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:
- 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.
- Technology taps into a massive greenfield consisting of 5/6th of the world population, and is only at the beginning of its exploration.
- The internet provides a zero cost distribution channel that feeds relevant new technology directly and instantly to massive market pull.
- The fluidity of technology implementations allows disruptive technology to quickly respond and become resistant to economic aberrations.
- 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.
(Cross-posted @ Adventures in Capitalism)