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Frequently Asked Questions

What is HAX?

What is HAX?

HAX is SOSV’s hard tech startup development program. We make multi-stage investments in pre-seed and seed companies that are addressing challenges in human & planetary health. We back founders rethinking the future of industrial sustainability, solving pressing climate change problems, and making a meaningful impact on human health through the use of sensor data, robotic automation, biomanufacturing, Internet of Things (IoT) platforms, AI, and more.

We support founders with initial pre-seed capital of $250k while providing hands-on engineering resources and expertise to help founders build advanced prototypes, de-risk their businesses, and demonstrate product-market fit. Extensive design, sourcing, business development, marketing and fundraising support is also provided. Afterwards, we continue being a channel of support and can deploy follow-on investment through various funds up until Series C.

What is hard tech?

“If you drop it on your foot does it hurt?” If the answer is yes, it’s probably hard tech. Hard tech refers to the application of physical based sciences to develop technological solutions that are enabled by hardware. Driven by a vision for a fundamentally better future, as the name implies, hard tech is hard to build! It requires engineering and integration, and looks to meet civilization-level opportunities, most notably in human and planetary health.

What types of companies does HAX look to back?

We have a bias towards technical teams building products for validated problems in three main areas:

  1. Climate Tech: These companies are solving pressing problems to reduce carbon emissions and address climate challenges. By creating innovative solutions centered around renewable energy, energy storage, battery recycling, circularity, biomanufacturing, advanced materials, and the “energy transition”,  our climate tech startups are pushing the boundaries of science and technology.
  2. Healthcare: Our healthcare companies are committed to making healthcare more effective, accessible and affordable using data, novel treatment protocols, and breakthrough medical devices and enabling tools. They are building solutions for advanced cancer diagnostics, sleep disorders, mental health, urine & blood analysis, molecular diagnostics across important use cases and areas of unmet patient needs.
  3. Industrial Independence: We support companies reimagining the future of manufacturing through sustainable solutions designed to evolve with our growing planet. These companies are questioning how we make things, and the products we make, to enable secure, robust supply chains through the use of automation, robotics, biomanufacturing, and circularity.

What makes HAX different from other programs?

Four main things:‍

  1. We only invest in hardware companies. Our unique focus lets us offer very specialized, targeted help to companies building solutions at the intersection of the physical and digital. We’ve invested in and supported over 300 companies and counting, giving us unique expertise to de-risk these businesses from an early stage.
  2. Hands-on help. We have a team of mechanical engineers, electrical engineers, industrial designers, sourcing staff, creatives and business development specialists that execute on prototyping, design for manufacturing (DFM), strategy, customer engagement, sales and marketing alongside you. In addition, we partner with you to make curated introductions to our global network of investors, to help you raise next rounds of funding.
  3. Onward funding and continued support. We can continue supporting teams with follow-on financing of up to $5M over your company’s lifetime. We also provide continued access to our facilities in Newark and Shenzhen, helping teams with manufacturing and R&D.
  4. Our global and diverse community. One of the most valuable aspects of HAX is our community of hard tech founders, who have been through the same experiences & challenges that you face. Many have been successful, all have learned hard lessons, and everyone is committed to helping each other succeed. Our community has grown to include a curated group of mentors, experts and partners that give our hard tech startups the best edge.

What is the difference between HAX and SOSV? And what is SOSV?

SOSV is a multi-stage venture fund that operates the startup development programs IndieBio, HAX, and Orbit Startups.  HAX is SOSV’s hardware investment & program team, and it maintains offices in Newark (New Jersey), Pune (India), San Francisco, Tokyo, and Shenzhen.

SOSV is currently investing from SOSV Fund V, and SOSV Select, our $100M follow-on fund. SOSV has over $1.6B in assets under management. SOSV is headquartered in Princeton, NJ and incorporated in the US.

