Shifts in Technology Investing

With Jason Spievak, Co-Founder and CEO, RingRevenue Inc; Gary Rieschel, Founder and Managing Director, Qiming Venture Partners; and Bruce Dines, VP, LGI Ventures, Liberty Global; hosted by John Petote, CEO, CIO Solutions, and Angel Investor, Tech Coast Angels

JP: Jobs act and secondary marketplace?

JS: Makes for great political season eye candy, but the practical reality of crowdfunded early stage opportunities won’t play out. $10,000 cap

Opens up early-stage investing to people that are not savvy, don’t have a lot of money. We don’t want a lot of investors, for which the amount of money they donated is important to them. Kickstarter: Customer funding will work and is much more sustainable.

GR: Invention, innovation and commercialization used to all be neatly contained, within a single geography, but for the first time that’s really starting to separate. US is still now the center of invention and some innovation.

Innovation will start to spread. Commercialization will occur outside the U.S. Particularly in cleantech and healthcare.

BD: Immense amount of innovation is occurring elsewhere. 20% of their portfolio is invested in Israel, which has emerged as the #2 global innovation sector. Much is the result of cultural heritage. (Si Valley: Stanford+Xerox PARC+HP=cultural innovation heritage).

Israelis are only 3 gens away from the folks that invented that country, so they still have innovative spirit.

JP: Sarbanes Oxley Law took away ability to have max exit valuations because of costs. That’s come back with Jobs act.

Room for growth: healthcare, education, agriculture, IT security.

GR: You’re seeing efficiencies for the first time in these fields. Internet has forced inefficient industries like healthcare, education to change. Lost $26 million in two deals trying to improve govt efficiency, but the time is right for that. Consumers are demanding it.

In China, healthcare is the single biggest opportunity. People are getting wealthy, government is right for it, hotbed of disease growth (diabetes, etc).

Lack of financial controls?

Everyone gets greedy. Gov’t policy is in the right direction, but they just haven’t enforced their own rules. We have to do incredible diligence when we invest, but you CAN do it.

IP issue is being used as an excuse and is not really a reason not to go to China. You have to be careful, you have to be smart. Don’t take shortcuts.

JS: ¬†We have a private cloud host in China to create some perception of control. There are concerns about IP, but they’re largely cover for not being able to jump into the market.

GR: Urbanization is a trend that drives everything we’re interested in doing. If they don’t solve their problems with ag efficiency, they’re in a world of hurt. Not enough water. They need to get their people off the land so that they can improve ag efficiency.

BD: One trend important to us: All world’s media is digitized, proliferation of devices, ubiquitous access is changing the face of content consumption.

How that content gets consumed: different video player formats, etc. Changes face of EPG people are used to scrolling through. We’re now focused on content search, scrolling, personalization. Frame-by-frame digital video tagging: audio recognition, facial recognition, etc.

Google is trying to disrupt broadcast advertising model; will only charge advertiser in event that consumer watches the ad all the way through. Huge opportunity in advertising that revolve around contextual advertising, second screen apps, etc.

Cloud, big data support these massive trends. Natural language processing will change the way we interact.

GR: In cleantech, people missed the risk in commercialization. As you try to make more of something, the risks actually go up, not down.