Monday, January 11, 2010

High-Tech VC Should Outpace Any Other Asset Class

With all the fear and loathing in the VC industry, sometimes it's good to get back to basics. Here's a great reminder:

In any economy, Technology Venture should outpace any other sector or asset class for Limited Partners with a ten year horizon, simply because of the following reasons:
  1. Technology is a low cost production business (not a derivative) that capitalizes on the unwavering intellectual brainpower of global entrepreneurs to tap into existing macro-economic needs.
  2. Technology taps into a massive greenfield consisting of 5/6th of the world population, and is only at the beginning of its exploration.
  3. The internet provides a zero cost distribution channel that feeds relevant new technology directly and instantly to massive market pull.
  4. The fluidity of technology implementations allows disruptive technology to quickly respond and become resistant to economic aberrations.
  5. Technology relies on nothing but itself to create and maintain instantaneous value, the only volatility in venture is venture itself.
Who wouldn't want to invest in a sector where there's only 15% global penetration, which has a zero-cost distribution channel, and which caters to disruptive innovation? I know I'm in.

2 comments:

Paul said...

I'm in!

Georges van Hoegaerden said...

Glad you enjoyed it Chris!