SOSV Managing General Partner Sean O’Sullivan founded SOSV in 1995, following the IPO of MapInfo, a startup he co-founded that pioneered computer-based street mapping. O’Sullivan is deeply committed to human and planetary health through entrepreneurship and technology, and he is actively involved with all the programs.

O’Sullivan has donated tens of millions in profits from his investments to charitable causes, including the Khan Academy and CoderDojo, as well as many other educational and humanitarian efforts. He resides in Princeton, NJ.

SOSV’s limited partners include primarily include endowments, foundations, family offices, wealth management platforms, funds of funds and corporations, including Credit Suisse, Tiedemann Advisors, Davy Group, ZX Ventures (the strategic arm of Anheuser-Busch InBev), HP Ventures, and Sumitomo Corp. In SOSV’s Fund IV ($277 million), 50% of the limited partners are located in North America, 25% in Europe, and 20% in Japan and Korea, South and Southeast Asia.

The Program

What’s the difference between the Newark, Shenzhen, Pune, and San Francisco offices?

When a team is admitted to the HAX program they are introduced to our global teams in Newark, Shenzhen, Pune, and San Francisco. Our 35,000 sq ft facility in Newark, NJ is where most of our teams join us to work directly with our on-site staff, who offer hands-on workshop and lab support, in addition to advancing your marketing, sales and next-round fundraising efforts. Our Newark team helps coordinate each startup’s day-to-day interactions with our Shenzhen, and Pune teams, who are focused on carrying out engineering, design, and manufacturing work, as well as strategic sourcing, and fundraising.

In 6 to 18 months (depending on the level of technical complexity of the product), we work with startups to de-risk the cost, performance and manufacturing challenges, positioning founders to start converting customers and raising your next round of capital.

What support does HAX offer?

We recognize that building physical products and hardware involves a variety of challenges and we help founders with full stack support in:

  1. Engineering: We have a team of mechanical engineers, electrical engineers, and mechatronics engineers who help construct prototypes, carry out experiments to test performance, and execute towards manufacturability.
  2. Industrial Design: Our industrial designers work through interaction, usability and aesthetic challenges with your product.
  3. Sourcing: We help you source production grade parts for your prototyping. This process also helps you understand the Shenzhen supply chain.
  4. Creative: The creative team helps you with creating branding, sales and marketing assets to support your narrative.
  5. Business Development: Our business development team mobilizes our corporate and LP connections to help you secure pilots and win customer contracts.
  6. Fundraising and Strategy: We work with you to lay the groundwork for growth and further fundraising for your company, and make curated introductions to our global network of  investors.

Where can I hope to be by the end of the program?

Rough framework:

  1. Run multiple prototyping cycles to reach Engineering Validation Testing (EVT) within the program and prepare for Design Validation Testing (DVT).
  2. Finish an industrial version of your hardware that takes manufacturability and human factors into account.
  3. Fix your BOM, engage in vendor selection and scope out your supply chain.
  4. Create sales and marketing assets like demo videos, website explanations, dashboards, product photographs and decks.
  5. Deliver on early pilots or convert pilots to paying customers.
  6. Set overall company strategy leading up to your onward funding round.
  7. Identify key hires (especially on the hardware side).

What kind of support can I expect as an alumnus?

Once you’ve graduated from HAX, you continue having access to our internal channels to stay connected to our founder community. We also make our workshops, labs, and coworking spaces available to you until such time as you raise a Series A (up to a certain number of people, of course). Additionally, feel free to reach out to us with any questions regarding your R&D, manufacturing issues, factory negotiations and investor introductions. You might be done with the program but we are invested in your success and are here to help.

 

 

The Deal

How much does HAX / SOSV invest? What are the terms?

Our first investment in your startup is $250,000 which converts to a pre-negotiated equity stake at a later date. We use an instrument called a Post Money SAFE which has no valuation cap and instead specifies our target ownership outright so as to keep cap table calculations clean. Unlike a loan agreement or convertible loan note, a SAFE is typically non repayable and is interest free. (Read more on SOSV’s legal FAQ.)

