December 20, 2021
Pierre Mordacq is the founder and managing partner of The Gate Ventures, a family-backed investment vehicle focusing on technology direct secondaries, having managed their Family Office from 2010 until 2021. Based in NYC since 15 years, Pierre has focused his career on private investments in buyouts and tech. Pierre is a graduate of the French institute of political studies (“Science Po” Paris) and holds an MBA from Columbia University. He chairs the family owned foundation, Fondation de Hautefort and is a founding board member of the Global Family Enterprise Program at Columbia Business School.
Technology as an asset class has profoundly evolved over the past 10 years. With over $100bn invested on average annually in VC in the US only, the pool for secondaries is huge.
One of the key trends is the longer leadtime to exit and IPO, as VCs and growth funds want to capture the full runway of successful companies.
As a result, early stage investors such as seed investors, angels, early employees are increasingly looking for partial liquidity along the way.
What was an ancillary market even 3 years ago has significantly grown into full blown multi billion market that is yet to structure.
We believe tech secondaries look today like buyout secondaries in 2011. Smart and differentiated players will carve successful niches for themselves.
This part of the market is a very natural fit for The Gate, which is the continuation of the investment strategy we built for our own family balance sheet. We have invested in US technology across multiple stages over the past decade, increasingly focusing on mid stage, such as series B and Cs.
Why? We found it to offer the best risk/return matrix: we capture a significant part of the growth runway while avoiding early stage risk.
Investing in direct secondaries (i.e. into single companies) requires both ability to identify the best companies and excellent access. So in this continuity, the objective of the Gate is to built a portfolio of best in class mid stage tech companies, such as we have done for our own balance sheet for the past 10 years. Yes, we are operating in an environment with more liquidity every day, but our current dealflow shows we can still find and access the best companies. Being a family with excellent access in Europe and the US helps, as does our longstanding relationships with west coast and NY sponsors, family offices.
I also believe that a vehicle pooling family capital such as The Gate is ideally placed to play a role in the direct secondary market:
We are in an expensive frothy market, so the flexibility of family capital will be key in the next three years.
We typically avoid overly expensive situations where most rush and we will have capital to take advantage of a potential market correction in the next 2 years.
