Yes is the answer to the question of whether innovation thrives more amidst abundance or scarcity of capital. When money flows, more ideas (and yes, even more bad ideas) reach fruition from the fuel of funding. When the spigot drips dry, it is necessitythat maternity of modernitythat births inventions.
Whatever may come, we are thrilled. Were at once indifferent to uncertainties pervasive in headlines and plaguing so many investors, unsure of what to do as they are pushed out further on the risk curve (if you were a saver you were pushed into Treasuries, where you were nudged into corporate bonds, structured credits, high yield, equities, high risk equities, and on and on).We are thrilled by the progress of our existing portfolio companies and we are thrilled with the new opportunity set before us. Rational optimism (or optimistic caution) has us extra selective as we see growing signs of pockets of excess. We have defensive and offensive strategies to take advantage.
Apt for biological analogies, it is the slime mold where we turn for a clue. When the environment is resource rich, this multicellular superorganism spreads out, spores off, takes risks and searches more widely than it would when food supply is scarce. And when the food supply gets scarce, chemical stress signals sound an alarm telling the individual cells to congeal, return and rejoin into one. The economy follows this undulating pattern of dispersion in good times and consolidation in bad.Today we observe signs, each an individual point of light, each part of a faint constellation growing brighter. In public markets, mergers are called off and spinoffs are called on with increasing frequency. We see individual investors, once part of larger VC fund partnerships, spawning off and raising single GP funds. Many bankers and management consultants are following suit, leaving behind their suits and trying their hand as venture investors. Family offices and LPs, happily allocated to Fund-of-Funds, are going directly to GPs and increasingly directly to companies. Real estate landlords are also benefiting from the current rising demand. Sparse spaces once vacant are revamped as incubator and co-working spaces and, comforted by ascendant valuations, landlords are accepting equity in lieu of cash rent. Until, of course, they begin demanding six months cash up front.
The fittest investment strategy we can deploy against an ever-shifting and ever-evolving landscape of structural shifts and fickle sentiments (themselves as likely to accelerate as to reverse course without warning) is to deploy all the arrows in our investment strategy quiver: thesis-driven contrarian newcos, people-driven audaciously-bold high-growth ventures, and special-situations affording late stage assets at early-stage prices. Perceptions and expectations of others matter (though we can only control our own). The more stable the environment is thought to be, the further out people will look. And the more unstable the environment, the more steeply others will discount the future and have less forward-looking behavior. This seems to be universal, whether across the behavior of bond market participants, populations of differing socioeconomic demographics and animals in ecosystems facing abundance and calm, or scarcity and stress.
In a loose-money rising valuation environment, our best offense is to emphasize starting new companies from scratch, where we control valuations and terms from the very start, immunizing ourselves from excess and positioning ourselves to take advantage of it. We call this ball control, and it historically accounts for one-quarter of our portfolio construction.
In an environment where capital whether generally, in specific sub-sectors or specific companies gets scarce, then we emphasize special-situations where we can own later stage assets at early stage prices, whether through recapitalizations, divestitures or spin-offs. Here we have the chance to earn returns and get paid on the money, time invested and risks borne by others (who stumbled).
This healthy positioning makes us indifferent to whether we may have a rising or ebbing tide. Its an offensive stance making us neither dependent on donning rosy spectacles nor speculating on less-rosy times. Its especially useful (and intellectually honest) because in the overlapping magisteria of what matters and what we can control, the (mis)behavior of markets (and others) serves us.
The Vast Un
While we seek to be agnostic to macro forces, were true believers about one thing: the invariable march of progress driven by the exponentially expanding cornucopia of new technologies, innovations and investable companies commercializing them.
Nobody can predict the future, but there are undeniable directional forces in both biology and technology. We know that whatever just happened is about to be eclipsed by whatever is about to happen. Whether (as in biology) there is a Cambrian explosion or a Permian extinction, technology, like life itself, progresses in a clear direction. To understand where technology is going, it helps to study from where it came. Technology has much in common with biology: it trends from simple to complex; from few species or technologies to many specialized ones; from isolated organisms or ideas or objects to highly networked combinations; from disorder to high-order, information and energy density and energy efficiency. And whilelife and technologyfollow these parallel paths, theyrenow co-evolving and influencing each other.
