Welcome to Distilling Venture Capital. I am your host, Bill Griesinger
Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world. My mission is to cut through and go beyond the hype that tends to dominate the tech landscape. And provide you with information you can use.
Welcome back everyone. Today, we have a really fantastic program b/c I have the pleasure of welcoming to the show John Zic who is a Partner and Founding Member of EQUIAM, a San Francisco based firm that provides access to VC investments in a John, thank you for making the time to be with me today on the podcast. I am really excited about today’s conversation about EQUIAM for a couple of reasons: One, because it represents a true, analytics and data-based approach to investing in a basket of VC-backed private tech companies, and we’ll get into that; Also, b/c as a venture lender, the team I worked with spent many hours , days and years developing a risk assessment and risk rating model for the VC-backed companies we were providing debt commitments to. John, to begin the conversation, I thought it would be useful for you to provide us some of your background and then discuss how EQUIAM came to be… Talk about the early stages of creating this company because it’s not a new endeavor or venture, relatively speaking. Talk about the two Funds under management; Recently closed (June 2021) the Private Alpha Fund of $50M – and you have the Private Tech 30 Fund that closed Feb. 2019; Describe these funds and investment thesis behind them Why 30 to 35 companies in a Fund? Talk about the proprietary data-driven approach that EQUIAM has developed; not only for picking the companies in the funds, but also the ongoing evaluation and monitoring processes to make adjustments, including potentially removing an investment from the basket of stocks? Known as the Equiam Systematic Ranking (ESR), which applies a suite of proprietary algorithms to distill approximately 10,000 private companies and 10 million data points into a ranked list of approximately 30 investment targets. You’re CEO, Ziad Makkawi, believes the VC industry “should embrace the kind of AI tools it invests in.” Expand on that… How are you able to get access to preferred shares? What if you want to reduce no. of shares held in a co. in the Fund – how do you sell them? Use of secondary market platforms like Forge, allows EQUIAM to readily participate in private offerings of technology companies; access has not really been a problem overall… Forge used to be Equidate. Forge is actually a minority shareholder-owner of EQUIAM, LLC According Makawi, CEO and Founder of EQUIAM, The business operates on the assumption that there is enough data out there on firms that can be analyzed and used to manage a portfolio of VC investments quantitatively. In the past, most people didn’t have access to the data or hadn’t put in the effort to find it. We have taken a data-driven, risk-based approach to mitigate the froth that we see in the market right now; e.g. Over-valued unicorns… Introduces a more tech-driven way of investing in VC deals. Are you still accepting new investments in the Private Alpha Fund? How does the process work? Accredited investors, minimum investment, etc? Potential to begin offering smaller investment sizes to non-accredited? Closing Remarks
John, what is a good way for those seeking additional information about EQUIAM or perhaps have an interest in making an investment, get in touch? EQUIAM website: www.equiam.com Thank you for joining me for this edition of DVC. I hope you found our discussion today with John Zic and EQUIAM interesting and it gave you things to think about regarding your ability to invest in a fund of private tech companies. I look forward to joining you on my next edition of DVC, Thank