Vertical Approach to Venture Investing
Overview
Technology trends like AI, robotics, blockchain, and cybersecurity are poised to seismically change global industry, what is their true potential for investment impact? Constance Freedman talked about assessing general investment strategies against large vertical opportunities, how you should think about true market sizes, which firms are most likely to succeed, and how an investor can add value and get involved. We discussed real-world examples of successful partnerships between family offices, corporations, and industry executives who have found unique investment opportunities and created meaningful value by applying a vertical approach to a general venture strategy.
Insights and Key Takeaways
When you pick a vertical to invest in, you have to be totally dedicated only to that area. So if you’re going to be geographically focused, you can’t then also focus on another industry. Or if you’re going to be industry focused, you can’t also focus geographically.
There are many pros to sector investing. You can really become an expert, and we call that smart money or smart investing. You’re offering real expertise, not just capital, and that gives you the ability to attract proprietary deal flow and offers you recognition, as you bring a specialty. By proving your value, you can often command preferential terms. All of this leads to the ability to achieve outsized returns by affecting the value of the deals.