The Big Value Creation Trend of 2015: Q&A with Jonathan Medved

When OurCrowd founder and CEO Jonathan Medved gives a talk about crowdfunding, as he did at the recent Stocktoberfest conference in San Diego, there is one particular slide in his deck that is something of a show stopper.

Medved says it is the one slide that tells the whole story—explaining in one bar chart why high net worth individuals should use OurCrowd’s online platform to invest in private tech startups. Founded in 2013, OurCrowd operates a hybrid online platform that combines crowdfunding with VC investments in tech startups in Israel and other countries. OurCrowd manages the deals and selects investment opportunities for about 10,000 registered investors around the world.

OurCrowd chart on pre- and post-IPO value creationationsBeyond the OurCrowd pitch, the slide (displayed above) also offers some insight into one of the biggest trends of 2015—the explosion in private equity financings of tech companies that has led to a proliferation of “unicorns,” those once-rare private companies with valuations of at least $1 billion. As the year draws to a close, the online list of private tech unicorns maintained by CB Insights is now hovering at 144, including San Francisco-based Uber (valued at $51 billion), Beijing’s Xiaomi ($46 billion), and San Francisco’s Airbnb ($25.5 billion).

Medved likes to present the slide because it shows that much of the value creation for tech companies like Microsoft, Apple, and Oracle during the 1990s occurred after their respective IPOs. But in the current tech boom, virtually all of the rise in valuation for companies like Twitter, Facebook, and Yelp occurred pre-IPO. As Medved puts it, investors who now wait to invest until companies go public are missing out on the biggest appreciation in corporate value creation.

To Medved, it’s a compelling reason for accredited investors (individuals with a high net-worth) to … Next Page »

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Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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