The technology sector is home to some of the most successful businesses in the world. Many of these have been examples of the immense success that fast-growing, innovative firms backed by venture capital can achieve. As the tech sector has matured, it’s also become a target for private equity investments.
However, the story of venture capital investments in tech is not always a perfect one, and many new risks, threats and challenges need to be met. Fortunately, with the right IT and consulting solutions, VC firms can reduce risk and plan for the success of their portfolios.
Both venture capital and private equity can benefit substantially from making investments in the technology sector but there are some major obstacles that can challenge technology equity investments including inefficiency and corporate espionage. Without proper solutions, these businesses will fail.
These are some of the main obstacles to success faced by venture capitals:
Private equity firms are also facing a variety of risks in the technology sector. Inadequate cybersecurity at acquired businesses can turn a solid investment into a source of trouble rapidly. Some PE firms considered attacks to be almost inevitable, but this view is short-sighted.
Relying on the wrong private equity IT services and other third-party solutions can lead to unnecessary risk. Choosing an experienced financial IT services provider is essential. This can also empower PE companies to better manage their risks and prepare for the worst.
There are many technological challenges that impact venture capital investments. Any firm that is thinking about making investments in the tech sector should be aware that cybersecurity and data handling need to be top priorities. The following can be the difference between a thriving new venture and a struggling one:
Similarly, companies, especially startups, need to be aware of the technology changes around them. The introduction of artificial intelligence, the blockchain, and various new entrants into the sector can have seismic impacts. If ventures lack technical expertise, they may struggle to adapt.
Of course, it isn’t all bad news in the technology sector. In fact, the significant venture capital opportunities are exactly why so many investors are interested in tech. For example, a cloud investment in financial IT services could pay off in a big way. Surveys indicate that of financial services companies, roughly:
bility and agility they need to thrive. Early experiences with venture capital helped mold iuvo Technologies’ founding. With the right venture capital IT solutions, we have been able to empower businesses in the Greater Boston Area to achieve their full potential.
Numerous technology venture capital firms have identified the benefits of fast-scaling companies in cloud, technology, and other rapidly growing sectors. Some active venture capital firms focused on tech include:
Kleiner Perkins has achieved 240 exits with a total of 1,136 investments (a relatively strong rate for VC), allowing the firm to expand into sectors beyond technology. Similarly, some top technology private equity firms have achieved great success in this area, primarily in more mature tech companies.
The right cloud solutions can help technology private equity and venture capital investments to thrive. Cloud computing provides the cybersecurity, data availability, and computing power that VC and tech PE firms need to ensure the success of their investments. Increasingly, financial firms rely on data and analytics to achieve success. Without the right venture capital and private equity IT-support, those businesses can’t hit their goals. Conversely, developing the right cloud solutions can help increase and accelerate ROI, improve scalability, reduce costs and optimize infrastructure, among other benefits.
The iuvo Technologies team began our story working with VC-backed businesses. We have continued on our track record of success by helping to make IT simple for financial firms. Our team consults with both financial firms and the companies they invest in to provide recommendations that can address IT problems, enhance productivity, and help leaders achieve strategic goals.
Our solutions provide cost-efficiency by eliminating the need for our clients to stay on top of and invest in every new technology. We handle the learning and implementation for you. uvo Technologies has worked with more than two dozen venture-backed businesses.
Of those, 35% had successful exits already (compared to a 10% industry average) and another 35% are still actively growing. Our clients significantly outperform general venture capital and private equity industry statistics thanks to our experience and innovation solutions.
Efficient technology and disruption-proof IT solutions can reduce risk and increase returns. By partnering with an IT consulting company, venture capital and private equity firms can boost the success of the businesses they invest in.
Yes, many popular cloud solutions are designed with industry-leading security practices. However, every business must configure and protect its infrastructure correctly to ensure security. Thus, working with cloud consultants is a smart move for VC firms.
Some examples of private equity investments in technology and cybersecurity include Insight Venture Partners, JMI Equity, Thoma Bravo, Paladin Capital Group, and Summit Partners. However, there are many others interested in this space.
AWS ROI can be measured by the cost optimization it achieves with the just-in-time availability of computing resources. It can also be measured by the reduced risk of downtime. Increased productivity from DevOps best practices is another form of ROI.
Typically, a cloud migration can be measured by duration, direct costs, and disruption of work. After the migration is complete, productivity, cost containment, and technical KPIs can be used to measure the returns.