Investors continue to show interest in additive manufacturing, but no longer accept incremental 3D printer improvements as a reason to invest. They now demand clear evidence of how a technology solves a genuine customer problem.Capturing more value than the price of a single 3D printer is crucial. Instead of just selling equipment, companies must provide end-to-end solutions that deliver measurable benefits to end-users, often in highly specific application areas. Venture investors naturally remain open to the possibility of high returns, but only if companies can justify them with strong market logic and proven potential, rather than relying on hype.Our series on the state of 3D printing investment continues with strategic insights from Tali Rosman. Rosmans professional roles span M&A, strategy, product and sales development, and a stint as CEO at Elem Additive, priming and leading the venture to acquisition.Read more in this series:2024 Investment in 3D printing totals US$650mReindustrialization: the AM opportunity with SIP CapitalThe State of Investment in the 3D Printing IndustryNATO Innovation Fund and defense tech investingAM Ventures: how to get your 3D printing start-up fundedEarly Stage Investing with InnoSource VenturesNinepointfive founding partner on the new investment realityIndustrial RenaissanceConvince me youre solving a problem. That alone sets you apart, says Tali Rosman, an industry advisor at RHH Advisory. Investment in general manufacturing assets in the United States appears to be booming, bolstered by bipartisan political interest in rebuilding Americas industrial base. With everything going on, geopolitical pressures, the need for supply chain security, and [the recent U.S.] election, there is a lot of investment in manufacturing, from CNC shops to technology companies, says the AM insider.Rosman cautions that a reinvigorated U.S. hunger for manufacturing does not equally extend to industrial 3D printing. While there are signs that investors are reevaluating opportunities, the focus has shifted away from a hardware-centric model. Theres less appetite to invest in companies selling another 3D printer thats just 10% cheaper or 20% faster, says the dealmaker, highlighting a preference for application-specific solutions. Potential investors now appear to favor those who can directly deliver higher-value parts, often tailored to specific industries, such as heat exchangers or data-center components.The pattern of pure-play printer vendors struggling is clear. Recent performance from several publicly listed additive manufacturing companies, ranging from Stratasys and 3D Systems to more recent entrants, has not produced the scale of returns that early investors anticipated. Instead, the business proposition that holds greater promise is end-to-end production of specialized parts. By owning both intellectual property and manufacturing capability, a company can capture not just the price of a printer but also the significantly larger cost savings it might deliver to an industrial client.Capturing 3D printing valueVenture investors still appear willing to pursue significant returns in additive manufacturing, but their focus has shifted decisively toward business models capturing more value than a simple printer sale. If you look at Stratasys, the number one printer company in the world, it has around $600m in revenue, hardly enough to support 100x returns for a VC, says Rosman. Investors are asking why they should settle for $200,000 from selling a printer when the end-user of that printer may generate millions in cost reductions.Instead of chasing mega-valuations on the back of unfinished stories, additive companies now face an environment in which investors demand tangible proof of their potential. While a few years ago firms might have raised capital by promising growth alone, today they must demonstrate how their technology can deliver genuine bottom-line benefits to customers.The market for general manufacturing assets, by contrast, has rarely been stronger. Multiple private equity groups, CORE Industrial Partners and American Industrial Partners among them, are actively buying up machine shops and related service providers. The aim is to harness growing demand for domestic production, supply chain resilience, and shorter lead times. In that context, additive manufacturing benefits from the same shifting geopolitical and economic conditions as conventional manufacturing, even if it no longer commands instant investor interest. As a16z General Partner Marc Andreessen says, The only prospect for rebuilding US manufacturing is advanced manufacturing.For those additive ventures seeking investment, a strategic approach is vital. As Rosman points out, A few years ago you just needed a strong pitch to get a cheque; now you must prove your thesis. Recent funding rounds for firms such as 6K and Mosaic suggest that sizeable injections of capital are still possible if a company demonstrates how its technology can tap into the profit pools currently flowing to end-users, rather than leaving so much of the value on the table.Market fragmentation, with hundreds of similar ventures chasing a still-limited addressable market, has prompted calls for consolidation. According to Rosman, some degree of consolidation is essential. Yet the industrys track record of acquisitions suggests that not all buyers have the skills to integrate their targets effectively. Look at almost any acquisition by the leading players in the last five years, and see what ended up being accretive to shareholders, she says. Unless consolidation is guided by a coherent strategy, robust management oversight, and serious attention to corporate culture, it risks becoming an expensive distraction rather than a stepping stone to sustainable growth.Dont miss the upcoming articles in our State of Investing in 3D Printing series; subscribe to the 3D Printing Industry newsletter.To stay up to date with the latest 3D printing news, follow 3D Printing Industry on LinkedIn.You can also find us on Twitter, and Facebook.Michael PetchMichael Petch is the editor-in-chief at 3DPI and the author of several books on 3D printing. He is a regular keynote speaker at technology conferences where he has delivered presentations such as 3D printing with graphene and ceramics and the use of technology to enhance food security. Michael is most interested in the science behind emerging technology and the accompanying economic and social implications.