Scaling Deep Tech: The Growth Investor's Playbook from Woven Capital

Blog
Written By Greg Toroosian

The transition from a promising early-stage startup to a true industry leader requires a dramatic shift in focus: from proving technology to achieving repeatable, high-velocity commercial execution. This inflection point, often called the growth stage, typically Series B or C, is where the majority of deep technology companies struggle to secure the capital needed for scale. Understanding the precise metrics, strategic shifts, and corporate partnership opportunities that unlock this next level of funding is essential for any founder.

On Episode 105 of The Machine Minds Show, host Greg Toroosian, founder of Samson Rose, speaks with Manas Punhani, Senior Associate at Woven Capital, the $800 million venture fund strategically backed by automotive giant Toyota. Manas offers a candid view into the investment thesis of a fund focused squarely on the future of industrial technology and mobility, dissecting the path to massive scale, the critical importance of a founder's self-awareness, and the non-obvious operational details that ultimately determine a company's success in the physical AI sector. This episode delivers a crucial playbook for founders ready to graduate from a celebrated startup into a durable, profitable scale-up.

Manas Punhani: The Path to Woven Capital

Manas Punhani brings a unique, founder-driven perspective to the investment process, having initially started his career by founding a company in the education technology space. Following that venture, he gained an extensive financial and analytical toolkit through roles in consulting and investment banking, enabling him to evaluate investments rigorously. He later transitioned back to venture capital, with time at Andreessen Horowitz. 

Joining Woven Capital over a year ago, he focused on industrial technology, effectively completing the circle back to serving customers in sectors such as construction, manufacturing, and contracting.

Woven Capital's Growth Stage Mandate

The $800 Million Fund Backed by Toyota

Woven Capital is an $800 million fund backed by Toyota. The firm typically writes checks between $10 million and $50 million in companies that demonstrate early proof points, usually with a few million in revenue and established go-to-market strategies.

  • Strategic Alignment 

Investments are focused on directional areas relevant to Toyota. This means investing in technologies that Toyota may want to play in, or technologies that Toyota can leverage in the next two to three years to enhance capabilities, drive revenue, or improve its cost structure.

  • Broader Toyota Ecosystem 

The association extends beyond automotive manufacturing. Toyota also operates one of the world's leading material handling companies and is a major forklift manufacturer. This provides a substantial ecosystem where Woven Capital can add value and make introductions.

The Founder's Differentiator

What Makes a Pitch Stand Out

Manas emphasizes that at the growth stage, the focus shifts from proving the technology to proving the path to massive scale. The team looks for two critical elements in founders:

  • Deep Sector Understanding and Scale-Up Motion 

Founders must have a deep understanding of the sector they are selling into and a clear strategy for growing the business from $5–$6 million in revenue to $50–$100 million. They must show what has worked, what has not worked, and what must change.

  • Humility and Candor 

The most powerful message is from a self-aware founder who can say, "I have built a $6 million annual revenue business, and this is everything I have done wrong, and this is what I plan to fix with the next round of funding." This candidness provides investors with confidence about the ability to navigate challenges on the path to high growth.

Talent and the Go-to-Market Requirement

Deep Technical Expertise Meets Sales Motion

Manas notes that nearly half of Woven Capital's portfolio consists of hard tech or deep tech companies. When evaluating founders for these complex problems, they look for a blend of technical brilliance and commercial strategy:

  • Deeply Technical Founders 

Founders must possess a very keen understanding and insight into developing a great product.

  • Go-to-Market Team 

Alongside the technical founder, or a co-founder, the team must have a robust go-to-market strategy and a powerful sales motion. This is critical because industrial customers are traditionally slow adopters of technology.

  • Understanding Slow Sales Cycles 

Traditional software and consumer internet companies see massive outcomes because they have a faster sales motion. For industrial technologies like robotics, sales cycles are slow, making it essential to have a clear plan for selling the technology to a large industrial company. This commercial expertise does not need to sit with the technical founder, but must be represented within the team.

Smart Hiring at the Growth Stage

Hiring for the Next Level of Scale

When discussing smart hiring at the growth stage, Manas advises companies to hire people who can grow into their roles as the company scales:

  • Hiring for Growth 

A company must hire people who are a fit not just for its current size, but for its future growth stage.

  • The Scale Test 

If a company is doing $15 million in revenue today, and is hiring a VP of Sales or Head of Customer Success, the question is: "Is this person going to be able to grow into a role... to take you to $50 million to $100 million?" This means prioritizing candidates who have the potential and experience to handle a role that is several times larger than the current requirements.

Shedding Staff and Hiring Heavyweights

Greg emphasizes that a change in mindset is required when crossing from the early-stage to the growth stage. While hiring for the "right now" works for early stages, the Series B/C often requires "shedding staff":

  • The Zero-to-One Staff: 

The people who brought the company from seed to Series A are often not the right people to take it to the next level of funding and customers.

