1/ We will see more and more use of data in private markets. Over next 24 months it will become table stakes in most private markets.
wsj.com/articles/priva…
wsj.com/articles/priva…
2/ The transition will happen much faster than it did in the public markets because publics have paved way, easier to process massive amounts of data, more of a demand now to differentiate yourself.
3/ In early stage tech investing in Silicon Valley, I’m very skeptical that there is a problem to be solved (too much capital- not much inefficiency) or that data is the solution….at least in the short-term.
4/ But there will be an explosion in the use of data in private markets. It will start outside of early stage tech investing in Silicon Valley.
Think:
-other geos that aren’t flooded with capital
-later stage PE – much more data
-other industries (i.e. cpg where lots of data)
Think:
-other geos that aren’t flooded with capital
-later stage PE – much more data
-other industries (i.e. cpg where lots of data)
5/ I heard once there is a lot of data in CPG.
6/ This feels like baseball pre-moneyball, or basketball pre-@dmorey and @samhinkie. Or public investing before Renaissance Technologies and Two Sigma. Or politics before microtargeting.
Or every industry before 2018. Kind of feels like a pattern right?
Or every industry before 2018. Kind of feels like a pattern right?
7/ Private investing is one of the last large industries that has giant profit pools, little innovation, and a bunch of people that think they are smarter and better connected than everyone else.
8/ That worked around the time when KKR was buying RJR Nabisco.
In 2018 there are too many intermediaries, too many sources of capital, the attractive assets have too much attention for humans to maintain an advantage.
In 2018 there are too many intermediaries, too many sources of capital, the attractive assets have too much attention for humans to maintain an advantage.
9/ The PE/VC firms that don't invest into data are going to be left behind, still believing that their industry should operate like it did in the early 2000s.
You don't want to be the Knicks of private investing do you?
You don't want to be the Knicks of private investing do you?
