Why Early Stage Venture Capital?

The Knightsbridge venture program has traditionally been distinguished by its focus on venture partnerships that invest in technology-based companies at the seed and early stages of a private company’s life. Early stage venture capital has historically outperformed other stages of venture and other classes of private equity and produced many of the most successful companies in the public emerging technology markets. Knightsbridge believes that, over the long term, early stage will retain its strategic return advantages and high barriers to entry.

Early stage venture capitalists bring together the power of disruptive technologies with the best entrepreneurial, technical and management talent to exploit the highest growth markets. Information about newly formed private companies is not widely available and when it becomes available, prices cannot readily adjust as they do in public markets. Such inefficient markets reward the skillful and insightful venture capitalists that attract quality deal flow while punishing secondary and tertiary participants.

These inefficiencies explain the wide gap between top quartile early stage performance and all other quartiles and why it is vital to have access to the venture capitalists that add the most value and have locked in the best deal flow. Without that access, the risks of investing in venture capital are simply not worth taking.