  • The Necessity of a "Heavyweight" 

A business must be self-aware of its changing needs. For instance, an early-stage "Head of Finance" might need to be replaced by a "heavyweight CFO" (Chief Financial Officer) or a "CRO" (Chief Revenue Officer) to lead the company to the next level of scale.

  • Self-Aware Leadership 

Founders must be self-aware of what is needed for the future, not just the present, and make decisions with their eyes wide open.

Balancing Tech and Commercial Development with Limited Resources

Manas addresses the challenge of balancing the technical team, customer development, and limited resources before securing larger capital. He advises founders to stay focused on the milestones required for the next funding round:

  • Focus on the Next Milestone 

Founders must always look toward what it will take to raise the next round of funding.

  • Prioritize Milestones 

If the requirement is to hit certain technical milestones (like a tech unlock), then the focus should be on the tech team. If the requirement is commercial traction, the focus should be on customer development, moving beyond prototypes and simple R&D/POC revenue to show actual recurring customer contracts.

  • Leverage Board and Investors 

Founders should leverage their board and investors, who spend their time understanding what it takes to raise Series A, B, C, or D, for strategic guidance.

  • The Power of Candor 

The hardest thing is that good news travels quickly, but bad news does not. Founders should be willing to share what they do not know and what the "unknown unknowns" are, as someone around the table may have the answer.

Avoiding Fundraising Red Flags

When asked about common mistakes or red flags he sees from growth-stage founders when fundraising, Manas points directly to a lack of realism. He warns against being too optimistic and showing an inflated hockey stick projection, such as showing a 5x revenue increase in the next year after the business has been flat for the last two.

Manas pointed out that investing at this stage is not like trading a stock; it is forming a multi-year relationship. Investors need to be able to converse and have a realistic conversation about what is possible and what is not, to figure out Plan A, Plan B, and Plan C.

Moreover, a high level of humility and candidness is what truly differentiates a founder. This transparency about risks and realistic challenges is essential for building the trust required to navigate the difficult path to scale.

Emerging Investment Themes: The AI Agent Advantage

Manas pivoted to an example of "unsexy industries" that now have massive venture-backed potential. He mentioned that the industry is paying for outcomes, but not seats. The rise of AI agents has enabled companies to go after workflows that earlier could not have been solved by launching a simple SAS or software solution. Manas explains that customers are now willing to pay for outcomes rather than just paying per seat. 

This dynamic is hugely powerful and is creating a path to billion-dollar outcomes in industries previously considered too small.

Overhyped Sectors: The Defense Tech Hype Cycle

Manas highlighted defense tech as a space currently experiencing a surge in interest and potential overvaluation.

  • The Anduril Effect 

While some of the interest in defense tech is justified, Manas notes that everyone looks at successful companies like Anduril and thinks, "I will be the next Anduril". This mentality is driving up valuations and round competitiveness.

  • Expensive Lessons 

Manas suggests that some of the valuations feel like a hype cycle. He cautions that there will be some expensive lessons that investors and founders will learn as the market figures out what works and what does not.

The Corporate VC Advantage: Value in Action

Woven Capital provides value to its portfolio companies in two primary ways through its corporate association. The team often refers to itself as a corporate Venture Capital (VC) fund.

  • Technical Diligence and Expertise 

The team can tap into Toyota's network of thousands of control, manufacturing, and assembly engineers with real-world experience. This allows Woven Capital to get real-time, expert feedback on whether a product has a viable path to being adopted in the hundreds.

  • Winning Government Contracts 

Woven Capital introduced a space portfolio company to Toyota. The two entities subsequently went out and bid for a project with JAXA, Japan's equivalent of NASA. They won the project, with the portfolio company's technology serving as one of the key components.

  • The Halo Effect for New Customers 

Woven Capital invested in an EV charging software company. The team performed advocacy work with other automotive OEMs (Original Equipment Manufacturers), leveraging the Toyota logo's halo effect. This helped the portfolio company unlock new customer relationships because other OEMs often think, "If Toyota is adopting this, maybe it is something worth spending time on".

Post-Investment Value: BD and Financial Strategy

When asked about his favorite part of working with founders post-investment, Manas named two key areas where Woven Capital acts as a hands-on strategic partner:

  • Aggressive Business Development (BD) 

Woven Capital is "out in the market a lot" and sees much more than a single founder would. This allows the team to help founders build commercial traction in new sectors, segments, and geographies, or make introductions to potential partners.

  • Sophisticated Financial Thought Partnership 

Manas, who spent years doing M&A (Mergers and Acquisitions), IPOs (Initial Public Offerings), and late-stage fundraising, serves as a thought partner to the CEO and CFO. The team helps founders think through complex financial problems, such as how to plan for the next fundraising round, or exploring non-dilutive capital options like equipment finance to fund new machinery instead of using precious equity. Because Woven Capital often backs highly technical founders, the team brings the necessary financial lens and experience to guide them on the path to scale.

Future Outlook: The Real Opportunity in Robotics

Looking ahead five to ten years, Manas pointed out that many manufacturing tasks are already highly automated: for example, welding and painting in a typical automotive plant are often over 80% automated.

