Is WealthTech the future of advisory?
With the upcoming $68 trillion generational wealth transfer, WealthTech is making wealth management accessible to the masses, with digital solutions catalyzing more personalized adoption and engagement. Creating smart experiences for the net new users is where traditional advisors can add more value.
Can Nurturing the Overlooked Lead to Better Risk-adjusted Returns?
Significant value exists in lower middle-market venture-backed companies that no longer fit the hyper growth model but have viable offerings. It creates a unique opportunity for structured growth equity investors to sustain innovation and generate significant risk-adjusted returns, filling a gap between venture capital and private equity.
When it's not primary, is it secondary?
VCs remain cautious but selectively optimistic amidst a backdrop of economic adjustments. Investors are showing a growing appetite for alternative liquidity options such as secondaries. Structured growth equity strategies could offer diversification into a less volatile asset class while also supporting the startup and VC ecosystem.
Is venture liquidity in stagnant waters?
Structured growth equity strategies could be a solution to the current venture illiquidity overhang by providing founders the capital and operational assistance to continue building, giving investors access to a long-term structural opportunity, and making the startup ecosystem stronger.
When it’s low, how can it bounce back?
Founders and investors should consider alternatives for startups that don't exhibit the potential for IPOs or fund-returning outcomes. Structured growth equity strategies could keep mid-stage startups in business by injecting capital and recalibrating their operations until their economics, not just market, bounces back.
Can founders get a second bite at the apple?
Most startups, in Fintech and beyond, are meant to be steady businesses with product market fit, loyal customers and robust growth. For founders who won't achieve a venture scale outcome, structured growth equity is a viable financing solution that combines capital with operational expertise, and preserves significant upside for founders.
Is AI eating the venture world?
AI success and adoption happen when tied to novel use cases that drive higher efficiency and better user experiences. For Fintech, companies’ transformation requires new structured growth equity investments and the support of experts who can marry capital with operational expertise.
When clouds are low, who keeps flying?
Alongside stronger M&A and buyout exit trends, structured growth equity strategies could offer investors better liquidity options and keep challenged startups flying at revised altitude.
If it’s locked, can you unlock it?
With large amounts of capital locked in traditional investment funds, institutional investors and limited partners (LPs) might start exploring new asset classes and strategies.
Is borrowing capital the same as borrowing time?
Startup founders should carefully consider funding options. Not as a temporary relief but in the long run.
Can we get smarter together?
Experienced operators can discern known patterns emerging when businesses stretch themselves too thin to achieve growth on a set schedule. Collaborative venture buyouts are a viable approach to reignite the business and its original inspiration, with capital injection and operator-led value creation.
You’re not a unicorn, so what?
Venture investors seek out high-growth, high-return investments, driven by the power law. Startups that don't exhibit venture-scale outcomes struggle to attract further investment from VC, as well as from PE. Venture buyouts bridge this gap by combining operational experience and financial acumen to reconfigure the business for success.
Do products create markets?
The innovation in Fintech and its fragmentation have been driven by a wave of venture-backed companies competing heavily to unbundle banking and brokerage operations. Many of these best-in-class point solutions might never graduate into platforms nor grow to Unicorn or IPO stages. To sustain their operations, they need to recalibrate their ambitions and explore alternative exits.
Is normal the new normal?
2024 could mark a new normal, with a rebound in alternative investments, such as venture buyouts, and a shift towards achieving more consistent risk-adjusted returns. For startup founders and investors, it means recalibrating businesses for disciplined growth and focusing on unit economics until they become profitable and acquirable through M&A.
What's a founder’s mindset?
Adaptability has become a key founder trait, and alignment a modus operandi with investors. For Fintech founders, shifting team mindsets and securing support during transitions often requires new investors. Venture buyout funds specialize in overhauling mature SaaS businesses and addressing bottlenecks. It is a different skill-set emerging between VC and PE: recapping and reconfiguring the venture in sync with the founders' motivations.
Is success looking the same for all?
Every investment in startups is more than a financial transaction; it's part of a business's lifecycle. When growing from 0 to 1, founders can find VC funds that are great at capital formation, know their space and can provide network support. In later stages, challenges often arise when growth deviates from original plans. Venture buyouts present a viable solution here, offering continuation capital and an operator-led approach that steers the business towards sustainable, not exponential, growth.
Is the first time the charm?
The sustained outperformance of emerging managers in both VC and PE highlights a compelling investment case for 2024. The drive to prove their thesis translates into more deliberate fund allocation, increasing the chances of outshining established funds and forging successful ventures.
Differentiated strategies (not crowded in terms of investment capacity), such as venture buyouts between VC and PE, can result in higher alpha with lower risk downside.