Read more from the original source:
Investing Themes From Tech & Biology
- Howard H. Seliger, Hopkins biology professor [Last Updated On: January 1st, 2013] [Originally Added On: January 1st, 2013]
- General Biology-Concepts and Investigations - Video [Last Updated On: January 31st, 2013] [Originally Added On: January 31st, 2013]
- Biology Reproduction part 13 (Sexual reproduction: Flower Structure) CBSE class 10 X - Video [Last Updated On: January 9th, 2014] [Originally Added On: January 9th, 2014]
- How far can a Buddhist approach to biology take us? [Last Updated On: January 14th, 2014] [Originally Added On: January 14th, 2014]
- Biology revision song on protein synthesis by Andrew Perkins - Video [Last Updated On: January 30th, 2014] [Originally Added On: January 30th, 2014]
- Scientific Evidence for Creation CSE BIBLE FORUM Origins 1212 Dr Seuss Biology - Video [Last Updated On: February 9th, 2014] [Originally Added On: February 9th, 2014]
- Synthetic biology lab backed by 2 million award [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Vanguard High teacher wins 2014 Shell Science Lab Challenge [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Biohacking and the problem of bioterrorism [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Synthetic genetic clock keeps accurate time across a range of temperatures [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Math modeling integral to synthetic biology research [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Vacancies in biology dept. impact course options [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Dr. Joshua Reece Earns Best Presentation Award At Conference [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Life Science Reference - Biology Online [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- 9th Grade Biology: A Hectic Introduction to Mammals - Video [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Theism vs Evolution, Biology, and History - Video [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- AP Biology Ch.49 Circulatory System Livestream - Video [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- AP Biology Review Cards - Video [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- AP Biology - Chapter 49 Circulatory System Part 1 - Video [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- MSc Biology and PhD Boreal Ecology - Video [Last Updated On: April 9th, 2014] [Originally Added On: April 9th, 2014]
- Whale tales: Students set sail for biology class research [Last Updated On: April 10th, 2014] [Originally Added On: April 10th, 2014]
- Barnard biology professor honored with Emily Gregory award for teaching [Last Updated On: April 10th, 2014] [Originally Added On: April 10th, 2014]
- biology: Definition from Answers.com - Answers - The Most ... [Last Updated On: April 10th, 2014] [Originally Added On: April 10th, 2014]
- Biology - Wikipedia, the free encyclopedia [Last Updated On: April 10th, 2014] [Originally Added On: April 10th, 2014]
- Bridging the Brain Disease Knowledge Gap through Computational Modeling and Systems Biology: An O... - Video [Last Updated On: April 10th, 2014] [Originally Added On: April 10th, 2014]
- Sharpening microscope images: New technique takes cues from astronomy, ophthalmology [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- COLLEGE NEWS: April 13 [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Eureka Once, Eureka Twice [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Biology [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- The Art of Nutrients - Biology Song - 'Counting Stars' Remake - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Biology - The Nervous System - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- OCR AS BIOLOGY: - Cell Structures - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Evolutionary Biology Research / F. Robin O'Keefe and Julie Meachen / Page Museum - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- What Is a Thyroid In Biology? : Let's Get Medical - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Red Ice Radio - Sofia Smallstorm - Hour 1 - Chemtrails to Pseudo-Life & Synthetic Biology - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- STARNES: Did professor advocate censorship of conservative student newspaper? [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- German Research Foundation approves new priority program in the life sciences [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Announcing BioCoder issue 3 [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Poetry by Linda Bierds, Buddhism and biology [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Digestion - Biology Music Video - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- AS Level Biology- Edexcel/SNAB- Unit 1 Revision Notes - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- The Anatomy Of The Heart - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- #OilerNation Biology Program Q & A Hangout - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Northwestern University researchers on synthetic biology - Video [Last Updated On: April 15th, 2014] [Originally Added On: April 15th, 2014]
- Gregor Mendel Institute of Molecular Plant Biology (Vienna) - Video [Last Updated On: April 16th, 2014] [Originally Added On: April 16th, 2014]
- Biology 1B - 2014-04-14 - Video [Last Updated On: April 16th, 2014] [Originally Added On: April 16th, 2014]
- AP Biology Review 3/7: Cell Energy - Video [Last Updated On: April 16th, 2014] [Originally Added On: April 16th, 2014]
- MCB 410: Developmental Biology - Video [Last Updated On: April 16th, 2014] [Originally Added On: April 16th, 2014]
- Dyslexic Advantage - UCSF Symposium - Dr Fumiko Hoeft - Biology of Stealth Dyslexia - Video [Last Updated On: April 16th, 2014] [Originally Added On: April 16th, 2014]
- Life cycle of Silkworm- Insect Molecular Biology Lab, Dr.M.Krishnan, Bharathithasan University. - Video [Last Updated On: April 16th, 2014] [Originally Added On: April 16th, 2014]
- Tracking flu levels with Wikipedia [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- Biology major Katharine Leigh '15 wins Udall scholarship [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- First in the nation: UW-Madison establishes post-doc in feminist biology [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- Biology Project: Predation - Video [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- Report Focussing On Biology Underlining - Video [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- edX | MITx: Quantitative Biology Workshop: 7QBWx About Video - Video [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- Cell Mediated Response (Erdmann's 2B-3 AP Biology) - Video [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- Biology Plantae part 13 (Mosses: structure, life cycle, mosses vs leafy liverwots) CBSE class 11 XI - Video [Last Updated On: April 17th, 2014] [Originally Added On: April 17th, 2014]
- Biology - Photosynthesis - Video [Last Updated On: April 19th, 2014] [Originally Added On: April 19th, 2014]
- The Genie in Your Genes: Epigenetics and Biology of Intention - Video [Last Updated On: April 19th, 2014] [Originally Added On: April 19th, 2014]
- Introduction to Synthetic Biology Andrew Hessel - Video [Last Updated On: April 19th, 2014] [Originally Added On: April 19th, 2014]
- Teacher of Biology [Last Updated On: April 21st, 2014] [Originally Added On: April 21st, 2014]
- Biology - Osmosis - Video [Last Updated On: April 21st, 2014] [Originally Added On: April 21st, 2014]
- UW to host first feminist biology post-doc program in nation [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- The Biology Project: Cell Biology - University of Arizona [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- The Biology Corner [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Rader's BIOLOGY 4 KIDS.COM - Biology basics for everyone! [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Stanford CF Education Day 2014 Understanding the Biology - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- 9th Grade Biology: Hectic Introduction to the Human Organ Systems pt.1 - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Honors Biology and Biology Mrs. Ellis - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Biology professor researches parasites [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- TRANSCRIPTION-Biology - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- 2014 Interdisciplinary Innovation Forum: "Mathematical Biology" - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- This Week in Genome Biology [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Biology - Calvin Cycle - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Systems biology course 2014 Uri Alon - lecture 3: FFL and more - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Systems biology course 2014 Uri Alon - lecture 2: Auto regulation - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Systems biology course 2014 Uri Alon - lecture 1: Basic concepts - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- 9th Grade Biology: Hectic Introduction to the Human Organ Systems pt.2 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Have Atheists Hijacked Biology? - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]