Dakin Sloss: Investing in companies that make money while making a difference

Prime Movers Lab founder Dakin Sloss talks to Yahoo Finance's Julia LaRoche about his venture capital firm's financial and philosophical commitment to breakthrough scientific companies aimed at improving people's lives. Sloss is part of Yahoo Finance's exclusive list, THE NEXT: 21 to watch in 2021.

Video Transcript

DAKIN SLOSS: I'm Dakin Sloss. I'm the founder and general partner of Prime Movers Lab. And in 2021, I have my eye on technologies that are going to feed the planet, provide clean energy, and help address this mental health challenge that we're facing as a civilization.


JULIA LAROCHE: I'm pleased to bring in Dakin Sloss. He is the founder and general partner of Prime Movers Lab. This is a venture capital firm that invests in breakthrough scientific startups. You are 30 years old. You have just raised your second fund. And we are seeing big name investors like Bill Ackman, Dmitry Balyasny, and Joe Lonsdale. Let's talk a bit more about the opportunities you're chasing.

DAKIN SLOSS: Yeah, I mean, for me, my life is about service. It's about how can I contribute? How can I make a difference? So it was a no brainer for me that I wasn't going to be interested in investing in a social media company, or the next iPhone app, or something like that. Those are great businesses, no offense to the people that backed those. But for me, I've always been motivated about, how can I leave this planet, how can I leave humanity in better shape than when I got here and make my small part in contributing to our story as a species?

And I think that the things we're investing in are the most important things to do that. So for example, in our first fund, we have Heliogen, which is basically using sunlight in order to produce industrial heat. So for applications like cement production, steel production, glass production, ultimately hydrogen fuel production-- doing that in a way that's clean and energy efficient. We've got COVAXX, which is a coronavirus vaccine that is going to be serving billions of people across Latin America, Africa, Southeast Asia, where they otherwise couldn't afford a vaccine.

We have Unlimited Tomorrow, which is a prosthetics company helping to provide prosthetics to people at affordable prices, but also really advanced technological prosthetics that make their lives much better.

JULIA LAROCHE: I know one area that you're particularly interested in is space. Let's talk about the opportunity as it relates to space. What do you see there and how big do you think this space could be?

DAKIN SLOSS: If you look at what's happened in space recently because of what Elon and SpaceX have done, the cost of getting off our planet to low Earth orbit has gone down dramatically. It used to be $100,000 plus a kilogram. Now it's down to $5,000 or less a kilogram, and going even lower shortly with the new types of vehicles that they're launching. And so what that really means is suddenly the space economy can become, I think, a multitrillion dollar economy over the course of our lifetime. And that's going to be for things like space manufacturing, data centers in space, energy production in space.

And one of our most successful investments has been Momentus, which is going public, the SPAC merger that's already been announced with Stable Road. And they're basically the infrastructure layer for space. So they make it possible to move things around in space, so that after you've launched to low Earth orbit, you can get to the ultimate destination that you want to get to. And this is a really key enabling technology. I think of this time in space similar to what the railroads did for the US, where it suddenly opened up the whole country and a whole new line of businesses we couldn't have even imagined before that popped up along the railroads. The same thing is going to happen in space, now that transportation costs have come down so much.

JULIA LAROCHE: How do you think about your investment philosophy? Sometimes I hear folks who talk about being very much founder-led when it comes to deploying capital. How do you approach investing?

DAKIN SLOSS: The commitment that we make to our founders is that the least useful thing we provide is capital. And how do we do that is we roll up our sleeves and we're really servants to the founders.

JULIA LAROCHE: You were a founder yourself of OpenGov, of Tachyus. So how did that shape your own, I guess, business experience? And why do you think the mindset and the psychology is so important for the founder?

DAKIN SLOSS: Well, when I started my first company, I was 20. I had no idea what I was doing. I wasn't very good at it. And I was very arrogant, as I think a lot of 20-year-old folks are. And I got my butt kicked, if I can say that. I learned a lot of lessons the hard way. And I hope that I can help founders make new and exciting mistakes, rather than repeating the particular types of mistakes that I made.

JULIA LAROCHE: What were some of those lessons that really stayed with you from those early days?

DAKIN SLOSS: Well, one of my mentors was Joe Lonsdale, the co-founder of Palantir. And he taught me something very early on that I think is really important, which is that companies are like people. They need heartbeats, they need rhythms. Really at this point, we look for people that are very much relationship-oriented. All of these are very collaborative environments, where it's important to have that value on community and connection. And we look for people that are not driven by just doing something for themselves or being in the spotlight, but they're looking to do something bigger than themselves. They're looking to contribute to a mission bigger themselves. And we've got lots more detailed like personality profiles and assessments and things that we use, but that boils it down in a nutshell.

JULIA LAROCHE: Dakin, we're recognizing you as one of 21 people to watch in 2021. So I'm sure a lot of folks are interested in knowing what is on your radar? What are you keeping an eye on in your head?

DAKIN SLOSS: There's a few areas I'm really passionate about right now that I think are just at the beginning of what they can do. So if you look at one of the fallouts of the pandemic, for example, I think we have 300 million people around the world that are facing mental health challenges of some sort. And that's a mind blowing number and really, really disturbing for any of us that care about human well-being. At the same time, we're starting to see a number of psychedelic compounds be taken through clinical processes, where there's really good initial data and there's thousands of years of historical data of how much of an impact that can have on the average person's mental well-being and health, particularly when someone struggling.

So I'm really excited about that and what the opportunities to do for mental health are in that. In addition to that, as we talked about, I think space is just at the beginning. And what's often interesting at these inflection points where you're seeing a lot of hype start to happen about space or about psychedelics, is it can feel to the average person like it's being overhyped. When in fact, in reality, I think it's actually probably being underhyped and it's being undervalued, even at this point, as like the buzz starts to gather around it. So those are some of the areas that I'm most excited about. I could probably go on for a long time though.