  • The Assembly Challenge 

The real opportunity lies in the tasks that remain labor-intensive. Tasks like assembly and wire harnessing are difficult, daunting, and often dangerous work. Manas states the real potential is what companies can do with robotics, physical AI, and embodied AI to make these tasks easier, safer, faster, and more efficient, bringing better safety and efficiency to the industrial base.

Navigating Deep Tech and Hardware Realities

Weighing Tech Unlocks Versus Commercial Revenue

Manas confirms that Woven Capital wants to back the bravest founders, citing Stoke Space (reusable rockets) as an example. Woven was convinced to invest because the founders had demonstrated a consistent pattern of hitting key technical unlocks on target or before budget in previous stages.

  • The Importance of Technical Milestones 

Manas explains that it is acceptable for the next stage of growth in hardware, particularly in space or defense, to be a technical unlock that needs to happen, rather than an immediate revenue jump. Founders must be disciplined and clearly communicate these intermediate technical steps to investors.

  • Beyond Throughput: Safety and Uptime 

Manas highlights that founders often focus too much on throughput, the obvious north star for robotics. However, for broad adoption in a factory setting, operational concerns matter as much as, or more than, speed.

  • Safety Protocols 

Plant managers are equally concerned with safety protocols and how a robot, whether a humanoid, autonomous forklift, or AMR (Autonomous Mobile Robot), interacts with people. Without proper safety protocols, a plant manager will be hesitant to put robots in play.

  • Uptime 

Uptime is critical. Manas gives a specific, crucial tidbit: battery cycling time is a major factor. A system that charges for four hours and works for four hours is not viable for 24-hour factory shifts. The right solution is often battery swapping, not long charging cycles, as no one wants a robot operating only 16 hours out of 24.

Bonus Round: Investor Habits and Lessons

The Most Surprising Lesson in Venture

When asked about the most surprising lesson he has learned in venture, Manas points to a surprising reality about company risk:

  • Fixable Problems 

It is commonly thought that companies with slow growth or high burn are the biggest worries, but those are problems that the investors and management can sit down and fix together.

  • The Unfixable Problem 

The true danger is when founders are not candidly sharing what is going right and what is going wrong. Manas notes that when things are not going well, founders sometimes withhold information, and by the time investors learn of it, the ability to change course is severely diminished.

Tools, Apps, and Habits for Staying Sharp

Manas shared two key mechanisms he uses to stay organized and sharp:

  • Productivity Habit (Notetaker + Notion)

He uses a notetaker, Affinity's default, on every call to capture a summary of next steps, which he then links via Zapier into Notion to generate a weekly to-do list summary.

  • Industry Tool (Quarter App)

A key professional tool he loves is an app called Quarter, which centralizes the financial information needed for a company. This allows him to immediately pull up critical metrics, such as public market valuation multiples for a specific sector (like robotics), directly on his phone, which is essential for evaluating growth-stage deals.

Key Takeaways

  • Founder's Focus

Growth stage founders must focus on self-awareness and have a clear, candid plan to scale from single-digit millions to $50–$100 million in revenue.

  • The Biggest Risk is Candor

The true danger in venture is not high burn or slow growth, but a lack of founder candor, which delays necessary course corrections until it is too late.

  • Smart Hiring

Hire for the next stage of growth, replacing early-stage generalists with "heavyweight" functional leaders (CFO, CRO) capable of scaling the company from $15M to $50–$100 million in revenue.

  • Resource Prioritization

For limited resources, founders must ruthlessly prioritize either technical milestones or commercial traction based on what is explicitly required to unlock the next round of capital.

  • Team Structure

For deep tech, the founding team must combine deeply technical product expertise with a powerful, realistic go-to-market strategy capable of navigating slow industrial sales cycles.

  • The Agent Advantage

The rise of AI agents is creating venture-backed opportunities in "unsexy industries" by enabling companies to be paid for outcomes rather than just per-seat software licenses.

  • Uptime is Critical

For industrial robotics, factors such as safety protocols and uptime (emphasizing battery swapping over long charging times) are often just as critical as throughput for broad factory adoption.

  • Woven's Strategic BD

Woven Capital uses its broad market view and portfolio success team to drive collaboration, win contracts, and unlock new geographies/customers, leveraging the Toyota logo's halo effect.

Conclusion

Manas Punhani provides a candid view into the mind of a growth-stage investor, highlighting that capital allocation is a long-term relationship built on trust and realistic planning. The key to securing later-stage funding in complex sectors is demonstrating not just technological capability, but a deep, self-aware understanding of the specific operational and commercial paths required to achieve massive scale.

Always Stay Ahead

Connecting visionary organizations with exceptional talent.

Samson Rose is a top-notch robotics, hard tech, and AI recruitment company.

Greg Toroosian
Previous

The North Star IP Strategy: Wilson Sonsini Insights on Patenting V10, Not V1
Next

AI and Automation Unlocking Materials Discovery: Radical AI's Vision