Venture Capital Outlook on Disruptive Technologies for 2016
NIN Ventures (or NIN.VC) is a first of its kind crowdfunded technology venture capital fund to be raised, managed, and reported online using the JOBS Act and the General Solicitation Rule. The recent turmoil in the market lead to a change in the way business was done across all industries and many start ups sprung to life. On the other hand venture funds that would invest in these starts up were on a decline. The traditional sources of funding for a venture fund i.e. pension funds, endowments funds, institutions, etc. was drying up and that’s where the JOBS Act or Crowdfunding stepped in. As a fund we have now opened ourselves to other accredited investors who can invest in our fund using multiple investment options like 401k, Defined Benefit Plan, Digital Currencies (E.g. Bitcoin, Litecoin, Dogecoin), or a regular Checking / Saving Account. An accredited investor could be anyone that makes more than $200,000/ per year.
“Every sector at some point is up for disruption, for 2016 our focus is, virtual reality, cloud computing, and the 4th industrial revolution among others.”
Apart from the funding side, another important factor that we bring to the table is transparency. The General Solicitation rule lets us use videos, billboards, social media marketing, and other target based internet advertising. This not only helps with visibility but brings an added level of comfort to our investor base as they are in the know how of what’s happening at the fund on an on going basis versus waiting for an quarterly or annual report. On our end, it gives us immediate feedback on everything we do. E.g. a choice of sector / industry we chose to promote or invest in.
With crowdfunding, NIN.VC managed to disrupt the Venture Capital industry by introducing a new LP base (i.e Accredited Investors) and with the General Solicitation Rule we added a new distribution network (i.e. Next Age Internet Marketing). Just like us, we invest in entrepreneurs (for Series A and B rounds) that are disrupting their industries. A disruptive technology is an innovation that changes an existing industry and also helps create a new market and value network, displacing an earlier technology or a way of doing business. Every sector at some point is up for disruption, for 2016 our focus is, virtual reality, cloud computing, and the 4th industrial revolution among others.
Virtual Reality can be separated into two major categories: augmented reality (AR) and virtual reality (VR). These two technologies are similar in that they alter our realities through the use of equipment such as headsets or gloves. AR is virtual technology that interacts with the “real world.” An example would be walking around a museum and seeing information popping out of the exhibits, but only if you look through an app your phone or glasses. On the other hand, VR immerses them in a unique artificial world. Both VR and AR are in very early stages of development, as market leaders like Facebook’s Oculus and Microsoft’s HoloLens rush to create viable and cost-effective products. This market is predicted to grow $150 billion ($120bn for AR and $30bn for VR) by 2020.
Another sector with heavy recent growth has been cloud computing and services, particularly in media advertising. Often referred to as “AdTech”, cloud advertising takes advantage of user data collected by online content providers to market goods and services to targeted audiences. By using real-time data mining and programmatic algorithms, websites such as digital news providers present personalized advertisements to viewers by compiling user and website specific information in a matter of milliseconds. Social media, mobile, and video advertising are emergent trends in this market. The social media advertising market is at $8.5 billion currently and set to grow to $14 billion by 2018. It is estimated that by 2018, two-thirds of social media ad spend will go towards mobile, creating a $9.1 billion social-mobile market. In addition, social media ad programmatic platforms are also booming, for example, Facebook's FBX is growing 150 percent year-over-year among others. Video advertisement has the highest acceleration across all internet advertising streams, at 19.5 percent. In addition, it is set to benefit from the rising popularity of live / TV streaming services.
Above all, we stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the 3D, 4D, digital, other smart and biological spheres.