(Based on a discussion recorded live at our Nov 2023 conference)
Our panel of investors, technology entrepreneurs, and board advisors discusses examples and the driving forces behind the latest trends in technology investing. What does the future hold for this sector? How can investors efficiently manage their pipeline, best source and evaluate the most compelling opportunities? What are red flags to look for?
Panelist backgrounds
David Teten has a long history of building investment management firms and deep expertise as both an investor and a user of investment tech to enhance the growth of firms he's been involved with. Through his various roles as a VC, partner at a VC accelerator and his PE/VC network, David’s focus is on helping investors in the private markets generate alpha.
Hugh Nguyen’s background includes founding a software company for RIAs and family offices, later sold to an asset manager. He now runs a venture-focused investment firm with a hybrid single family office model, primarily investing in financial technology, AI, digital media, ESG, and climate tech. Check sizes range from $100k to $2 million, syndicating larger investments through their co-investment Network.
Michael Sikorsky is a tech entrepreneur with his own family office set up following successful exits. Michael invests mainly in technology, but he also diversifies across sectors, with check sizes ranging from ranging from $50k to $5 million. He’s also the creator of Copia, which is on a mission to be the omni platform for the ultra high net worth.
Ray DiNunzio’s TOS Advisors works with several emerging family office technologies, helping them “stand up” and integrating them into their digital family office platform as well as offering broader support and network access.
The discussion was moderated by Christine Chang, whose experience serving family offices spans generations, geographies and industries, with roles including introducing co-investment partners and leading operating companies as Board Chairman, CEO, COO and CCO. She leads senior management teams to build operational and regulatory infrastructure & technology, and navigate special situations.
What is the current macro view of investing in technology?
Capital raising for operators and portfolio companies has been challenging in the past 18 to 24 months. Many investors are just sitting on capital. VCs that traditionally had not led deals have had to step up and co-lead rounds for their portfolio firms. But, as the saying goes, when there is blood in the street, it’s time to buy... FinTech valuations have been slashed by 50 to 70% creating a buying opportunity on the investment side to come in at an earlier stage. Traditionally late-stage investors, including growth equity or later-stage private equity funds, are jumping into early-stage. There are also firms raising money for distressed venture, buying up valuable assets that can be retooled.
What about Artificial Intelligence?
It is definitely THE hot button issue of the moment. Everybody likes talking about it, but the investment arena is more nuanced. A considerable portion of capital is being absorbed by a few major players that are essentially underwritten by large tech giants, leaving other emerging tech companies in a more competitive space. Many investors are trying to figure out where the investment opportunities are, for example which apps might be acquisitive targets for some of the larger players. There is a lack of understanding of what’s really going on in generative AI, largely because of the mind-blowing pace and volume of advancements in recent months. As a result, many take a ‘wait and see’ attitude.
However, the potential for small teams to achieve significant outcomes and speed up the innovation cycle leveraging AI, even with minimal headcount, is certainly being recognised. Many family office tech firms are incorporating AI into their systems, such as for helping draft legal docs or deal sourcing for private equity funds through highly personalized emails.