Lux Q2 2023 Report

Lux Q2 2023 Report

Drifting Ever Upwards 

Quarrelsome questions abound. Are we facing an imminent recession or have we improbably dodged one? Have markets corrected from the excess of excesses of recent years or are they amnesically ascendant again? Is labor poised to combat capital and demand higher wages, benefits and healthcare? Is the world uniting against resurgent and revanchist threats or once more divided? Is America’s comity crumbling under the coarse caricatures of our politics or are we finally healing to fight against exogenous foreign threats? Will AI turn into another punctuated hype cycle, accrue influence to tech’s imposing incumbents, usher in insurgent upstarts and a changing of the guard, or yield a runaway existential threat to us all?

Yet our recent winter of discontent has transformed into a heedless summer of love.The wanderlust of free-spirited souls have surged into airline cabins and hotel lobbies, boosting travel to vertiginous heights. Market investors, once weary in the warrens of winter, have assembled themselves into a passionate phalanx of purchasing, pushing indices to year-to-date highs. The dreary doldrums of the recent downturn in venture have once again resurrected into the rapid resurgence of reckless risk.

It is easy to get lost in these peaks and troughs, longing for a glassy sea. But we must remind ourselves that human progress does not come from equanimity, but rather in the untamed and riotous competition of ideas on the very edge of human intellect. Yes, all things – in markets and in life, alike – wax and wane, but there is always an arc of progress. Stock prices are difficult to predict, dancing like gas molecules to a Brownian beat – but we do know they move with a positive upward drift. We humans may always be at war with ourselves – but despite that, we too drift upwards: relentlessly charging forward, our innovations making yesterday’s best into tomorrow’s commonplace.

While it’s a cliché that those who don't know history may be condemned to repeat it, the corollary is that those who don’t know history are mistakenly nostalgic or ignorant of how awful most of it was. A lower-income high school student in theU.S. today can live a better life than Cornelius Vanderbilt and the robber barons of yesteryear. To punctuate the point in one word: dentistry. But more seriously, the former has a higher quality of life and lower odds of suffering from a fatal illness like measles, leprosy, smallpox, and tuberculosis; she enjoys the material comforts of flushable toilets, clean water, climate-controlled rooms, and always-available and dimmable electric lighting; plus, she consumes a wider variety of foods while using labor-saving appliances like microwaves, fridges, freezers and gas or electric stoves. The benefits just keep arriving. She has access to swift emergency responders, more informed doctors and nurses, greater justice and public accountability, as well as superior choice for materials and comfort in clothing. She can use previously inconceivable vehicles to safely and quickly travel thousands of miles, learn nearly anything in the palm of her hand, access the world’s store of knowledge, watch endless entertainment while accessing all of history’s static and dynamic art in paintings, photos, television, movies and music.Perhaps most importantly, she has the ability to instantly communicate with anyone in the world—to see and be seen. From 90% of the world living in extreme poverty, now less than 10% do.

ThePox of Pessimism—Or Why Stuff Always Seems Worse Than It Really Is

Like countries, the past and the future are places, and the great measure of their desirability is whether more people are trying to move there or leave.Against a backdrop of rising rates, declining markets, falling valuations, rising illiquidity, struggling funds, retrenching limited partners, and trenchant turmoil overseas, our last letter struck a surprisingly forth right note of optimism. We spoke of the prosocial, conditionally optimistic “futureforming”that our founders and we at Lux do every day, activities that drive a long arc of possibility.

It’s an arc that rests invisible behind the headlines—which sound like a new verse to Billy Joel’s We Didn’t Start the Fire: opioids, fentanyl, Trump indicted, Biden falls, polarized politicians weaponizing populism, suicides and depression, culture wars in ascension, obesity, floods and drought, everyone full of doubt! We’ve written in past letters on why news tends to be negative: finger-pointing politicians amplifying why everything is terrible; the evolutionary logic to pay attention to pain, which feels twice as bad as pleasure feels good (“if it bleeds, it leads”); the asymmetry of how long it can take for construction (slow) versus destruction(quick); and social-media technology behaving like momentum algorithms to intensify all of these things.

We like to say that front-page news reflects the cacophony of consensus and is almost immediately factored into capital market prices. It’s why we prefer pageB22 to A1, the short article tucked away with editors and readers alike missing its salience. While the front market pages parade a panoply of parameters and predictors like interest rates, inflation, currency movements,GDP growth and employment statistics, there is a rarely discussed metric we think everyone should and will know about and understand: time-price.It’s a metric that captures human progression, irrefutable measures of optimism and productivity driven by invention, innovation and technological change.

