The Deep-Tech Spin-Off Trap: Why Asking a CEO to Build the Reservoir and Bring the Rain for Free is Doomed to Fail

Having spent over a decade working closely with Institutes of Higher Learning (IHLs) and incubators and running my own venture capital fund management company since 2013, I have lifted planes into the air, and steadied ships in rough waters.

Navigating the intersection of academic research and commercial reality requires rigorous discipline, realistic market alignment, and an absolute intolerance for structural nonsense.

Yet, a recent recruitment posting caught my eye.

It was launched by a national-level incubator (@SGInnovate) on LinkedIn, hunting for a "Founding CEO" for a pre-revenue, pre-product deep-tech startup spin-off from NTU (Permitir Technologies). To be clear, my beef is with the deal per-se, not SGInnovate nor its policies.

Naturally, I was intrigued + bewildered. Maybe more like intrigued x bewildered such that I decided against what some might call sound judgement and penned this article.

How does this model actually function in the real world? To be clear, I come from a place of care and concern for SG's startup scene. Why doesn't one of the most advanced nations in the SEA region, with the most investments and best infrastructures, produce more and better startups?

The Anatomy of an Upside-Down Deal

As it turns out, a couple of brilliant scientists have invented a terrain-scanning radar technology and want to commercialise it. I have zero issues with their inventions. I think it should be celebrated.

They have everything—except they have nothing (except the tech itself). Most critically, they think they can outsource the CEO function.

To bridge this gap, the national incubator is helping them recruit a competent CEO to handle go-to-market execution, bridge the laboratory and the commercial landscape, manage P&Ls, establish stakeholder management protocols, build out operational roadmaps, and drive fundraising.

From my perspective, the CEO fulfils much more than merely a business role. He or she must lead with determination and back up their words with actions, much like a general in battle. The CEO must inspire others, address the most challenging issues, and be ultimately responsible to the shareholders. In a person, this role would be akin to the heart, the mind, and the limbs.

Most importantly, the individual must possess the ability to gather and convince both clients and investors. Without a doubt, the expectations are extremely high, especially for fundraising in deep-tech startups.

The candidate profile requested is exhaustive: a proven track record of founding or co-founding startups, deep industry connections, the ability to mobilise capital, and a full-time commitment. How many such people are there?

Then comes the kicker: Cash compensation will be limited or even deferred until the CEO finds investors  Read: if you bring in a bucket of water, we may offer you a sip.

The overall package, including equity and salary, remains entirely up in the air, subject to future discussions with the scientific founders.

While not explicitly spelt out, it is blindingly obvious that the scientists will retain the absolute majority stake, doling out a measly slice of employee stock options to the incoming "CEO". If my assumption is wrong, I'll apologise publicly.

Let's call a spade a spade: this role isn't an executive position; it's a glorified volunteer gig dressed up in a fancy "Founding CEO" title.

In short, this hypothetical CEO hero is expected to build the reservoir, bring the rain, and then refine the rainwater hand-in-hand with the scientists—all while burning their own personal financial runway for zero guaranteed pay.

What's interesting is this: as of this morning 15 Sep 26 @ 9am, within 4 days of going live, more than a hundred applicants flooded the post.

But a high volume of desperate applicants does not signal a healthy market; it highlights a systemic flaw in how we architect early-stage deep-tech ventures.

Why This Model is Doomed to Fail

The CEO Factor: 

• The Chief Executive Officer is the single most critical variable determining whether a startup scales or burns.
  

• Give the exact same piece of deep-tech intellectual property or business plan to two different operators, and you will achieve two entirely divergent outcomes.
  

• There is a fundamental economic reason why the CEO is always the highest-paid executive across private startups, multinational corporations, and the public sector (including our Prime Minister).
  

• Diluting that leadership position with zero cash commitment destroys the alignment of incentives from day one.
  

• Mind you, this is a pre-incorporation, pre-revenue startup that can be months or years away from revenue, let alone profitability.

  
  

Asymmetric Risk & the "Zero Downside" Fallacy: 

• This structural setup forces all financial and operational downside entirely onto the incoming CEO, while the institutional backers and academic founders retain pure upside.
  

• The startup secures a fully derisked commercial push without putting a single dollar of skin into the game, leaving the executive to shoulder the heavy lifting with no promise of compensation.
  

The "Hunt for Free" Analogy: 

• Asking a seasoned operator to track, hunt, kill, bring back the meat, and then share it equally while covering their own grocery bills in the meantime defies basic logic.
  

• If a hunter possesses the capability to secure game in the wild, they will not starve in an empty forest waiting for institutional permission to eat.
  

