It’s the right era for Millennials to make it in venture capital.
Private equity firm Halyard Capital’s Bob Nolan sat down with OneWire’s Skiddy von Stade to talk about his investing philosophies and the allure of high risk and high reward world of venture capital.
When von Stade asked Nolan what he thought of young bankers choosing between private equity and venture capital, Nolan said not only are Millenials drawn to the latter – they also have a good idea of what sells.
“For the young person, Venture Capital is the siren song of today’s marketplace,” he said. “It’s particularly attractive because everyone has an idea.”
“We all come to the table with an idea of what we think would succeed… As consumers we believe we know certain sectors – and that’s true particularly of students of a college age or just thereafter'” Nolan said. “And today they’re allowed to live that dream – much more than we were – so kudos to them,” Nolan said.
Venture capital, which generally invests in companies in early stages of development, has historically funded about 1% of U.S. startups, according to the Harvard Business Review – but they’ve also helped create some of the most successful tech and software companies today, including Snapchat, Airbnb, and Facebook.
In 2014, venture capital investments hit $48 billion – $18 billion more than the year prior, according to the National Venture Capital Association.
But the common perception of venture capital, is that finding good companies that will make you and your investors money is like finding a needle in a haystack.
Nolan however, who has worked on both venture capital and private equity, thinks there’s still a way to be successful hunting for those needles.
“I’ve always thought the trick to venture capital was that you needed to understand the distinction between what was a product or a service and what could be made into a company,” he said.
So not just a good idea, a good idea that will make money.
By distinguishing the difference, Nolan said, the investor could create an action plan: in the case of products or services, find out how to sell the product, or if it can be a company, how to build it, he said.
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