Introducing:Time-Price (measured not in dollars & cents, but in minutes & hours)

Back in 1798, Thomas Malthus looked at the geometric growth in population against the arithmetic rise in food production and famously (and wrongly) predicted an inevitable famine. The Club of Rome, 174 years later, predicted much the same as did Paul Ehrlich in his treatise The Population Bomb, forecasting that hundreds of millions would starve to death in the 1970s.Societal collapse has not only failed to occur, but our planet has remarkably not exhausted a single natural resource

Measuring quantities is imperfect so a better measure is observing prices. Recall the famous long-term bet between Paul Ehrlich and Julian Simon that Ehrlich would be held correct ifa basket of commodities picked by him would be more expensive (indicating scarcity) by the end of the decade, whereas Simon would win if the basket were less expensive (indicating abundance). Simon won. And he won because his opponent was measuring abundance or scarcity by counting stuff (how many crops we grow, oil barrels we drill, aluminum we extract). Simple counting, though, fails to factor in technological breakthroughs (the growth of knowledge) like those in genetics that led to larger harvests and yields on less land such as with the Green Revolution pioneered by NobelPrize-winning agronomist Norman Borlaug. Counting also skips over substitutions (like gas for oil) or efficiency gains driven by incentives for owners and capital to do more with less (consider Coke cans which use far less aluminum today).

Simon, on the other hand, observed prices, with rising ones implying scarcity and falling ones, abundance.

Now, we all know that price is a market signal, information for producers to produce and consumers to express choice. The less interference with markets and prices, the more honest and useful the signal, and the more efficiently resources are allocated to the production of goods and services. But forget nominal price (what you see on shelves) or real price (when economists adjust prices for inflation—the devaluation of a currency—itself a widely reported, but impossibly imprecise measure). Both of these are money prices:measured in dollars and cents.

In contrast, time-price is measured in seconds, minutes and hours.To get a time-price, simply divide the nominal price of a good or service by nominal hourly income, and the answer is how long you have to work to buy something. While we notionally buy things with money, we are really conducting the economic alchemy of converting our time through labor (and thus wages) into goods. As long as your hourly income rises faster than nominal prices, time-price falls and abundance reigns over scarcity.

Every nominal price we remember as kids, from a pleasurable pack of saccharine BubbleYum to the sensational schadenfreude of the New York Post (but we repeat ourselves), was way cheaper. But so were wages.Time-price normalizes this nonlinear complexity. Wages change over any individual’s life (from what we earned shoveling high piles of snow as teenagers versus what we earned founding a high-tech nuclear-waste cleanup company as adults) just as productivity changes within collective society (capital creating technology to save labor whether on the farmstead or the switchboard).

As we will see shortly, if we take almost any category and view it through time-price, it is hard to refute the continuous improvement in humanity’s quality of life over time—a positive upward drift driven by productivity gains.That’s because new knowledge, new technology and new innovation lets people produce more with less. Time-price captures the impact of innovation in a novel way occluded by money prices. Forget CPI, PPP, GDP, Beige Books or any other complicated and imprecise measures. Time-prices allow us to calculate universally over space (between any cities or countries) and overtime (between any year, past and present). Compare bananas in TheNetherlands in 1850 and bananas in New York in 2023. And best of all––unlike currency or economic figures––time is a universal constant that flows in one direction, can’t be inflated or cheated, is applied equally to all of us and is independent of what people do.

The idea of time-price is as elegant as it is maddening that it was only recently put forth by Marian Tupy and Gale Pooley. The two were building on the work of Nobel Prize-winnersBill Nordhaus and Paul Romer, which was furthered by two Lux friends, CesarHidalgo and George Gilder. The latter simplified the idea into a great reframing of economic concepts of wealth, growth and money: wealth is knowledge, growth is learning and money is time. These thinkers have collectively shown that the world isn’t just an arrangement of zero-sum atoms that we will exhaust, but instead that there exists endless combinatorial possibilities of arranging those atoms that only comes from knowledge and learning—positive-sum ideas. An hour of work today affords far more than any other time in the past, and that is because human ingenuity created innovations that increased productivity, which allowed all of us to consume more for less and free up more time to generate even more new ideas. This is an arc of progress: we drift ever upwards. 

