Sand Hill's Chief Investment Officer, Brenda Vingiello, CFA, joins Jenny Harrington on “Halftime Report” to go over their most recent portfolio moves. Brenda's commentary begins
The Tortoise and the Hare: A Welcome Combination for Venture Capitalists’ Portfolios
Published Date : April 2, 2014
While attending a healthcare conference in San Francisco several weeks ago, I was struck by the excitement and passion venture capitalists have for their businesses. Many of those VCs will go on to successfully change health care and technology as we know it. With venture-backed companies contributing approximately 11% of the country’s private sector jobs and incremental revenues that account for 21% of US GDP, clearly their passion is having a profound impact on our economic prosperity.
Venture capital is an all-encompassing life. Your passion becomes intensely focused. Your professional life becomes your social life. And your financial life becomes dependent on your fund and its outcomes over time.
When we invest for our venture clients, there are many considerations including the need for liquidity; the high correlation between potential private market exits and current public market valuations; the need to balance the risk and reward characteristics of venture holdings with overall personal risk and reward objectives for your life; the ability to think about concentrated stock positions received in distributions; and the proper compliance procedures around restrictions tied to board and insider rule sets.
Your time horizon and your career stage are also critical. A highly seasoned professional, having seen the best and worst days of the venture cycle, is in a far different economic place than a newly minted partner just stepping up to their capital commitments. Building a portfolio that acts as a “barbell” (pairing your high risk venture holdings with a conservative public market portfolio) is a common approach we use to help protect your wealth and meet your future capital calls. As time passes and distributions outweigh capital calls, your needs are going to change and so should your investment strategy. This dynamic process is one of Sand Hill’s specialties.
In the fast paced world of venture capital, you need to think about the tortoise and the hare, working together in your portfolio to provide the right balanced outcome and, importantly, the right risk adjusted outcomes. The passion and speed of your professional life require the balance of a steady investment approach to meet the goal of crossing the finish line regardless of which part of your overall financial portfolio pays off in the end.
Articles and Commentary
Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.
Video Presentations
All video presentations discuss certain investment products and/or securities and are being provided for informational purposes only, and should not be considered, and is not, investment, financial planning, tax or legal advice; nor is it a recommendation to buy or sell any securities. Investing in securities involves varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular client’s financial situation or risk tolerance. Past performance is not a guarantee of future returns. Individual performance results will vary. The opinions expressed in the video reflect Sand Hill Global Advisor’s (“SHGA”) or Brenda Vingiello’s (as applicable) views as of the date of the video. Such views are subject to change at any point without notice. Any comments, opinions, or recommendations made by any host or other guest not affiliated with SHGA in this video do not necessarily reflect the views of SHGA, and non-SHGA persons appearing in this video do not fall under the supervisory purview of SHGA. You should not treat any opinion expressed by SHGA or Ms. Vingiello as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of general opinion. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based solely on any information provided on this video. There is a risk of loss from an investment in securities, including the risk of loss of principal. Neither SHGA nor Ms. Vingiello guarantees any specific outcome or profit. Any forward-looking statements or forecasts contained in the video are based on assumptions and actual results may vary from any such statements or forecasts. SHGA or one of its employees may have a position in the securities discussed and may purchase or sell such securities from time to time. Some of the information in this video has been obtained from third party sources. While SHGA believes such third-party information is reliable, SHGA does not guarantee its accuracy, timeliness or completeness. SHGA encourages you to consult with a professional financial advisor prior to making any investment decision.
Recent Posts
