How We Invest Vol-IX

Flavio Lobato of Ikove Capital

Advice for Investors in the Tech Space
The biggest differentiator when it comes to investing is to do quite a bit of up front due diligence.
This is what separates having the potential of losing money versus making money. This is an asset class that does require quite a bit of work and understanding. So, the investment you make up front in heavy due diligence is crucial for the success of a positive return profile.

Industry Evolution
About 5 years ago, unicorns represented about 1% of the deal flow in all ventures. If you fast forward to 2018, what you see is that unicorns represent about 2% of all venture deals, but also represent around 30% of all dollars invested in ventures.
What this means is that of the $130 billion that was invested during 2018 in venture, a big chunk of that was invested in very few companies. This is a very significant change that has occurred over the last 10 years and specifically since 2014.
Since 2014, the number of early stage deals has been cut in half. Whilst the far end of the curve is doing quite well, early stages are really suffering.

Investment Thesis
Ikove believes in going directly to the source of innovation. They have a team of 20+ and are based in Columbus, Ohio by design. They identify and vet directly from the universities and research labs. When they find something they think is interesting, they bring it into their proprietary startup nursery.
Ikove also believes in going where very few people are looking. They’re not
really working in places like New York or Boston.

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