Time-PricesReveal A Compounding Cascade of Creativity & Progress

In Nordhaus’s words: 

One modern hundred-watt incandescent bulb burning for three hours each night would produce 1.5 million lumen-hours of light per year. At the beginning of the last century, obtaining this amount of light would have required burning seventeen thousand candles, and the average worker would have had to toil almost one thousand hours to earn the dollars to buy the candles.In the modern era, with a compact fluorescent bulb, the 1.5 million lumen-hours would need twenty-two kilowatt-hours, which can be bought for about 10 minutes’ work by the average worker. 

Now consider: if one bunch of bananas costs 50 cents per pound and you make $10 per hour, it costs you $0.50 / 10 = 3 minutes. If bananas rose in price to 60 cents but your wage nearly doubled to $18 per hour, now it would cost you $0.60 / 18= 2 minutes, so the time-price of bananas is now cheaper by 33% even as nominal (and presumably inflation-adjusted real prices) increased. All kinds of other calculations follow that show not just increasing abundance for individuals, but entire populations. Ehrlich was right about collapse, but wrong about the subject. Society didn’t collapse—time-prices did.

This new accounting of abundance is true of nearly every product category one might investigate. From hammers to bikes to shipping: a hammer from Sears in 1902 cost 53 cents or four hours of hard labor, while today a hammer is a whopping $6.50 but only 12 minutes of work for the median wage-earner. A$100 bike on Amazon costs ten-fold more than a bike a century ago, but hourly wages skyrocketed 185-fold over the same time, so the time-price has fallen more than 90%. Take the 1979 Sears catalog, and look up any item’s price then and compare it to the 2019 prices for those same items from Walmart. Then divide both by the respective hourly wages of average U.S. blue-collar workers($8.34 in 1979 and $32.36 in 2019). Every product’s time-price plummeted:coffeemakers (-65%), toasters (-75%), blenders (-79%), vacuums (-83%),dishwashers (-62%), shavers (-74%), hairdryers (-67%), sneakers (-67%). 

Pickup trucks and most vehicles dropped by half in terms of time-price. What about air conditioning? A/C was first invented in 1902 in Brooklyn to solve a problemwith the sweltering summer humid heat in the building of a local publisher.Fifty years later in 1952 and no longer an industrial luxury, the average costof an air conditioner was $350, and with average wages prevailing then at$1.72, workers had to toil 204 hours to afford one. Jump forward 67 years, andWalmart’s quiet, remote-controlled, energy-efficient unit cost $178 and workers earning the average wage of $32.36 would have had to work a mere 5.5 hours toafford it, meaning access to A/C fell 97% in time-price between 1952 and 2019.

During the same period, electricity went from 1.8 cents per kilowatt-hour to 13.9 cents per kilowatt-hour, but with wages rapidly rising, the time-price of electricity fell 59%. The same calculations are available for televisions, DNA sequencing, plastic surgery and even for the cost of calculation itself. The slide rule Buzz Aldrin carried on Apollo 11 in 1969cost $10.95. Given an average wage of $3.72 per hour, it took nearly three hours of work to buy a tool capable of one calculation per second. In 2020, the iPhone 12 cost a whopping $699 with an A14 chip that could do not one calculation per second but 11 trillion. With average hourly wages having risen to $33.98, it would take 20 hours of work to afford it. Those same three hours of time in 1969 bought a scant single calculation a second, but by 2020the same work translated to 1.4 trillion calculations—a compound doubling of value every 20 months.

And how did all that stuff get to the store in the first place? The first shipping container was conceived as a modular unit by maverick Malcolm McLean in 1956and the first ship carried a total of 58 containers. Today’s super-Panamax cargo vessels hold not just that big innovative entrepreneurial idea but 24,000of them, drastically driving down the cost to move ever more abundant varied atoms in endless configurations from toasters to tablets around the world.

Nearly30 years ago, an utterly improbable company named Cadabra was founded by a30-year-old entrepreneur. This year alone, that company now known as Amazon will deliver over 1.8 billion items to Prime members in the U.S. either same or next day—and it takes just 11 minutes on average for a same-day warehouse to get an order out for delivery. A testament to humanity’s progression, driven by combinatorial creativity, incentives and competition.

