A few weeks ago, I was pleased to host Joe Lonsdale, Addepar Founder and Chairman, General Partner at 8VC, and Co-Founder of Palantir, OpenGov, Affinity and several other successful companies, for a lively discussion about the current market conditions. We were joined by Alastair Cairns, Head of Insights at Addepar. Joe shared his perspective on the impact of COVID-19 on the venture capital ecosystem and the investment trends that he finds most compelling in today’s landscape.

I’ve summarized some of his key insights, along with his thoughts on Addepar’s new alternatives marketplace* and its potential impact on global finance.

Economic Downturns Present Opportunities for Entrepreneurs to Innovate

Although today’s economic forecast looks cloudy, Joe encourages investors and entrepreneurs to stay optimistic. Some of the best innovations are born out of crises. Joe founded Addepar in the wake of the 2008 financial crisis to help advisors navigate turbulent market conditions. With this in mind, Joe expects to see entrepreneurs rise to the occasion and innovate to create tools and services that will help us all adapt to the new normal. He is optimistic about the potential for these high-impact startups to grow and become key players in the tech landscape.

To Have the Highest Return on Investments in Silicon Valley, Think Out of the Box

According to Joe, a key error in the venture world is rushing to invest in the hottest technological innovation of the moment. Rather than jumping on a bandwagon, focus on companies that are creating products and services that weren’t even possible five or ten years ago.

“Venture investment requires being bold and being able to have an opinion on what is possible. You have to think: “What’s possible now that wasn’t five years ago?”

Joe Lonsdale

Keep an Eye Out for Advancements in Smart Enterprise and Bio-IT

Two key investment themes guide Joe’s own strategy. Firstly, breakthroughs in Bio-IT open the door for very promising investment opportunities. From CRISPR and gene editing to cell therapy, these advancements combine the best of scientific and technological innovation, and makeup roughly a quarter of Joe’s portfolio. 

Secondly, emerging Smart Enterprise platforms represent a significant investment opportunity in the fields of healthcare, finance and government. Companies leverage top technological advancements in order to transform how they tackle critical and increasingly difficult challenges. The financial cost to innovate has decreased over the last few decades and we should expect to see more activity in the Smart Enterprise space in Silicon Valley. Joe advises family offices and investors to keep a pulse on these market-changing innovations, as they have the potential to fundamentally disrupt key sectors of the economy.

Take Advantage of Technology to Find Attractive Alternative Investment Opportunities

Marketplace, offered through Addepar’s subsidiary broker-dealer Acervus Securities, is an application within the Addepar platform that allows you to assess a range of alternative offerings and digitally initiate transactions. Leveraging this tool helps you streamline investment processes for alternative products, in a digital and secure way, and bring unique value to your clients.

Joe shared that he is looking forward to continued innovation within Addepar as we strive towards radical transparency in the financial world. The next step is facilitating a sense of community so that clients can use Addepar to connect and learn from other financial advisors and wealth managers. 

As global markets continue to fluctuate and unemployment climbs to its highest rate in nearly a century, I’m reminded of the importance of our founding vision. At Addepar, we believe that advisors should have insights and opportunities to make more informed and timely investment decisions. Marketplace is our latest step towards actualizing that goal, and we’re excited to share it with you. 

Stay tuned for more investment-themed content from Joe Lonsdale and other thought-leaders from the Addepar community. As always, we’d love to hear from you. Please let us know what you’d like to learn more about. You can get in touch with us at community@addepar.com.

*Brokerage services provided by Acervus Securities, an SEC-registered broker-dealer and member FINRA/SIPC, an Addepar company. Acervus Securities, Inc. is not acting as a municipal advisor and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This article, and any attachments, is not an offer, or solicitation of an offer, to buy or sell any security or other product. The information provided is subject to change without notice.