Episode summary
A Venture Capitalist on Investing in Science, China, and More | At Barron's
At Barron's
· · Hosts: Andy Serwer · Guests: Josh Wolfe
Summary
Josh Wolfe says Lux Capital is built to back “people who are inventing the future,” with the firm split across healthcare, aerospace and defense, and core technology rather than consumer internet, social media, or ad-driven software. He argues that Lux’s geographic and sector structure is designed to avoid the silos that can fracture venture firms over time, with partners expected to move fluidly across New York, Silicon Valley, Europe, and Asia.
Wolfe thinks venture capital is entering a shakeout. He says AI and aerospace are thriving, while many SaaS and enterprise software names face margin pressure. In his view, the industry has too many small firms that are under-reserved and too many mega-firms that have become less welcome as a source of capital; he expects many minnows to disappear and a few large platforms to go public.
He also frames Lux’s work as “scitec diplomacy,” using scientific breakthroughs to build global partnerships in places like the Middle East and Asia. He is bullish on AI as a hardware-to-model-to-application race, but he sees China as a real rival in both technology and information influence. Separately, he says Lux has expanded its science helpline to support scientists whose funding has been cut, especially in areas where he thinks U.S. science has lost ground to China.
Key takeaways
- Wolfe says Lux Capital avoids consumer internet and instead focuses on healthcare, aerospace and defense, and core technology.
- He expects venture to undergo a mass extinction among under-reserved small firms and a consolidation among mega-firms.
- He sees AI as the biggest global competition, spanning chips, models, open-source policy, and applications.
- Wolfe argues China is both a technology rival and an information-warfare rival, especially around censorship and social media influence.
- He says Lux is increasing early-stage science investing, including work with scientists whose grants were cut, to preserve U.S. scientific advantage.
Notable quotes
“we invest in people who are inventing the future. And um we do high-tech ventures”
“if you're in AI and you're in aerospace and defense, they're going amazingly well. And if you're in SAS and some enterprise software, you're probably seeing margin compression”
“I think 50% of these firms might disappear in the next few years”
“Most countries have diplomacy on a military level and an economic level. But where we specialize is in the engineers and the founders and the university professors”
“What you and I Andy would call reality. But those guys are not playing video games. They are actually training the machines on thousands of simulations a second”
How the episode opens
Hello everyone and welcome to At Barons. I'm Andy Serur and welcome to our guest Josh Wolf, venture capitalist, co-founder and managing partner of Lux Capital. Josh, welcome. Great to see you. — Andy, great to be with you.
So, first off, maybe give us a thumbnail sketch of Lux Capital. What do you guys do there? Oh, we invest in people who are inventing the future.
And um we do high-tech ventures. So about a third of what we do is healthcare. That's like uh robotic surgery, med devices, biotech, healthcare, IT.
Another third is aerospace, defense, pretty cutting edge things in air, land, sea space, and cyber, pretty much every domain, manufacturing, industrial. And then the final third is what we would generally call core technology, which is more defined by like what we don't do. So very little that most VCs might do in internet and social media and mobile and advertising and video games.
We don't really touch that. And we do more sophisticated things like cutting edge semiconductors and edge inference chips and non-invasive brain machine interfaces and things that sometimes seem like they're sort of closing the gap between sci-fi and sci-fi.
Yeah. I want to ask about what you exclude just quickly because you know for a while of course social media and all those apps you know for dogs and stuff was the rage. Not so much. Now, we'll get to that. But why did you never go down that path?
Well, part of it was competitive advantage. Uh, you know, if if we wanted to be able to win the right to partner with a founder, we needed to be distinguished. And for most of the people that were already existing VCs when we were starting, we had no shot to compete.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- venture capital
- science investing
- china investing
- firm investments
- market conditions
Companies and tickers mentioned
- Lux Capital
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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