Finally, consider the productivity, not just of making something, but of generating new knowledge and searching through it. Not so long ago, searching for information would have required a trip to the library, an hours- or days-long arduous search through an archive, and then fumbling around with a fragile and decaying medium like microfiche, all just to photocopy it. Today, you can instantaneously search, or even more instantaneously, query chatbots and large language models to receive well-sourced answers. What we are now able to do in milliseconds has taken millennia of compounding knowledge in order to make sand sentient. The silicon of sand that we have transformed into ingots inscribed with precisely patterned circuits of intelligence contain the compounded know-how from chemistry to lithography and electricity to extreme ultraviolet lasers. It’s human wisdom imbued into one of the Earth’s most common materials.

The duo behind the research on time-prices, Tupy and Pooley, like to note that there are 12 notes and 88 keys in a piano, but they ask—how many songs are there in a piano? The answer is none—they are all in human heads.

Human ingenuity and the combinatorial possibility of ideas is the ultimate resource that drives time-prices lower across all categories.And that is a cause for conditional rational optimism. Unlike deer, humans don’t freeze in the face of oncoming headlights hurtling toward them—instead they hustle, invent, speculate, share ideas, try, fail, succeed, compete and doit all over, again and again. It’s how the Dutch over generations impressively futureformed ever-evolving engineered solutions to stave off fatal flooding––and surely how other countries encountering environmental risk today will do the same so long as similar systems of property rights, incentives, competition and markets are also in place.

Human progress is best measured in time-prices. The most striking conclusion from all this research is that, contrary to doomsayers and degrowthers, more people on the planet has helped to decrease time-prices, because more people means more ideas and more possibilities for a one-in-a-billion insight that could improve our ability to do more with less. The bigger the population, the better the odds of discovering real genius or good luck. However, having more people is necessary but not sufficient––otherwise we would have seen India and China exporting technology and knowledge to the rest of the world instead of importing American cars, chips, computers and Covid vaccines. Progress requires a welcoming environment, one where people can freely come together to evolve ideas through conjecture, freely ask others to criticize those ideas, and for these entrepreneurs to be able to freely test those ideas in open and fair markets

TheSearch For Progress

Humanity’s positive upward drift doesn’t occur by default. At Lux, we believe that science and technology are the only practical means by which we can ever hope to take destiny into our own hands. It is no surprise that Lux strives to back the founders pushing on the frontiers of scientific knowledge and understanding and who will ultimately drive us all forward. Consider HuggingFace, which is reducing the time-price of intelligence: democratizing machine learning technologies such as Large Language Models—once closely guarded by the high priests inside the walled gardens of large tech incumbents such as Google or Microsoft or OpenAI–by open-sourcing hundreds of thousands of models and datasets. Consider RunwayML, which is reducing the time-price of creativity: leveraging AI to dramatically lower the barriers to top-grade visual effects and animation, allowing smaller teams to create the biggest-budget film experiences. Consider Benchling, which is reducing the time-price of scientific research: transforming the productivity of wet lab scientists through an end-to-end data and collaboration platform designed specifically for research and development. Consider Anduril, which is reducing the time-price of national security: creating software and hardware products that are keeping America and its allies out of harm’s way.Consider OpenSpace in construction and Ironclad in legal services, which are dramatically lowering the time-prices of both blue-collar and white-collar services. Consider Eikon, Maven Clinic, Kallyope, and our other life sciences companies, which are reducing the time-price of healthcare by lowering the cost of care delivery or are bringing potentially life-saving drugs faster and more cheaply to market. Progress—measured by time-prices—has dramatically improved over the past century, and yet, when we look at the edges of what’s possible, there are still so many defining innovations ready to be discovered—and funded

The open and free search for progress is something we believe in deeply, and we feel fortunate to live in the United States where we are able to speak and invest freely in advancing the human condition while solving wicked and thorny problems. In addition to practicing what we preach every day at Lux, we also preach what we practice. Twice this quarter, Lux partners were invited to testify and did so before the U.S. Congress, first on artificial intelligence alongside AI leader and Lux-family company Hugging Face, and then onU.S. competitiveness in critical emerging technologies amidst rising conflict with the Chinese Communist Party—a rare source of bipartisan concern.Critically important, this is not conflict with China writ large, nor Chinese people and especially not Chinese-Americans. We hold great hope for receding hostilities and common ground for collaboration on technological, scientific and economic grounds. Alas, hope is not a strategy and we need a cogent strategy to contend with conflict so as to reduce it.

