Trends for investment - Amish Jani

Date:   Thursday , May 07, 2009

First is the continued growth in the consumption of digital media services, particularly in areas like online video, gaming, and social media. These emerging areas are supported by new modes for monetization, from virtual commerce to next generation targeting to advertising aggregation services such as exchanges.

Second is the rise of on demand and cloud computing based services as technology continues to push down into the small and mid-sized business space, and technology providers leverage the opening up of massive computing infrastructures from the likes of Amazon, Salesforce, Google and others. Third is the vast disruption in various vertical areas, such as financial services, insurance, healthcare and education.Fourth is the huge growth in data, derivative data, and analytic services to make sense of that data.

Advice to entrepreneurs
We believe itís actually never been a better time to be an entrepreneur. You can launch businesses at a fraction of the capital amount one could in the past, and quickly get market/customer feedback. This is at a time when the broader world is going through huge secular shifts. Dislocation always breeds opportunity. My advice to entrepreneurs is to absolutely manage and optimize oneís capital requirements. Think about how much money you need to get to the next value-creating event, and avoid the temptation to vastly over capitalize oneís business early on. Founders and employees have an amazing ability to retain equity ownership in this market - take advantage of it. And beware of the VC that forces you to take more capital than you need because thatís what they need to make their model work!
The author is Managing Director, FirstMark Capital.