Quantitative-Based VC Funding
The VC company places a high focus on quantitative analysis to identify its business investment targets. The process of identifying startup companies for funding is based on the EQUIAM Systematic Ranking (ESR).
This method employs a series of proprietary algorithms to distill roughly 10,000 private startup companies and 10 million data points. Ultimately, the management is presented with about 30 ranked business investment targets.
The Private Alpha Fund, which supports late-stage growth startup companies, provides funding faster and offers businesses a shorter path to liquidity compared to some other VC companies.
“EQUIAM’s Private Alpha Fund marks a new era in growth and late-stage venture investing, where data-powered investment signals replace gut feel,” says Ziad Makkawi, founder and chief executive officer of the VC company.
“The interest in our pioneering, quantitative approach from both institutions and individual investors shows that quantitative, risk-managed investing is the future of venture capital, where data availability continues to grow exponentially.”
The VC company has developed a set of sourcing capabilities consisting of private secondary marketplaces, issuers, VCs, and primary business financing rounds to gain access to businesses that are ranked high by the ESR algorithms.
EQUIAM’s funds also have lower minimum business investment requirements compared to other traditional VC companies that offer funding. Moreover, the company also offers exposure to some of the most famous late-stage private companies.
EQUIAM’s ESR collects information by analyzing data of over 10,000 private companies. Based on that data, it generates investment signals to detect companies with strong revenues and a higher chance of outperformance. ESR allows the VC fund to develop larger and more diversified portfolios than its rival VC businesses.
“Our approach has attracted the interest of larger institutions who see the parallels with data-powered investing in the public markets,” explained Makkawi.
He also expects the demand for the second startup funding opportunity to continue growing. To this end, the VC fund continues to develop its capabilities to meet the surge in demand. One of these steps assumes hiring of new staff, and the VC company used the opportunity today to announce three new hirings.
EQUIAM welcomed Laxus Tat, who will be joining the VC business as an “Investment Engineer” to work on automation and help improve portfolio management and investing strategies. Before EQUIAM, Tat worked at AssetMark and Los Angeles Capital Management.
Samantha Crow, who previously worked at Goldman Sachs Asset Management and Northern Trust Hedge Fund Services, will be joining as a Senior Associate at Operations. Finally, Shachi Shah will also be joining the firm as a Director of Strategic Operations.
He previously worked at Plug and Play Tech Center, ICICI Bank, and is a founder of the online resources platform Craftsy. Shah is especially proficient in managing business operations and using data analytics to grow startup companies.
VC company EQUIAM launched its second fund with assets under management of $50 million. A new fund provides startup companies with funding and allows them to access liquidity faster than other traditional VC funds.
About the Author
Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.