In the appendix of this letter we include the full written testimony submitted for the Congressional record addressing a few key issues: the morality of our investing at Lux  (that when we ship U.S. technology, we are shippingU.S. values; and when we import foreign technology, we are importing foreign values); the importance of technological sovereignty (de-risking dependence within our companies on sole-source suppliers, vulnerable or concentrated supply chains, especially ones that may seek to gain or use leverage in tit-for-tat escalation as we have seen with China’s gallium and germanium restrictions as reaction to restrictions by the U.S. on chip access for cutting-edge AI); and the necessity of attracting and retaining the best and brightest globally (our country, our technologies, our companies, our economy, and our social fabric have all been built by immigrants. Talent, like capital, goes where it is welcome and stays where it is well-treated, and we ought to be the shining beacon on the hill for all). The progress that comes from investing in people inventing the future, as we do at Lux, is a source of competitive advantage—a driver of our economy, prosperity and opportunity for others––especially in the U.S. but also the world over. 

While many talk about a balance of powers, the falling of time-prices offers an even more important testimony about progress: the spirit of innovation is not zero-sum. The combinatorial frontiers are consistently and unwaveringly positive sum. The sun is always shining in the future. We drift ever upwards.

Appendix:Written Testimony Before the Select Committee on the Chinese Communist Party,U.S. House of Representatives

As submitted to the Hearing on “Commanding Heights: Ensuring U.S. Leadership in the Critical and Emerging Technologies of the 21st Century” held on CapitolHill  in Washington, DC on July 26, 2023.

Josh Wolfe

Co-Founder andManaging Partner

Lux Capital

ChairmanGallagher, Ranking Member Krishnamoorthi, and distinguished members of theSelect Committee:

Thank you for inviting me to share my views about the importance of U.S. leadership in the development of critical and emerging technologies.

My name is Josh Wolfe, co-founder and managing partner of Lux Capital, a $5billion venture fund with offices in Silicon Valley and New York City. I was raised in Coney Island, Brooklyn, by a single, public school teacher mother, amidst towering public housing, with a dream to be one day amidst the towering intellects of scientists and investors who showed that American science and entrepreneurship can be a force for good in the world. Today, I have the tremendous privilege, alongside my Lux partners, to identify dreamers who are turning science fiction into science fact. Already, we have funded hundreds ofAmerica’s finest scientific entrepreneurs.

Those entrepreneurs are inventing at the edge of America’s technological frontier, turning the impossible into the inevitable by building in the literal and figurative stratosphere of air, land, sea, space, and cyberspace.

Lux invests in four core areas. We invest to secure our life and environment through companies like Anduril Industries, which is transforming and modernizing defense technology by providing state-of-the-art AI solutions to the U.S. national security community. And through Saildrone, which is deploying a fleet of unmanned and autonomous sailing drones to collect and analyze data from the far reaches of the ocean and in hurricane conditions at a fraction of the cost and without risking human lives.

Lux invests to supercharge productivity through companies like Applied Intuition, which equips autonomous vehicle manufacturers and the Department of Defense with software for faster and better autonomous vehicle testing, as well as through Primer, which is building mission-ready AI to help analysts and operators make sense of vast amounts of data to improve the speed and success of decision-makers.

Lux invests to enable creativity and free expression through companies like HuggingFace, the world’s leading community-oriented platform with the mission to democratize good machine learning through open science and open-source code.

And finally, Lux invests to reduce human suffering and advance human health, in companies like Kallyope, which integrates cutting-edge biotechnologies and Nobel Prize-winning research to understand gut-brain biology that will lead to transformational therapeutics to improve human health and nutrition.

America’s open scientific culture and free speech are at the foundation of every one of our companies. That’s why at Lux, we will not — and have never — funded startups in unaligned, antagonistic, and adversarial countries to America. We invest in matter that matters, not profit over principles. 

“Matter that matters” is also the matter that I am here to discuss today. The scientific entrepreneurs whom we support are re-imagining the future, saving lives on the battlefield and at the patient’s bedside, but to continue their work and effectively compete with our global competitors, Congress must support long-horizon science, help bridge the world to America and vice versa, and defend America’s open values from foreign interference.

1. Support For Long-Horizon Science

None of Lux’s companies would exist without decades of foundational work by scientists exploring the vast unknowns of human knowledge. Many of our startup shave been built on career-spanning, Nobel Prize-winning research now being commercialized thanks to pioneering laws like the Stevenson-Wydler Act and Bayh-Dole Act. Laws like these provided U.S. innovators with new freedom and flexibility to commercialize and benefit from federally funded research and development. 

