Rethinking Deep-Tech: Why Technology Readiness Levels Belong in Every Investor and Founder's Vocabulary
In the 1970s, NASA engineers invented a nine-point scale to describe how close a technology was to flying on a spacecraft. Five decades on, it has become the clearest shared language deep-tech has.
Pooja Akkem
Associate, SilverX Fund
What Are Technology Readiness Levels?
In the 1970s, NASA engineers faced a deceptively simple problem. They needed a precise way to describe how close a new technology actually was to flying on a spacecraft, something sharper than "pretty close" or "almost there." They needed a language a program manager and a scientist could both agree on, without ambiguity.
The answer was a nine-point scale. They called it Technology Readiness Levels, or TRLs. Five decades on, that scale has quietly become a global standard, adopted by the European Commission, the U.S. Department of Defense, ISRO, DST, and virtually every deep-tech funding programme in the world.
The nine levels are:
| Level | Name | Description |
|---|---|---|
| TRL 1 | Basic principles observed | A paper exists, a scientific phenomenon has been identified. Nothing more. |
| TRL 2 | Technology concept formulated | A potential application has been proposed, still on the whiteboard. |
| TRL 3 | Experimental proof of concept | Early lab experiments validate individual components under ideal conditions. |
| TRL 4 | Technology validated in lab | Components integrated into a working system at small scale, in a controlled setting. |
| TRL 5 | Technology validated in relevant environment | The system is stress-tested with real-world inputs and conditions. |
| TRL 6 | Demonstrated in relevant environment | A full prototype operates in conditions close to real deployment, where engineering takes over from science. |
| TRL 7 | Prototype in operational environment | A prototype is operating in an actual deployment environment: in orbit, in a Phase II trial, on a live factory floor. |
| TRL 8 | System complete and qualified | Final form, certified, manufacturing understood. The last cliff before commercialisation. |
| TRL 9 | System proven in operational environment | The technology is operating at scale with paying customers. |
Why TRLs Matter for Investors
The single greatest mistake in deep-tech investing is treating the journey from TRL 4 to TRL 7 as a straight line. This stretch is where most deep-tech companies die, a stretch practitioners aptly call the valley of death.
A working lab prototype is not a working product. A working product is not a manufacturable product. A manufacturable product is not a certified, regulated, sellable one. Each step costs more than the one before, and most deep-tech companies never make it through.
At each zone, capital requirements, timelines, and risk profiles shift dramatically:
| Zone | TRL Range | Typical Capital | Time Horizon | Primary Risk |
|---|---|---|---|---|
| Grant / Academic | TRL 1-3 | Rs.1-5 Cr | 3-7 years | Science risk: the underlying science may simply not work |
| Deep-Tech Venture | TRL 4-6 | Rs.10-100 Cr | 3-5 years | Engineering risk: the science works, but can it be built? |
| Growth Stage | TRL 7-9 | >Rs.100 Cr | 1-3 years | Commercial risk: manufacturing, go-to-market, regulatory clearance, unit economics |
Blending these stages in a portfolio without appreciating the differences is a common way for deep-tech funds to stumble. A seed cheque into a TRL 3 company and a seed cheque into a TRL 6 company may look identical on a cap table, but they are fundamentally different bets.
Why TRLs Matter for Founders
For founders, TRLs serve as a diagnostic tool. Most deep-tech pitch decks leap directly from "we have validated the science" to "we have a $10 billion TAM," a jump that silently assumes eight levels of work have already been completed.
Placing your company honestly on the scale delivers three concrete benefits:
- Realistic capital expectations. Advancing from TRL 4 to TRL 5 may cost a few crores. Advancing from TRL 7 to TRL 8 in hardware, biotech, or space can run into hundreds of crores.
- Target the right investors. Early TRL companies need patient capital, non-dilutive grants, and strategic partners. Later TRL companies are better suited to mainstream venture capital.
- Sharper internal planning. The milestone that moves a company from TRL 5 to TRL 6 is typically a specific, engineerable artefact, not a vague commitment to grow the team.
Where the Framework Falls Short
TRLs were designed for hardware and aerospace. They sit awkwardly on software-heavy companies, where readiness depends more on data quality and deployment context than hardware maturity. Biotech has its own staging system (preclinical, Phase I, II, III) which maps onto TRLs only loosely. And TRLs say nothing about whether a market exists. A TRL 9 technology with no buyers is still a failed company.
Even so, as a shared language for honest conversations between founders, investors, and technical advisors, the framework is difficult to beat. It forces specificity. It surfaces hidden assumptions.
Case Study: Dhruva Space
A TRL walkthrough with a real Indian deep-tech company
Dhruva Space was founded in 2012 by Sanjay Nekkanti, who at 19 had built his first satellite as part of the SRM University team that launched SRMSAT aboard PSLV-C18. That experience at TRL 1-3 gave him the foundation to attempt commercialisation. The co-founders joined in 2018, and the early years through TRL 4 focused on engineering satellite platforms, subsystems, and orbital deployer concepts in the lab.
Between 2017 and 2021, at TRL 5-6, the team integrated and validated their satellite bus in simulated space conditions: thermal vacuum chambers, vibration tables, radiation exposure. In June 2022, at TRL 7, Dhruva's Satellite Orbital Deployer was space-qualified on ISRO's PSLV-C53. In November 2022, Thybolt-1 and Thybolt-2, India's first privately built satellites, launched on PSLV-C54, completing over 1,000 orbits in LEO.
In April 2024, Dhruva raised a Series A to support a 280,000 sq ft spacecraft manufacturing facility in Shamshabad, Telangana, the TRL 8 stage of productising satellite lines across Cubesat, Nanosat, and Microsat with a growing commercial order book. TRL 9 lies ahead: repeatable, at-scale commercial missions across earth observation, national security, communications, and human spaceflight, with IPO ambitions in the 2028-29 window.
The key insight is this: an investor funding Dhruva at TRL 6 is underwriting engineering and integration risk. At TRL 8, that same investor is underwriting manufacturing execution and market demand. Same company, very different bets depending on when you showed up.