Datasite recently spoke with Joanna Koczuk, Head of Investor Relations and Fundraising at Picus Capital, who shared her thoughts on creating long-term value in the VC space, even in current challenging environment.
Picus Capital is a global venture capital firm and invests in early-stage technology companies. At the heart of its investment philosophy is being an entrepreneurial sparring partner to its portfolio companies and building in resiliency into the disruptive technological infrastructure that their business models support.
After starting your career at Schroders Capital on the private market distribution team, what made you decide to move into venture capital, and why now with Picus?
Joanna Koczuk (JK): I was one of the first people to join the private assets team at Schroders before Schroders Capital became the platform it is today. Over three years our annual gross fundraising grew from £3bn c.£11bn. I likened this unique experience to working for a startup within a large, well-established asset manager. The process of bringing the entire Schroders distribution organization on the journey to becoming a private markets provider ignited a desire to continue these entrepreneurial initiatives. Picus Capital was opening itself up for external capital and raising from a value-add group of investors. This inflection point in their evolution as a firm was well aligned to my experiences of adapting distribution models to the cadence of private assets fundraising.
Out of the different venture capital and private equity firms out there, what drew you to Picus Capital?
JK: What stood out to me what the way Picus engaged with their portfolio companies. They often started working 3-6 months with founders before a company was even incorporated. It was clear operational robustness and commercial viability are at the core of their thinking, and from Day 0, they considered how a business remains resilient and adapts effectively in different environments. Their commitment is evidenced in the longevity of the relationships they enjoy with founding teams and fundraising success they have respectively achieved.
Considering all the downturns in the market right now, which affect tech valuations, why should investors keep putting their money into tech?
JK: Tech headlines are showing significant layoff notices and recruitment consolidation efforts. Many industry conversations are zooming in on the volatility of venture capital and private equity, and whether it should continue to be a part of LPs’ allocation strategy in 2023. At Picus, we are responding by doubling down even more on our core investment hypotheses of building and investing in resilient tech infrastructure. Challenges to public equity performance globally may continue into next year and we are still observing more companies staying private for longer or completely forgoing IPO. What has remained unchanged from the unprecedented valuations and fundraising of 2021 is that sectors, like financial services access, AI infrastructure and renewable energy transition will continue to need financing to truly transform and disrupt at critical mass. It is imperative to ensure portfolio companies have solid business fundamentals, can operate efficiently at smaller scale and sufficiently financed to manage cash flow.
What do you think is the ‘secret sauce’ for effective dealmaking in the current market climate?
JK: Irrespective of where you engage in a company life cycle, VC and PE investors should be looking critically at the type of value they are adding, be it in operations, fundraising or design. A sector or investment hypothesis may be trending but ensuring and financing strong fundamentals is still central for us to effective dealmaking.
By starting to work with our portfolio companies so early and in a hands-on manner, we at Picus have the visibility to see how companies will evolve and the larger potential to shape key developments along the course of that company’s evolution, including double down on those that show potential to be category leaders in their respective fields.
Ultimately Picus is in the business of being a long-term strategic partner-working with companies to be at the forefront of change and stand the test of time.
Joanna Koczuk spoke with Frazer Campbell, Datasite. Datasite is a leading SaaS provider for the M&A industry, empowering M&A professionals around the world with the tools they need to succeed across the entire deal lifecycle. For more information, visit www.datasite.com.