I’ve noted that consistent above-market returns are achieved from only a few select venture capitalists who diligently identify and invest in technologies and markets on the leading edge of disruptive innovation. They tend to focus on building companies at the forefront of market forces, creating outstanding growth and exit opportunities. These few venture capitalists are notorious for sourcing and developing fast-growing companies in large market growth sectors. They’ve also built a substantial reputation for value creation and thus are sought after and welcomed into the hot start-ups by seed angel investors as well as the best founding entrepreneurs.
Clearly there are pockets of venture investments globally, however, the epicenter of premier technology innovation continues to emerge from Silicon Valley. This is a unique place with a supportive ecosystem ready to back entrepreneurs’ requirements for launching start-ups successfully. The weather is excellent, the lifestyle is wonderful, and the scenery exquisite. But more importantly, Stanford University, UC Berkeley, USF and University of Santa Clara provide an abundance of research and continually spin off new patents along with a steady flow of budding intellectual, entrepreneurially-driven graduates.
Hence, 80 per cent of venture capital and angel investors operate in Silicon Valley, and, not surprisingly, 90 per cent of the highest venture returns occur here. I believe there is a fundamental reason that venture-backed Apple, Cisco, Facebook, Oracle, HP, Google, Linkedin, eBAY, Salesforce.com, Twitter, Netflix, Zygna, Genentech and so on are all thriving and located within close proximity of these the top performing venture funds.
This is a period of significant transformation that is creating extraordinary venture investment opportunities. A little research and you’ll find some of the very same venture capitalists invested in many of these hot start-ups. It seems that learning from success tends to create more success.
Igor Sill, managing director of Geneva Venture Group, is a Silicon Valley venture capitalist and founder of Geneva Venture Partners. He manages his own angel investment fund at Geneva Venture Management and is also a Limited Partner in Goldman Sachs Investment Partners, Benchmark Capital, Norwest Ventures, Granite Ventures, The Endowment Fund, Fortress Partners and ICO Funds through his family office. Sill lives in Silicon Valley and has 23 years of tech investment experience.
