2. TRENDS AND STRATEGIES in
Global Venture Capital
Rotman Venture Capital Strategies MBA
Companies are cited for educational purposes as examples of business models and
strategies without any implied endorsement of them as an investment.
3. TRENDS FOR 2012
Globalization of the digital economy will
produce economic growth and the
development of globally-linked venture capital
with business models designed for the era
after the Global Economic Realignment.
Sustainability creates new products and new
markets around the commercialization of
environmental technologies.
DIGITAL ARABIA AND ENVIRONMENTAL
TECHNOLOGIES IN AMSTERDAM
4. Digital Arabia
The digital architecture is familiar
The growth rate of adaptation is potentially
highly significant
Arab Bank signs private placement
memorandum with Oasis500 to Invest in
Oasis Venture 1
8. PRECONDITION FOR
ENTREPRENEUR-LED GROWTH
#1
A talent pool around a university (the mill-
wheel of the ecosystem generating thousands
of new high talent individuals annually). This
is why Stanford, Waterloo, Helsinki University
of Technology, Cambridge has proven to be
such fertile epicenters for entrepreneurial
venture capital. Daniel Isenberg of Babson
writes in the ECONOMIST on the development
of this kind of ecosystem.
9. PRECONDITIONS FOR
ENTREPRENEUR-LED GROWTH
#2
A venture capital community that is linked to
global best practices in the development of new
industries. One can back an entrepreneur to
build a bowling alley without being a “venture
capitalist” in my definition……A venture capital
firm is defined by its global reach, its
professionalism and as such is analogous to a
university engineering department or a symphony
orchestra. One can build a bridge or hum
Brahms but to succeed, one knows who the best
symphony conductors and most creative structural
engineers are. It is amazing how often this
point is omitted from discussions if venture capital.
10. PRECONDITIONS FOR
ENTREPRENEUR-LED GROWTH
#3
There has to be a success mix in the
ecosystem. In Montreal, entrepreneurs can
see how an inventor-entrepreneur with access
to a world-leading engineering school could
create Bombardier out of a company that
started off putting small motors on skis. In
Indianapolis, one can see how agricultural
chemistry can be commercialized into
multibillion products at Eli Lilly. We overuse
the word ecosystem, but it is an accurate
metaphor for the preconditions for success in
modern venture capital.
11. VENTURE CAPITAL TRENDS
FOR 2012 #1
(1) Food production will drive global capital
markets for the next decade in the way energy did
in the 1980s and 1990s. Innovation in all areas
of food (profitable use of arable land, preservative
technologies, packaging innovations, cultivation of
new food sources) will revolutionize capital market
thinking as Chinese, Indian and Arab investors
determine a different set of priorities for their
investment portfolios and G8 investors become
more conscious of the environmental risks of the
current food production model. There are
several new investment models reflecting this new
trend. New Seed Advisors is an excellent and
high profile example of these new trends.
12. VENTURE CAPITAL TRENDS
FOR 2012 #2
Education is redesigned. The Khan Academy is one
example of many, but well known and critically
acclaimed . Some venture funds position themselves
to be poised for this disruption but as content,
education, gaming and entertainment create a
complex new Venn diagram, the likelihood is that this
will be even more disruptive than we have previously
imagined. For the beginning of this see some of the
work being done at MIT’s Media Lab:
http://web.mit.edu/press/2011/mit-launches-new-
center-for-mobile-learning.html and the Center for 21st
Universities at Georgia Tech
http://www.cc.gatech.edu/research/21stcenturyunivers
ities.
13. VENTURE CAPITAL TRENDS
FOR 2012 #3
The commercialization of technologies requires a whole new business model.
For years, a European venture capitalist and I have been advocating a
50TECHNOLOGIES.COM concept for focusing on developing a
commercialization process in areas, which are not as hot as data storage or
industrial biotechnology. For practical purposes, we need to invent new
investment models, specialized venture firms with a capacity to work with
global scientific researchers to bring to market new ideas in everything from
acoustical engineering to marine ecology.
We are creating new technologies with commercial applications and yet the
process of commercializing new technologies remains haphazard. We
either rely on corporations to do this (Bausch becomes the instrument for
commercializing ophthalmology) or we expect venture capita firms that are
concentrating on mobile applications of alternative energy to broaden into
other areas. The MIT Technology review remains the source to be followed
and Boston area VCs have taken the lead in a number of these areas, which
are off the radar, e.g. biofuels where an earlier MIT Technology Review
Innovator of the year became, a venture partner. This year’s TR 10 can be
found at http://www.technologyreview.com/tr10/. Another perspective on new
technologies comes from the Electronic News.
http://www.eetimes.com/electronics-news/4231126/EE-Times--20-hot-
technologies-for-2012 .
14. VENTURE CAPITAL TRENDS
FOR 2012 #4
Social media generated content will change a
number of markets, including how we spend
our entertainment dollars. This trend has
already started to take place but we still aren’t
sure about the business models. See for
example the excellent analysis by Ross
Garland in the Wall Street Journal:
http://blogs.wsj.com/venturecapital/2011/02/18/
social-media-genomics-driving-data-tsunami/.
15. VENTURE CAPITAL TRENDS
FOR 2012 #5
We will need new technologies to sort through and present
the data, which will be collected as crowdsourcing, and
remote sensing makes more data available than we have
ever imagined. The world of data crunching will develop
different business models, transforming healthcare among
other sectors. The aggregation of data will change. I am a
believer that crowdsourcing will be disruptive in many ways:
anti-corruption efforts that aggregate recorded patterns of
corruption, epidemiological data that leads to best practices
health care. Data analytics is going to put unimagined
demands on the existing system leading to information
design companies, which simplify the presentation of large
pools of data and the investment in companies like Kaggle.
For a sense of the scale of the venture capital activities in this
space.
16. “We are all venture capitalists
now…”
The point for venture capitalists is that new areas of
value creation are increasing, not decreasing. The
point is also that sources of capital are increasing, just
coming from new places. The business models of the
past will be replaced by new business model. Social
media will replace some institutional investors and
people will (how radical is this?) be rewarded by what
they build as opposed to how much money they can
raise from existing networks.
When there is this much change, the skills of best
practices venture capitalists become more in demand
than ever, which is why we do what we do,
