Posted On: 05/16/2016 8:10:08 AM
Post# of 96892
Investors becoming more selective
This large growth in overall VC investment is expected to continue throughout 2016, with one exception. As the start-up sector begins to enter its second phase of evolution, investors are becoming more selective to where they park their money. Gone are the days of a good pitch attracting investment — today savvy investors want to know how their investment will work for them.
“We’ve completely stopped investing in private tech,” said Jeremy Abelson, a portfolio manager at Irving Investors, a New York-based hedge fund. “I’m done with intangible valuations, unknown exits, unknown liquidity, and I want something that if I put my money into it now… I’m going to get something that’s immediately yielding.”
Abelson is not alone in his sentiment.
This selectiveness investors are now displaying is forcing startups to really think through their business model and their process for success before asking for private money.
Although more scrutiny will result in less tech unicorns, it will help weed out the good from the bad in terms of investment potential.
This large growth in overall VC investment is expected to continue throughout 2016, with one exception. As the start-up sector begins to enter its second phase of evolution, investors are becoming more selective to where they park their money. Gone are the days of a good pitch attracting investment — today savvy investors want to know how their investment will work for them.
“We’ve completely stopped investing in private tech,” said Jeremy Abelson, a portfolio manager at Irving Investors, a New York-based hedge fund. “I’m done with intangible valuations, unknown exits, unknown liquidity, and I want something that if I put my money into it now… I’m going to get something that’s immediately yielding.”
Abelson is not alone in his sentiment.
This selectiveness investors are now displaying is forcing startups to really think through their business model and their process for success before asking for private money.
Although more scrutiny will result in less tech unicorns, it will help weed out the good from the bad in terms of investment potential.
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