So quantum energy devices can move closer to seamless integration with existing technologies. So I think you know that solves a lot of problems on our grid, on our architecture, and our power issues because the physical we have to punch through that. We have to punch through, you know, we just don't have enough energy because I think it you think it I don't know if it's any worse, but it used to be like a 98-2 ratio where you had like 98% demand and two percent capacity, or if you built a data center, it didn't matter if it was like a hyperscaler or edge, yeah. But you'd have as soon as you get as soon as the data center was built, as soon as the data center was built, the servers and racks were in the first hour because oh, we gotta get energy somewhere. I don't know where it is, or we gotta get energy somewhere. So you know it's yeah, that that can't continue, it just can't. So I think that's where you're gonna start to see, you know, companies that you know, like I said before, like um uh one of our pork os, I'll I'll mention again for your listeners is um Stigaldry Technology. They're literally they're literally a company that is developing quantum accelerated AI servers. So that is going exactly where I said about breaking that physical wall of traditional compute. So, you know, we're already ahead of the game there. So yeah, for sure.

SPEAKER_00 58:15

No, you you did. I mean, um we we see it first kind of we have a portfolio company that's that focuses on kind of behind the meter power generation assets and yeah um supplying that uh supplying these power. So we're seeing like the the master the event, whether it's on aerodrive, what it's in reciprocating anybody's kind of like provide providing that power where it's needed. Uh but Greg, I can talk to you forever. Like it's been super excited, uh super interesting conversation for me. Um so I really appreciate you coming on the pod and sharing your insights on quantum and what qubits is uh is investing in.

SPEAKER_02 58:54

Sure. Yeah, I mean I'd love to I'd love to talk to you further if you want to have another podcast or whatever. But yeah, we're love to talk to your listeners about qubits if that's of interest to you. But yeah, it's a it's a great time to be in the space. Hopefully, I I answered some of your questions that that was that was clear and concise and understandable. But I just wanted to share my insights on you know why the government invested in what they invested in, uh cryptography, security, energy, uh, some of the architectures, and just some of our thoughts on qubits and some of our forecasts. So yeah, it's it's a great time to be in the space and welcome any any outreach if you want to reach out to me. Umble. So absolutely.

SPEAKER_00 59:35

Thank you.

SPEAKER_02 59:36

Yep, thank you, Maxim.