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10/01/2006

Launching Inductive Capital ... Finally

Well it's October 1st, the beginning of Q4 2006, and I am happy to announce that I have finally launched Inductive Capital, a investment fund targeting public technology companies.  This may seem like a bit of a departure for many who know me primarily from my days as a VC, but those of you who know me from my days as a Wall Street analyst will probably not be all that surprised.

Before I go any further, I should point out that the reason I haven't blogged since mid-April is that as soon as I took the first serious steps to put this fund in place my lawyers advised me that I should stop blogging in order to avoid any chance of running afoul of a number of investment regulations.  (Incidentally, my lawyers are probably the biggest most respected hedge fund lawyers on the West Coast and believe it or not they did not have a single client that had a blog, so needless to say they were a bit hesitant to let me blog with abandon.)  Since Inductive Capital is a hedge fund, and therefore considered to be perpetually in registration, I still face many legal and regulatory restrictions which unfortunately will keep me from writing about the activities of the fund.  I also need to be especially careful to avoid writing anything that could be construed as fund raising for the fund or trying to provide investment advice, so just so we are clear this post is intended as nothing more than update to everyone who reads my blog on what I am doing now.

I want to be equally clear that I intend to continue this blog from now on and pretty much continue to write about what I have been writing about in the past.  I suspect I my have some commentary on the hedge fund industry from time to time, but given that my new fund will continue to be deeply embedded in the high-tech venture capital space I will continue to write about venture capital and interesting new technology trends.  About the only thing I did in the past that I won't be doing now is publishing lists of stock picks, such as my Virtual Stock Portfolio, or offering any kind of investment advice.

What exactly am I doing?  Well I am running a long/short, low net exposure investment fund, otherwise know as a hedge fund.  The investment thesis behind the fund is something I am particularly passionate about and something that is directly based on my experience as both a VC and a Wall Street analyst.  To put it briefly, the fund has been designed to collect information and insights from the private technology market and then try to apply those insights to help make investments in the public market.   Helping me to collect those insights and information is a formal advisory committee composed mostly of VCs and a few other members of the VC-funded ecosystem.  My advisory committee is composed of a great group of folks, all of whom I deeply respect, and I am also lucky to have a great group of investors many of whom have tremendous experience in both the private and public markets.

I named the fund Inductive Capital primarily to reflect the fact that almost all investment decisions are based on inductive logic and this is especially true of a fund that seeks to apply private market insights to the public markets because you must gain multiple data points from a variety of angles and them filter them based on judgement and experience before you can have any confidence that your reasons for making a particular investment are reasonably sound.

Why did I decide to do a public fund instead of staying in venture? Well it honestly was a tough decision, but I think in the short term there are number of very interesting trends that created a real opportunity for a fund such as Inductive and I was compelled to take advantage of that window of opportunity.   Over the long term I am pretty convinced that the VC world and hedge fund world will increasingly overlap so hopefully my absence from the venture capital world will prove only temporary.

Anyway, enough about me and my new firm.  I look forward in the coming weeks to doing some posts on topics I have covered in the past as well as a few new ones and I hope that everyone who has read this blog in the past will continue the dialoge with me as I really enjoy the interactions.

October 1, 2006 in Venture Capital, Wall Street | Permalink

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Legal Disclaimer

The thoughts and opinions on this blog are mine and mine alone and not affiliated in any way with Inductive Capital LP, San Andreas Capital LLC, or any other company I am involved with. Nothing written in this blog should be considered investment, tax, legal,financial or any other kind of advice. These writings, misinformed as they may be, are just my personal opinions.