Many people believe that the process for achieving breakthrough innovations is chaotic, random, and unmanageable. But that view is flawed, the authors argue. Breakthroughs can be systematically generated using a process modeled on the principles that drive evolution in nature: "variance generation," which creates a variety of life-forms; and "selection pressure" to select those that can best survive in a given environment. Flagship Pioneering, the venture-creation firm behind Moderna Therapeutics and one of the most widely used Covid-19 vaccines in the United States, uses such an approach. It has successfully launched more than 100 life-sciences businesses. Its process, called "emergent discovery," is a rigorous set of activities including prospecting for ideas in novel spaces; developing speculative conjectures; and relentlessly questioning hypotheses.

This note provides essential information on funding sources and valuation topics facing deep technology startups-ventures that are capital-intensive, with high technical and market uncertainty, and require long gestation periods. Both dilutive and non-dilutive sources of investment are described, along with empirical examples and figures.