Tech: Entrepreneurs’ investment sector of choice
Technology companies are transforming society and providing huge gains for shareholders, making the sector the top investment choice for Elite Entrepreneurs, whether through direct investments, mutual funds or ETFs.
Elite Entrepreneurs’ appetite for tech transcends cultures and geography, with innovations such as artificial intelligence and robotics likely to have global reach, according to the 2019 BNP Paribas Entrepreneur Report.
The entrepreneurs’ combined net worth stands at $16 billion and 55% of them have deployed some of their wealth to invest in tech companies. In contrast, 40% of respondents have invested in financial services companies, 32% in consumer goods and 29% in telecoms and media. Other popular sectors include infrastructure (28%), sustainable and responsible investments (26%), pharmaceuticals (24%) and logistics (23%).
Tech is the top investment choice in every region surveyed, with entrepreneurs in Belgium, India and Singapore among the most committed to the sector. So, why does tech top their thinking? In a word: potential.
“The technology we have today—without inventing any new technology—is perfectly capable of revolutionizing the entire world when applied by entrepreneurs to new fields. The fact that technological advances are doubling every 12-18 months means that we're heading into completely uncharted territory. For some people that’s scary, but for people like me it’s wildly exciting, because I like to create, and I like to invest.”
David S. Rose
A New York-based serial entrepreneur and angel investor, who has founded or funded over 100 pioneering companies
The 2019 BNP Paribas Entrepreneur Report, which surveyed 2,763 business owners in 23 countries worldwide and was produced in association with Scorpio Partnership, also found that 64% of entrepreneurs invested directly in tech firms, while 36% used tech-focused ETFs.
“It's about investing in risky asset classes which we feel we understand. Until about 10 years ago, most successful European entrepreneurs were focused on building businesses that could be handed over to their families’ next generation. Now, however, they are more likely to exit their businesses after 7-10 years in order to reinvest in other start-ups, mostly in the tech sector. With the new type of entrepreneur, they more naturally think about how they can give back and also have their money grow."
Founder of a Swiss-based angel investment platform Go Beyond Early Stage Investing.