1Mby1M Virtual Accelerator Investor Forum: With Tim Wilson of Artiman Ventures (Part 2)

Sramana Mitra: What are you seeing in your deal flow? We’ll come to what you’ve invested in in a moment. You’ve been in this business for a long time. Let’s look at the 2017 deals that has approached you for investment. What are the trend lines that you see in there? What are you seeing?

Tim Wilson: I see several different trends. One is more money is being invested at higher valuations prior to reducing significant risks. I’ve now done this for over 16 years. I’ve seen the ebbs and flows. Early stage venture capital requires a certain amount of ownership in order to work in the end. I’ve seen valuations creep up and up to the point where we walked away from deals not because they’re not good deals. We don’t think they’re going to make the metrics work for early stage ventures.

The second thing is the rise of specialist funds. That’s been a trend for the last few years. We see a number of small funds that are incubating or specialized that do nothing but a very specific sector. A number of these have been formed. One of the outcomes is that money is available and you end up with companies being funded at the same time to go chase autonomous trends. That is a real trend that we’ve watched and are cautious of because the amount of money chasing very good products puts you up against a number of competitors who pretty much get formed at the same time.

The third trend that we’re seeing is mega funds. If you’re managing a billion-dollar fund, what I see now happening is the large funds will put a million dollar seed together onto the table as a placeholder. If they come into their next round, that’s great. If they don’t, that puts a damper onto your business because they’ve now bought a place at the table but didn’t come to eat. I’ve seen that trend happening more and more where large funds are just buying a peek at your next round.

Sramana Mitra: You talked about investor side trends. Can you talk about entrepreneur side trends? What types of companies are looking interesting? What type of problems are looking interesting?

Tim Wilson: We see a very broad spectrum of entrepreneurs working in different sectors of the economy. I failed to mention one trend which is the cryptocurrency trend. I don’t know how many companies have morphed into Blockchain and token-based sales as a means to raise money. That’s certainly an entrepreneur trend that’s out there today.

Sramana Mitra: It is. What do you think of that?

Tim Wilson: I look at Blockchain as a specific technology capability that can be useful and can be applied but not to all problems. We use Blockchain in one of our marketplaces in India which is working on bringing transparency into the construction material business. It’s called mSupply.

They are bringing builders, suppliers, and financiers together into a marketplace that allows people to move both money and goods through into the construction area, which has been traditionally very difficult and impossibly corrupt. On the currency side, we have stayed away from cryptocurrency not because it doesn’t exist but because we don’t understand it enough to form educated opinions about what will work or not work.

Sramana Mitra: Any other entrepreneur side trends that you would like to highlight?

Tim Wilson: There are big sector trends that are attracting entrepreneurs into those sectors. If I look at the cost of space tech for example, it has dramatically changed allowing entrepreneurs that, 10 years ago, would not have existed. You cannot put up a satellite outside of government funding and make that work. There are robotics trends with the things going on with compute power and sensor technology.

That combination is allowing a lot of people to build new types of robots, drones, and things that are useful to all of us. Those are continuing. They continue to go on and they’re just leveraging the work that’s come before them. The entrepreneurs that are inventing are often at the forefront of either material science or computer science. That also continues because there’s a lot to do in the world. There’re a lot of capabilities now that we we didn’t have even 10 years ago. Entrepreneurs are taking advantage of those as building blocks.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Tim Wilson of Artiman Ventures
1 2 3