The Investor’s Red Flag: 

• If I were an institutional investor evaluating this startup and discovered that the "CEO" holds little to no equity, I would walk away immediately.
  

• An executive without meaningful ownership cannot drive strategic decisions or command authority.
  

• They call themselves the pilot, but someone else's hands are locked on the steering wheel while they are expected to shovel coal. It’s laughable. This "CEO" is just a stewardess wearing the captain's cap.
  

The Licensing Bypass: 

• If an operator has the elite capability to execute go-to-market strategies, manage P&Ls, and raise capital—everything except invent the core laboratory technology—why would they subject themselves to a convoluted, lopsided equity split with scientists?
  

• Any rational, capable CEO would simply start their own venture, license the IP cleanly from the research institute on market terms, keep the vast majority of the equity, and put the inventors on a fair retainer or advisory share pool.
  

The Nanny Dilemma: 

• National incubators frequently play surrogate parent to help academic researchers commercialise their breakthroughs. This is understandable and even necessary.
  

• But where does the hand-holding stop? If an incubator’s recruitment strategy relies on finding an unpaid miracle worker to fix a broken cap table, it masks a deeper institutional failure in how spin-offs are conceptualised.
  

The Illusion of 100+ Applicants: 

• Seeing a stack of applicants rush toward a flawed listing indicates market desperation rather than genuine demand.
  

• Many applicants are caught in a cycle of applying blindly to titles without parsing the fine print.
  

• Frankly, It is insulting to both sides and guarantees high attrition when reality sets in.
  

The Deeper Issue: A Nanny State or a Crisis of Hunger?

Bringing public awareness to this listing goes far beyond a single flawed job description; it exposes a much deeper cultural and structural rot in our ecosystem.

Are we suffering from the unintended consequences of a nanny state that cushions failure to the point where basic commercial realism is lost?

When institutional frameworks insulate academic inventors from bearing actual financial risk—leaving them protected inside university labs while demanding a desperate, unpaid mercenary handle the business side—we have to ask: Where is the hunger? Where is the real risk-taking?

I genuinely wonder: How much of their own personal capital are these scientists actually putting into their own ventures? 

If the creators of the technology aren't willing to bleed for it financially, why should an incoming CEO burn their own runway to rescue it?

If our startup upbringing relies on artificial scaffolding, incubator hand-holding, and lopsided sweat-equity traps, Can Singapore's entrepreneurial scene realistically survive the next few decades of fierce global competition? 

True enterprise isn't built in a padded incubator; it is forged when skin meets the game on both sides.

What Should Be Done Instead?

Incubating deep-tech talent is an essential national mission, but it requires market-grade mechanics rather than wishful thinking.

If we want these ventures to survive past the slide-deck stage, the architecture requires an immediate overhaul:

1. Pay-to-Play Equity: Require new leadership to invest at a fair, independently assessed valuation that covers operational expenses for a 6 to 12-month period. This approach ensures the CEO gains a significant ownership share (preferably over 30% to 40%) and has a real vested interest. It also naturally weeds out those who are merely interested in the allure of the 'founding CEO' title.

   
   

2. Matching Capital: Institutional backers or the scientific founders must match skin-in-the-game capital on a dollar-for-dollar basis. Equal financial footing removes underlying resentment and morale problems before the company even incorporates.
   

3. Structured ESOP Pools: Carve out a clean 10-20% employee stock option pool to reward key contributors, including the scientists and C-suite, strictly upon hitting verifiable commercial milestones.
   

4. Reciprocal Put-Call Options: Install protective contractual clauses. If the CEO departs early under agreed parameters, they recover their initial opex contribution; if they underperform, the company retains the legal right to buy them out cleanly. Adopt most or all of the above, and both parties win.
   

Putting My Money Where My Mouth Is

However, If national incubators and academic spin-offs truly believe this hiring model works, let’s test it under real market conditions. @SGInnovate, to put my money where my mouth is, I am willing to discuss funding this startup myself based on my above suggestions. At the very least, I will sponsor Permitir Technologies' incorporation and accounting fees where necessary. If it makes sense, I will also build out PT's IT layer and drive its fundraising strategy assuming there isn't any. If you're from PT, feel free to contact me directly.

Taking a broader perspective, it is both concerning and disheartening to observe the normalisation of certain recruitment strategies within our innovation landscape. Until the ecosystem shifts its approach to viewing executive talent as a valuable asset and fosters a culture of accountability among innovators, we may continue to encounter listings that prompt frustration among capable operators. Let us focus on creating sustainable organisations that truly thrive and succeed. For Startups, Schools & Society.

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Disclosure: Ian is founder and CEO of SEED Ventures, a seed-stage VCFM based in SG.

Media contact: ian.gan@smaths.com