Outlook - What We are Thinking?

Where are we now? The US economy seems to be running faster as we enter the New Year. The backdrop is set for a not-too-hot and not-too-cold US economy. From an economic perspective, the world seems to be just right. Geopolitical risks are concerning, but at least they’re well known.

Where are we now? The US economy seems to be running faster as we enter the New Year. The backdrop is set for a not-too-hot and not-too-cold US economy. From an economic perspective, the world seems to be just right on. Geopolitical risks are concerning, but at least they’re well known.

What’s next? If you give US corporations more money via a tax cut, executives will spend it. It could be for expansion, raises or share buybacks. It is unlikely to sit idle for too long.

All of these are good for the stock market and good for private investing. We see this being a very good year to invest in startups.

How will valuations change? Some say startups are expensive. The key from our experience is to be thoughtful about the price you accept to enter a company. Two times in 2017, we walked away from companies we wanted to invest in but were valued 2X to 3X what we felt they were worth.

When deciding what we’ll pay to invest, we try to err on the side of caution. Better to miss a deal or two than overpay.

What areas of technology will gain traction? Blockchain still feels like it’s in the hype cycle. Lots of talk and very little business plan traction. But we see smart ideas in AI now coming to market in a variety of business models. After a long hype cycle, there is real opportunity in machine learning.

Should we worry about data security? All businesses need to increase spending and add tools to protect data. We sit in Boston where the Boston Federal Reserve leads the Federal study of cyber protections in financial services. We don’t see a reason to be scared, but feel it’s better to have a plan for increasing security.

What is the best way to innovate? Trial and error with the willingness to accept failure is the cultural norm and an effective approach. Fail fast, fail small and learn are appropriate watchwords for startups and incumbents to keep top-of-mind.

What are you thinking? Share your views with us by dropping a note to mcasady@vestigoventures.com. We would love to hear what is on your mind for 2018.

Mark, Dave, Ian & Mike