Many sub-sectors now have winner-take-all dynamics. The network effects allow companies to grow margins at scale. A handful of public companies in this sector trade at record multiples with 50% EBITDA margins.
New York, NY (PRWEB) January 21, 2015
The Ivy Family Office Network hosted its December 2014 Family Office and Private Investors Outlook Forum in New York, NY on December 9th. Alan Patricof, Founder and Managing Director of Greycroft Partners, led a discussion on “Venture Capital as an Investment Opportunity for Family Offices”
“The Internet sector in particular, and Internet-based venture capital generally, are arguably the two fastest changing segments in the global capital markets,” said Patricof. “Many sub-sectors now have winner-take-all dynamics. This is the result of smart product development that applies network effects to conventional software. The network effects allow companies to grow margins at scale, protect their franchise from competitors, and expand into global markets quickly. A handful of public companies in this sector trade at record multiples with 50% EBITDA margins.”
Patricof also discussed the important ramifications this trend has on the venture capital industry.
“There are larger outcomes and fast rising valuations for early stage venture investors for companies that show a potential for this sort of marketplace dominance. When these companies go public they typically have valuations already in excess of a billion dollars and in many cases public equity investors are moving dollars into late stage private deals to try and capture incremental upside,” said Patricof.
Moreover, “We believe that the greatest opportunity is still in early stage venture, as evidenced by Greycroft's track record of 8+ years with IRRs in excess of 20%. "
Alan Patricof is the founder and managing director of Greycroft Partners. A longtime innovator and advocate for venture capital, Alan entered the industry in its formative days with the creation of Patricof & Co. Ventures Inc., a predecessor to Apax Partners – today, one of the world’s leading private equity firms with $41 billion under management. In 2006, he founded Greycroft Partners, a venture capital firm, to invest in leading early and expansion stage investments in digital media.
Over 40 years in venture capital, Alan has been instrumental in growing the venture capital field from a base of high net-worth individuals to its position today with broad institutional backing. He has helped build and foster the growth of numerous major global companies, including, among others, America Online, Office Depot, Cadence Systems, Cellular Communications, Inc., Apple Computer, FORE Systems, NTL, IntraLinks, and Audible. He was also a founder and chairman of the board of New York magazine, which later acquired the Village Voice and New West magazine.
Alan holds a BS in Finance from Ohio State University and an MBA from Columbia University Graduate School of Business.
Greycroft Partners is a venture capital partnership, formed to invest in the world’s most promising Internet and mobile companies. With offices in New York and Los Angeles, Greycroft is currently investing from its third Fund as well as its Growth Fund, and has $600MM under management.
IvyFON, is a leading peer to peer global family office network. More than 3,000 people attended events globally in 2014.
For more information on Greycroft Partners contact Jessica Vodofsky at PH 212-756-3508. For more information on the Ivy Family Office Network, contact us at 646-290-8114 or at ivyfon.com/contact.html.