Career biologists face debilitating competition for limited NIH basic science research grants, jeopardizing American science. Defense entrepreneurs similarly face the prospect of short-term funding programs, many of which have been musical chairs of leadership, reporting lines, and congressional authorities.

To compete with the CCP, we must remain united in our shared pursuit of scientific and technological development. Americans must put our partisan differences aside to lead the globe in discovery and in influence. Congress can do this by quieting the shifting winds of annual scientific research funding and by affording academic institutions, small businesses, entrepreneurs, and investors the stability of compromise in service of the greater good. We must be able to show the CCP — and the whole world — that, although pluralism can be messy, our diverse voices come together stronger than any authoritarian regime and our individual pioneers can propel us faster and further than any centralized plan.

America must commit to advancing scientific progress and its commercialization by upgrading current funding institutions and building new ones that cultivate long-term horizons of excellence. Constant funding deadlines, burdensome administrative overhead, and onerous publication requirements do not be get great science but rather extinguish American discoveries before they even start. America can and must do more to give our scientists the freedom they desperately need to consider the hardest questions — and answer them.

2. Americans in the Service of the Nation and in the Service of All Nations

I am fortunate to live my own version of the American Dream, a dream I work everyday to share with hundreds of millions of my fellow citizens and billions of others across the globe. The American Dream is our greatest asset in the global competitive landscape, and we must continue our tradition of seeking and attracting ambitious individuals from everywhere.

Many of Lux’s entrepreneurs and brightest contributors are immigrants, from Vietnam,Pakistan, India, Israel, and yes, even China. With intention, America should be attracting defectors and accelerating China’s brain drain to our national benefit. Talent — human capital — like financial capital, goes where it is welcome and stays where it is well treated. We must continue to welcome the best talent on the planet to the U.S. by expanding exceptional talent and entrepreneur visas to qualified immigrants. 

But even as we build up American prosperity and excellence at home, we must also look abroad to advance prosperity and opportunity for all people around the world. America’s technological advantage is strengthened through collaboration with our allies and should be vigilantly guarded from our adversaries. 

TheCCP, through its Belt and Road Initiative, has offered the world a model of development driven by centralized planning while spreading its surveillance and control with callous disregard for human and property rights. Even so, the CCP’s sustained and often exploitative investments in the developing world have shifted the public and elite opinion of dozens of countries to its favor, particularly in Latin America and Africa.

While the CCP exports authoritarianism and disdain for human rights, the U.S. should export our technological ingenuity fostered right here at home with talent from anywhere. Through thoughtful engagement and sustained investments abroad, theU.S. can continue to help provide a clear choice for nations in search of amore prosperous future. We cannot afford to retreat from the world. Our country and our scientific prowess would suffer for it 

3. Defend Free Speech, Privacy, Open Science and American Values Against ExternalThreats

America’s greatest strength is the ability to speak freely, associate widely, and connect spiritually with others without legal restraint. These are Enlightenment values, and they are at the heart of what has made American science the most ambitious and successful in the world. It’s why we call Lux, “Lux” – light inLatin. Radical proposals of new discoveries are quickly matched by extensive and informed scrutiny, ensuring that humanity progresses one argument at a time.

Americans vociferously disagree on the issues of the day, a normal and healthy function for any democracy that considers the voice of the people to be the power behind government. But what we can all agree on is that foreign interference in our universities, scientific institutions, companies, economy, and political systems has no place for a sovereign people who self-govern.

The CCP has leveraged an incredible array of tactics to sideline America’s interests. It has attracted American scientists through the Thousand Talents program, offering its largess coupled with the proviso of political constraints. State-directed and state-financed cyber hackers have regularly infiltrated America’s most innovative companies, exfiltrating our discoveries and know-how for its own benefit. And the CCP has regularly squelched overseas dissent by threatening human rights dissidents with extensive consequences if they don’t toe the CCP line.

American science and American entrepreneurship rely on a system of open ideas, unfettered markets, and fair competition to ensure that the best inventions win over consumers and businesses. Meanwhile, the CCP has expanded its campaign against freedom beyond China’s borders. Attempts by the CCP to silence its critics on our home soil and diminish the openness of American creativity threaten the very foundation of our model of governance and economics.  We must respond to those threats head-on through coordinated efforts of law enforcement at all levels of government by sharing information, cultivating public-private partnerships, and educating the private sector on ways that anyone can find help when they need it.