It’s important to note that the $250k investment is broken up into $150k in cash and $100k in in-kind support. The investment is paid out at thirty day intervals over the course of the program.

Why is part of the investment paid in kind?

This is what it costs us to hire a body of technical, marketing and business staff to support our startups, pay rent for our office space + workshops + bio-lab and maintain prototyping equipment. Over time, we found that startups were spending a lot of our investment dollars on contracting out hardware engineering functions. By creating our own in-house support and sharing it across teams, we’re able to drive these costs down.

Why are the payments tranched?

When building a physical product, things can get overwhelming and teams get tempted to spend their way out of problems. Hardware is capital intensive and we truly believe that founders need to establish constraints, set milestones and figure problems out creatively in the early days of the company. Of course, we are here to help at every step of the way and have no problem making payments should you be running short on account of unforeseen circumstances.

What sort of follow-on funding does HAX / SOSV provide?

Most of SOSV’s capital is invested at the later stages. We can invest in follow-on rounds usually up to a Series C/D, through our new  SOSV V fund or our growth fund, SOSV Select. Across these rounds we can deploy an aggregate total of up to $4M per company. We rarely lead rounds and will most often just ask for a non-voting, observer seat on your board (along with information rights so we know what’s going on and how to help).

Application

What do I need to apply to HAX?

Every application is different. For instance, we might view a team with deep domain expertise that has built similar products to their new, intended one with a different lens than a team very early in their prototyping process. Similarly, early progress for medical devices looks very different compared to, say, enterprise applications. That being said, there are some common characteristics that we are on the lookout for:

  1. A validated problem: We love it when teams have discovered a large, urgent problem by speaking with lots of potential customers (or from their own personal experience).
  2. A strong founding team: The typical HAX team has strong engineering ability combined with customer obsession. We like it when teams don’t become too obsessed with product for product’s sake and spend the time to truly understand their customers and the business to be built.
  3. A working prototype: We want to see what you’ve built so far to get a sense for where you’d be able to get to with our resources. We don’t expect your prototype to be overly polished but we would like it to be a working hypothesis for how your target customer’s problem would ultimately be solved.

What happens after I apply?

We try to read all applications within two weeks and email prospective founders interview requests soon after. Sometimes this process takes longer when application volumes are very high. If you haven’t heard back from us within a month, please feel free to ask us for feedback. We try to respond to everyone and provide feedback but this is not always possible.

What are some common reasons for rejection?

The most common reasons for rejection are:

  • The problem is not large enough to be a venture-backable company.
  • The company is still at concept stage and the team hasn’t submitted a demo of a working prototype.
  • The product exists in a very crowded space.
  • The product lacks defensibility (with either technology, network effects, high switching costs, deep process expertise, or some other method).
  • The company has been started by a sole founder with a team of contracted engineers with no skin in the game.
  • The product has no relevance to hardware (eg: an e-commerce app).

What does the interview process look like?

There are a minimum of three and a maximum of four interviews, if you make it to the final stage (mostly done remotely, though in-person is great if you happen to be in a nearby geography). Schedules permitting, we try to wrap up all the interviews within two weeks of the first one and then give you a decision. Every year, there seem to be 4-5 companies for whom we have to coordinate diligence with people from outside of HAX and this lengthens the process. We’re always working to make this faster.

Logistics

How often do cohorts start?

We invest into teams on a rolling basis, and typically admit 2-3 teams every month.

Is there a place where I can speak with other founders?

Yes. We have an internal Slack channel, a founder portal and a wiki to help you stay in touch with the HAX and wider SOSV founder communities.

Are there any perks on offer?

Yes, we have a whole host of perks including AWS and Google credits, Solidworks discounts, Hubspot discounts and many others. The total value of these perks stands at $1M per team.