Wealthy people, and even people who have some extra money, are investing in high-risk, young companies. These investments allow them to diversify their portfolios, and perhaps even have an impact on future companies, innovation, and the overall economy. This is a great opportunity for investors from across the spectrum, but as the world is changing, so too the structure of the VC world must keep up as we invest in the technologies of tomorrow.
So, we must ask ourselves, what will venture capital look like in 20 years from now?
I had the pleasure of attending the Silicon Valley meets Paradeplatz Conference in Zurich, organized by the University of St. Gallen. At the conference, we caught up with some industry leaders to discuss venture capital, and hear their insights and predictions as to what the future of VC may look like.
First we met with David J. Blumberg, founder and managing partner of Blumberg Capital in San Francisco. Some of hs best known investments include Any.do, Check Point Software Technologies, and FeeX. Blumberg believes that the future of VC will include AI. Artificial Intelligence, or as Blumberg likes to call it, Augmented Intelligence, will streamline the process of choosing which companies his firm will invest in. He believes that AI will help with sourcing and finding of deals. Blumberg Capital receives 3,000-4,000 business plans per year, but only invest in six to twelve companies. He believes that in the future, AI will be able to help with scoring and filtering of the deal flow, thus creating a faster and easier sorting process. In addition, there will be systems that automatically help make connections, and introduce entrepreneurs to one another.
Thierry Arys Ruiz, founder and managing director of Tarco International in Switzerland believes that blockchain technology will be the next big thing to change the VC space. In terms of ICO, he predicts a more direct relationship between the customer, investor, and the company providing the service. He believes that this change will happen in the immediate future.
Greg Neufeld, partner at Value Stream Ventures in New York hopes that in the future, investors will be able to invest with more liquidity, whether through tokens, or through shares on a trusted, permissionless, decentralized network, where people can freely exchange. Liquidity for both investors and employees will enable them to become more independent and find new opportunities, without feeling tied to the traditional, corporate structure of investing.
These are three very different perspective from top industry leaders about the future of VC. Only time will tell what AI and blockchain have in store for us. As for one of the industry’s biggest issues, liquidity, we agree that if this can change, it would make it easier for people to get into the investment game, enabling VC to grow.