Today, America’s scientific entrepreneurs are inventing the future, a future that Lux finances every single day. There is not a moment when I question the strength of American ingenuity or the resolve of our best talent in building theAmerican Dream I and all of our fellow citizens want to be a part of.

Asa culture, we reap what we celebrate. If we fixate on celebrities, our kids want to grow up to be rich and famous. If we celebrate scientists and engineers, doers and creators, we inspire kids to pursue space exploration, seek cancer cures, solve for limited energy resources, sustain the habitability of our planet, and win Nobel Prizes.

What’s needed right now is an enduring dedication to protecting what makes America different. Our openness to new ideas and new people allows us to discover the very fundamentals of the natural world. Our freedoms allow us to update old ways of thinking and build the foundational companies of the future. And our spirit of competition allows for the best ideas and products to win in a fair marketplace.  

I believe that failure comes from a failure to imagine failure. To avoid failure, we need sustained commitment to long-term scientific funding, reflection on our bedrock principles of welcoming immigrants, and recommitment to fight forAmerican values like freedom of speech and privacy worldwide. By doing those things, we will illustrate the clear contrast between a world led by the US and a world ruled by the CCP.

Aspart of our compliance with the provisions of certain privacy regulations issued by the United States Federal government, we are required to provide individual investors with notice of our firm’s policies and practices relating to the use and sharing of personal information.

We are committed to maintaining the confidentiality, integrity and security of our current and former investors’ non-public information. Accordingly, we have developed internal policies to protect confidentiality while allowing investors’ needs to be met.

Wewill not disclose any non-public personal information about investors who areindividuals, except to our affiliates and service providers as allowed byapplicable law or regulation. In the normal course of serving our investors,information we collect may be shared with companies that perform variousservices such as accountants and attorneys. Specifically, we may disclose tothese service providers non-public personal information including: 

  • Information we receive on subscription agreements or other forms, such as name,     address, account number and the types and amounts of investments.
  • Information about transactions with us or our affiliates, such as participation in     other investment programs, ownership of certain types of accounts or other     account data.

Any party that receives this information will use it only for the services required by us and as allowed by applicable law or regulation and is not permitted to share or use this information for any other purpose. To protect the personal information of individuals, we permit access only by authorized employees who need access to that information to provide services to the fund and its investors.In order to guard investors’ non-public information, we maintain physical, electronic, and procedural safeguards. An individual investor’s right to privacy extends to all forms of contact with us, including telephone, written correspondence and electronic media, such as the Internet.

Please be assured that we are committed to protecting the privacy of non-public information about you.

written by
Josh Wolfe
Co-founder and Managing Partner

Josh co-founded Lux Capital to support scientists and entrepreneurs who pursue counter-conventional solutions to the most vexing puzzles of our time in order to lead us into a brighter future. The more ambitious the project, the better—like, say, creating matter from light.

Josh is a Director at Aera Therapeutics, Cajal Neuroscience, Eikon Therapeutics, Impulse Labs, Kallyope, Osmo, Variant Bio, and helped lead the firm’s investments in Anduril, Echodyne, Planet, Hadrian, Osmo and Resilience. He is a founding investor and board member with Bill Gates in Kymeta, making cutting-edge antennas for high-speed global satellite and space communications. Josh is a Westinghouse semi-finalist and published scientist. He previously worked in investment banking at Salomon Smith Barney and in capital markets at Merrill Lynch. In 2008 Josh co-founded and funded Kurion, a contrarian bet in the unlikely business of using advanced robotics and state-of-the-art engineering and chemistry to clean up nuclear waste. It was an unmet, inevitable need with no solution in sight. The company was among the first responders to the Fukushima Daiichi disaster. In February 2016, Veolia acquired Kurion for nearly $400 million—34 times Lux’s total investment.

Avoid boring people. –Jim Watson

Josh is a columnist with Forbes and Editor for the Forbes/Wolfe Emerging Tech Report. He has been invited to The White House and Capitol Hill to advise on nanotechnology and emerging technologies, and a lecturer at MIT, Harvard, Yale, Cornell, Columbia and NYU. He is a term member at The Council on Foreign Relations, a Trustee at the Santa Fe Institute, and Chairman of Coney Island Prep charter school, where he grew up in Brooklyn. He graduated from Cornell University with a B.S. in Economics and Finance.

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Lux Q2 2023 Report

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