A deeptech VC can see 300 to 500 deals a month and invest in only a handful. What separates the few that make it through?
Manoj Agarwal, Managing Partner at Seafund Ventures, walks through deeptech investing from the inside: how deals are sourced and filtered, how diligence works and the mistakes founders keep repeating.
What is deeptech investing, and how does Seafund Ventures approach it?
Seafund Ventures is an early-stage fund investing at seed and pre-Series A in deeptech and enterprise B2B technology. Manoj says deep tech grew out of an earlier focus on technology: the capital needs are lower than in consumer businesses, and the government now backs areas such as semiconductors, space and EV.
His approach is to expect every company to be a potential fund-returner, filter hard, run real diligence and support founders after the cheque is written.
- Heavy filtering. Roughly 300 to 500 deals arrive each month, narrowed to 30 or 40 for conversations.
- Gut gets you to the table, numbers close the deal. Every investment goes through diligence.
- Compliance early. Messy company formation and tax filings can sink funding or an acquisition.
- Careful with hype. Seafund backs AI as a tool inside real businesses rather than AI for its own sake.
What is Manoj Agarwal’s background and why did he start Seafund?
Manoj studied computer science at BMS College of Engineering in Bangalore and graduated in 1993. He built an IT infrastructure business and a multimedia training company, ran a chain of cyber cafes during the dot-com years and later an enterprise ISP. He also had stints in food processing and floriculture.
After a part-time management programme, he began advising companies and making angel investments. That led to a small angel fund that began investing in 2018 and backed about 14 companies, then Fund 2, which had its first close at the end of 2022.
Why does Seafund invest in deeptech?
Manoj says technology is often only an enabler in consumer businesses that need large capital. Enterprise and deeptech startups can survive hard phases with less capital.
Government focus has also widened the opportunity. He points to support for semiconductors and space, and says non-software engineering talent now has more routes into startups.
- Robotics, such as a portfolio company building robots to eliminate manual scavenging and for rehabilitation.
- EV infrastructure, such as a robotic battery swapping station for cars.
- Drone logistics, focused first on healthcare.
- AI SaaS applied to areas like fraud detection in insurance.
How does a VC filter hundreds of deals a month?
Seafund uses initial filters to cut 300 to 500 monthly deals to around 30 or 40 conversations. Referrals help because they come with some validation, and Manoj says they can come from other VCs, chartered accountants and even family.
He rates gut as a starting point only. A founder he met two years earlier in Abu Dhabi, for example, became an investment once he began raising and the firm completed its evaluation.
- Screen against stage, sector and valuation fit.
- Check whether a follow-on investor is likely to write the next, larger cheque.
- Test whether revenue can reach meaningful scale.
- Run a deep dive on compliance, finances, product and technology.
What does due diligence uncover in early-stage startups?
Manoj says most issues are fixable compliance gaps, and the firm helps founders correct them. Deals have been dropped when the technology claims did not hold up or the business plan, once corrected, showed the round could not even fund year one.
He stresses this is rarely deliberate lying. Often founders simply do not understand their numbers or overestimate how different their product is.
What mistakes do founders make on compliance and runway?
His favourite theme is compliance and financial management from day one. He has seen founders spend crores building a product with no company to account for it, and an acquisition that failed at diligence over such gaps.
He also warns that terms like SAFE notes do not translate neatly to Indian law, and that ESOPs are often created without understanding them.
- Form the company properly and record share allotments and ROC filings.
- Pay TDS, PF and GST on time, because small arrears can haunt a deal later.
- Know your burn and bank balance well before runway drops below three months.
- If revenue is steady, consider cutting costs to break even rather than shutting down.
How should founders think about AI hype and FOMO?
Manoj sees AI as a technology here to stay, but warns of noise. Seafund prefers companies using AI as a tool within a larger product. He gives enterprise examples where AI handles most of an accounting or compliance task and a human reviews the rest.
He describes sectoral FOMO, such as rocket companies that raised heavily, and cautions that high valuations can leave founders diluted.
How much does Seafund invest, and what is its plan?
Fund 2 plans to back up to about 20 startups, with a small slice reserved for follow-ons. Around seven deals are done, with 11 to 13 more planned over roughly 18 months.
First cheques go up to around half a million dollars, sometimes 250,000 to 300,000 dollars, in areas such as semiconductors, aerospace, mobility, materials and AI SaaS.
Further reading and sources
Frequently asked questions
What do deeptech VCs look for in early-stage startups?
Manoj Agarwal looks for real innovation, a path to meaningful revenue and a founder who can raise the next round. Compliance and financial hygiene also matter, since gaps can derail investment.
How big are Seafund Ventures’ first cheques?
Seafund writes first cheques up to about half a million dollars, and sometimes 250,000 to 300,000 dollars. The size depends on stage and valuation, and it covers pre-seed to seed.
Should an individual invest in startups directly as an angel?
Manoj says angel investing is close to a full-time job. If you cannot dive deep, he suggests investing through a fund or alongside someone who does it full time.
Conclusion
Manoj’s message is practical. Raise from investors who understand your space, keep your compliance clean from the start and know your burn long before it becomes urgent.
Before approaching a deeptech fund, check that your cap table, filings and numbers would survive a deep diligence review.
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