AI Investing in Late-Stage Growth: Opportunities and Challenges

In late-stage venture investing, daily market volatility has minimal impact, but long-term AI potential remains a focus for deployment.

### Venture Capital Perspective on AI and IPO Markets
* 📈  Daily public market volatility doesn't significantly impact late-stage private market investments, but could affect **exit opportunities and IPO valuations**.
* 🤖  AI is seen as a transformational technology, but it's still early in its adoption and **potential winners may not be the current leaders**.
* 💼  Despite recent market volatility, **long-term bullishness on AI investment remains strong**.
* 📊  IPO market activity has been **below historical norms** for the past three years, with potential for a **rebound in the next 0-12 months**.
* 🎯 " I think we're, we're very early. And so when we think about **opportunity set**, and we think about A.I., we're long term, **very bullish on the opportunity**.
* 📉  Recent market volatility may cause some companies to delay IPOs, but overall trends suggest a **potential increase in IPO activity** in the near future.
* 🚀 " Last year, we had three tech-led IPOs go public. This year, year-to-date, we've had **five**. So already in an **accelerated pace**.
* 🔮  The venture capital firm overseeing **$7.5 billion in private markets** sees AI as a **key focus area for future investments**, despite short-term market fluctuations.

When you wake up to a day like today, you're largely focused on growth stage venture investments. There are different factors you're tracking, but how do you react? How does it make you approach your day-to-day work? The short answer is that on a day-to-day basis, the fluctuations in volatility in the public market don't really impact the late-stage private market where we focus. There's obviously implications if this persists when it comes to exit opportunity with respect to IPOs and valuation concerns. But the day-to-day volatility doesn't really impact the late-stage private market unless it sustains. And when you look at I you know, some of the a good portion of the pain we're seeing right now is in the stock space. Does that inform how you look at AI investing when it comes to late-stage growth investing in artificial intelligence? Again, I wouldn't characterize the public markets as having a huge

implication in the short term on the
late stage of the market. But I would say, you know, with respect
to A.I., you kind of have to think about and address two questions.
Question number one is, is A.I. a transformational shift in technology
platforms? You kind of have to answer that.
And then the second question I think you have to answer is kind of where are you
with respect to air based transformation or AI-led transformation?
And I think those are the two questions you got to answer as a late stage
private investor to think about where you should be deploying, if at all, and
what the landscape looks like, not over the next month or two or quarter, but
over the next multiple. So as you look to invest the 7.5 billion
that you oversee in private markets, where is the biggest opportunity for you
right now? I mean, I think I couldn't be on this
show and be talking to both of you

without talking about, I mean, I led
disruption. When you think about fundamental
transformational shifts in technology. We believe that A.I.
is a disruptive technology that will be a generational shift in how technology
is ultimately deployed and adopted by enterprises.
But then to the second question around how are we, or how far along are we in
that transformation? I think we're, we're very early.
And so when we think about opportunity set, and we think about A.I., we're long
term, very bullish on the opportunity. You think shorter term and think about
where we are within the, the inning, the game of A.I.
and given how early we are. I think one of the questions that we end
up asking ourselves with respect to A.I. is, will today's winners be the interns
that persist over a long time? And I think when you look historically
at tech led disruption, when it comes to generational shifts like the Internet,
like cloud, like mobile, the early

winners oftentimes are not be long-term
winners who end up creating multibillion-dollar public companies.
Matt, you said that near-term or daily volatility doesn't really impact
thinking in the here and now, but it does impact sentiment towards markets,
and therefore we need to ask about IPO's.
Know, where do you see the remainder of this year with some of the late-stage
companies that are waiting in the wings to go public.
I mean, I think as you've talked about through the show and the landscape
has changed pretty dramatically over the past two days, two trading days.
And absent those two trading days, I would have said that the IPO market is
probably on the rebound, likely to start accelerating through the back half of
this year and early next year. And given the noise, the volatility
we're seeing today, will it cause the company that maybe is on the margin
thinking, should I go public or not to

reassess and maybe delay until early next year? Most likely. That being said, if you go back not over the last five or ten years of IPO data, but if you look back at the last 50 years of IPO activity levels, generally the IPO window, in other words, the amount of IPOs coming out, tends to be dramatically below the norm or the mean for 1 to 3 years. And if you think about where we sit today, we're kind of in the middle of year three, the first quarter of Q3 of IPO activity being meaningfully down compared to historic periods. And so based on that, I would guess that we maybe have anywhere between zero and 12 more months before we do see a rebound in IPO activity. And we're starting to see a little bit of it today. If you look back last year, we had three tech-led IPOs go public. Last year. This year, year-to-date, we've had five.

So already in an accelerated pace.
Will we take a pause, given what's going on today?
And.

Tech IPOs 'On The Rebound' Despite Market Volatility: Witheiler

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The Impact of Public Market Volatility on Late-Stage Venture Investments

Fluctuations in the public market have minimal day-to-day impact on late-stage private market investments.

However, persistent volatility could affect exit opportunities and valuations.

When it comes to investing in artificial intelligence, the key considerations are whether AI is a transformational technology and the position in AI-led transformation.

The focus for late-stage private investors is on the long-term landscape rather than short-term market fluctuations.

is seen as a disruptive technology that will bring a generational shift in its deployment and adoption by businesses.

transformation is still in its early phases, with a long-term bullish outlook on the opportunity it presents.

Historical trends in tech-led disruption suggest that early winners may not necessarily be the long-term successful companies in the A.

The recent market volatility raises questions about the timing of late-stage companies going public, potentially impacting the IPO market's acceleration.

IPO activity levels have been significantly below the norm for the past 3 years, indicating a potential upcoming rebound in the next 12 months.

The first quarter of Q3 has shown a notable decrease in IPO activity compared to historical periods.

Despite the decline, there has been a slight increase in tech-led IPOs going public this year compared to the previous year.

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