When seeking fundraising for a startup, it is important to understand that venture capitalists and angels have investment philosophies. They’ve identified a thesis, a general set of themes that they invest in, and very rarely deviate from it. In a previous blog post, I summarized a talk from the famous venture capitalist Fred Wilson during the 2013 LeWeb Conference in France. In it, he states the following:

“The technologies are important; but we don’t like to invest in mobile, or big data, or machine learning. We think about those types of things, they matter to us, but we really think about things from a behavioral and a societal point of view.”

This is critically important to understand. You could have the hottest mobile startup around, but Fred will not invest. It’s not because of you, your idea, nor your product. It’s simply because Fred’s modus operandi prohibits him from writing a check.

At Whttl, we’re raising our seed round now. We’re in the thick of things, and are learning ways to optimize the fundraising process, as well as developing an understanding of how the ecosystem operates. We’ve learned via experience that before pursuing an investor, you’ve got to perform your due diligence to conclude the likelihood that they’ll invest in your sector, or at your stage, etc. You can follow us on Twitter for future posts about the subject. (We plan to distill our process to our readers of this blog after the round closes.)

Here’s a bit more in depth look at the trends that Fred has identified are worth investing in, as a representative of Union Square Ventures.

The Future

According to Fred, the three big megatrends of the next decade are (1) networks, not hierarchies (2) everything unbundled, and (3) always being connected. (Read Part One of his LeWeb talk here.) These trends make up Union Square Venture’s framework for looking at the future and for evaluating investments opportunities. Here are four sectors that Fred finds particularly intriguing.

1. Money: Bitcoin as a Protocol

A large change will happen in currency sector because of Bitcoin. Surprisingly, Bitcoin’s value won’t necessarily fully come from it’s use cases as a currency, or as a way to profit from volatile price fluctuations, or for it’s characteristics that make it attractive as a currency. (It’s finite, and has inherent inflation built in). The reason Bitcoin will have a profound affect on the world is because at it’s core, Bitcoin is a protocol. Bitcoin is the financial and transactional protocol for the internet.

“We have not had a layer of internet infrastructure that was global, that was distributed, that was not owned and operated and controlled by anybody.”

What’s most interesting about the Bitcoin protocol is that there exists a ledger (called a block chain) which is global and peer-to-peer. It exists on every single Bitcoin wallet that’s out there, so every Bitcoin transaction clears publicly, in the block chain. This is a technology based architecture that looks like TCP/IP, HTTP, SNTP. Entrepreneurs can and will build a tremendous amount of technology and services over the next five or ten years on top of this layer. We will now see money flow on the internet in a similar fashion that content and images have done for years.

2. Health & Wellness

Healthcare is know for being a complicated industry in every part of the world. Government is nearly always involved, the industry is heavily regulated, it is expensive, and the situation is probably getting worse. Paradoxically, health and wellness is the opposite side of healthcare. It’s what keeps you out of the healthcare system in the first place. It’s also smack dab in the intersection of the 3 megatrends. Devices that are already on the market, such as the RunKeeper and Nike Fuelband, are part of the “always being connected” megatrend. These devices have the ability to report a user’s vital signs to both themselves and to healthcare professionals, like their doctor.

“We’re going to see much more of this coming very quickly. We will see genetics, we will see the biology of our own bodies become available on devices that we will wear, in many cases even on our phone.”

By monitoring our health and wellness with these devices, we’ll be able to live for much longer.

3. Data Leakage

Since the Industrial Revolution, we’ve been polluting the environment. It’s only recently that we’re actively doing something about it.

“In the Information Revolution the pollution is data. It’s the data exhaust, it’s the data that leaks out, it’s the data that’s letting our government spy on us. It’s the data that’s letting Google and Facebook and other services spy on us when we don’t want them to.”

Fred states that he is generally happy to have a government, Google, Facebook, and others spy on him, but there are times when he would prefer that not to happen, although he doesn’t have any control over that. In the coming years, it will be very important to start getting control over our data leakage, both at the individual and societal levels.

4. Trust & Identity

The tech industry has allowed Google, Facebook, Twitter, and Amazon to be our identity service. We login to places all over the web using those services to authenticate ourselves. Although it may be convenient, we are essentially giving those companies access to everything we do.

“There will be, I predict, a Bitcoin-like service, a protocol, that’s distributed and global, not controlled by anybody, that’s architected like the internet, that will emerge and allow us to do the same thing in a manner that we control and it gives us control over our identity, trust, and data.”

For summaries of the rest of the talk, start with part one.

If you found value in this, it would be tremendous if you scrolled down a little further and hit the “Recommend” button.

Greg Muender is the founder of Whttl. Use it to find the sweet startups that have launched in your ZIP code and #winatlife. Drop Greg a line via greg<at>whttl/dot/com or check him out on Twitter.