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Next generation of Tech companies and mutual funds that invest in them

beebee
edited March 2014 in Fund Discussions
Small Tech startups seems to have very similar business trajectories characteristic as Biotech startup companies. As a individual investor, I like to follow the "ebb and flow" of these companies, as they move from the private venture capitalist arena into the wall street arena.

I'm intersted in identifying fund managers who target these opportunities. I own BUFOX as a way to trying to participate in these types of companies.

businessinsider.com/hottest-pre-ipo-enterprise-startups-2014-2?op=1

Comments

  • scott
    edited March 2014
    GSV Capital (GSVC) is a mostly private equity tech fund that has a lot of the big names (Spotify, Dropbox, etc). Hercules Tech Growth Capital (HTGC) is another option.

    Qualcomm (QCOM) and Google (GOOG) have significant venture capital arms, but they certainly aren't a giant part of either.

    If you want private equity tech, GSVC is really a main option. There have been discussions of its issues (I believe it has a hedge fund-like 2/20 fee) before on here a while back and on seekingalpha, but that's a lot of the big names in one place.

    Personally, I like tech to a reasonable degree (I own a handful of tech-related co's), but I'd devote focus on things like healthcare and be selective (if I have to ask if it's going to be popular in a year or three, I don't want anything to do with it) with tech.
  • cman
    Do you mean a fund like what Jacob Internet fund (JAMFX) used to be during the dot com bubble?:-)

    This fund learnt a lot from that fiasco and has become a much better fund but they won't invest in the kind of companies you likely have in mind after having been burnt once.

    Biotech companies may have barbell characteristics but at least when they succeed in getting a drug approved, they have a guaranteed market that pays huge returns (with a few exceptions that faced FDA recalls).

    Techs don't work that way, especially the ones that come to market with an unproven market and no clear revenue model. This is what happens in bubbles as VCs don't have to wait to take out company's market risks any more before hoisting them on the public. Funds that invest in these can easily get burnt. The ones that come with a proven market aren't priced at IPO to reward early public investors but have to wait for future growth and assume that risk. So the risk reward profile is much worse than biotechs.

    Funds that invest pre-ipo through second market have not done so well either.
  • beebee
    edited March 2014
    Along the lines of JAMFX is an etf, KWEB, which is a collection of chinese-centric web companies with an expense ratio of .68. This etf would be a play on the chinese consumer of e-content and e-services.

    The etf may have an interest in the Alibaba ipo.

    china-internet-etf-could-add-alibaba-11-days-after/

    Also a related Article from Seeking Alpha:

    a-case-for-the-china-internet-etf
  • scott
    I'd play Tencent via Naspers (NSPNY), although I think it's overvalued at this point. Naspers is a fascinating company though - a large emerging market e-commerce/media conglomerate.

    Alibaba I'd play via Softbank if I was looking to do so. I just don't have any interest in highly speculative tech.
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