Building Hardware for America’s Future with Discipulus Ventures’ Jakob Diepenbrock

Jakob Diepenbrock is the founder and general partner of Discipulus Ventures, an early-stage fund and residency backing hardware startups solving critical problems in El Segundo, California.

How did you get into venture capital and what led you to found Discipulus?

I’m from the Seattle area and started a company in high school. Through that, I ended up meeting the guy who ran Steve Ballmer’s family office and worked there while I was in college. I was the youngest person on a very small team, so I met a lot of really interesting people and got to do some big-picture analysis of the venture world.

Around that time, I met Augustus Doricko, who was founding Rainmaker in El Segundo. I came down to El Segundo and really liked what was happening here. People in this area really want to be solving mission-driven, hard problems for the country. For example, SpaceX pays like a third of what Blue Origin pays, yet they get the best engineers every time because people want to be solving the most important problems for the country. Most of the companies focused on these problems are in Los Angeles. 

I saw that there was no early-stage fund here despite it becoming very popular to build companies here. The supply chain, talent and customers for hardware and aerospace/defense companies are all centralized here. So in March 2024, we did our first cohort with 10 founders. We help them get plugged into the network here and provide a peer group of people with similar values and focus and ran our first demo day. Our third demo day two weeks ago had 200 investors from the Valley come down.

What’s your investment thesis and what types of founders are you looking for?

We do two batches per year with 10 companies per batch, focused on hardware for critical industries with some software when it makes sense. The founders who work best with us are young technical people with experience in the industry they’re targeting and an almost obsessive attachment to the problem they’re solving.

Take one of our companies, Durin, a mining company. The founder’s family has connections to mining, he’s always been interested in it, and he worked at MP Materials in college. These types of founders have what I’d call almost a divine right to solve their problem.

Our goal is to find people with the technical skills, market understanding, and deep drive to solve a specific problem. We provide them the network and understanding of how to build a venture-backed company in this particular niche. We’re not teaching step by step. We’re connecting them with the best people in the world for what they’re trying to build.

You mentioned the unique culture in El Segundo. What exactly is that culture?

The people here aren’t motivated primarily by money, though they’re going to make a lot of it. They’re deeply obsessed with problems they think are their life’s mission to solve. I’ve had friends turn down amazing offers from other companies because they realize what they’re doing at companies here is more important.

These are people who care about the country, care about the West and the values it stands for. They want to solve these problems because if we don’t solve them, we’ll lose to somebody else. That’s a pretty strong driving factor. It’s not just “I care about building this B2B SaaS app because it’s probably going to help people.” The problems here are objectively extremely critical.

Is El Segundo becoming the spiritual successor to Silicon Valley?

Silicon Valley is still where most investors and software talent are, which is helpful. But if you look at early Silicon Valley, a lot of it was selling into the Department of Defense (DoD). Much of the early chip innovation came through DoD money. The people solving those problems back then weren’t doing it because it was consensus — it was contrarian at the time and they had to deeply care about the mission/technology to end up in the valley.

I think it’s become too easy now to just go to YC, raise money, and treat building a company as step two after getting a degree. That attracts people who just want to do it for the credentialing instead of actually trying to solve a problem they care about. What’s happening in El Segundo is more like that early Silicon Valley ethos.  People putting something on the line to solve real problems they deeply care about.

There’s a perception that hardware requires tremendous capital. What do you think about that?

In reality, the capital intensity thing isn’t really true. If you look at fundraising by software versus hardware companies, the top software companies raise more money by stage than hardware companies. Polymarket just raised a few hundred million. What’s that actually going into? It’s not building hardware.

Hardware founders are able to prove things stage by stage. At pre-seed, you build the minimum viable product. At seed, you start talking to customers and working with design partners. You can prove these concepts out step by step. Many of our companies raised $1 million or less in their first round. With that funding, they were able to make real products that they’re now selling to customers. By contrast, I see software companies raising significantly more money all the time.

What areas are you most excited about right now?

We’re pretty founder-focused versus sector-focused. We’ve done mining, energy, manufacturing and even two companies in apparel and shoe manufacturing in the U.S., which have similar tailwinds to other sectors. Mining is obviously exciting given China cutting off rare earth exports. But I’m never like “this is an area where I need to see a company built” because usually if investors are saying that, they’re late. The founders on the ground trying to solve problems see them first.

What’s a contrarian view you hold?

I think a lot of investors are too focused on the obvious American dynamism industries. There are many areas downstream of these general tailwinds that are being overlooked. Like our apparel manufacturing company — all of our clothes are made in China. There’s less focus on these types of non-obvious areas versus defense/aerospace, but they have the same tailwinds.

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