Michael Sidgmore, Partner at Broadhaven Ventures: Why Alts Are Going Mainstream!
Listen on Apple | Spotify | Soundcloud
In today’s episode, Ryan Zauk sits down with fintech investor & frequent Wharton Fintech collaborator, Michael Sidgmore.
Michael is a Partner at Broadhaven Ventures, part of Broadhaven Capital Partners, a leading merchant bank focused on financial services. In addition to Broadhaven, Michael runs a media platform called Alt Goes Mainstream, as well as Community x Capital with Reddit Founder Alexis Ohanian. These platforms focus on the emergence of alternative assets, ‘culture assets,’ investing, and the convergence of community & capital.
Looking to get a lay of the land in alternative assets? Michael has guest-written two fantastic pieces for Wharton Fintech laying out the major players of the industry, where it stands, and where it’s going:
Part I: Alt Goes Mainstream — The Era of Alt Assets
Part II: The Indexing of The Alt Assets Universe
Michael is ultra-deep in fintech, with experience as an investor, operator, advisor, angel, and more in this space.
In today’s episode, they discuss:
- The Evolution of Alts & The Major Trends That Will Drive It Forward
Michael is extremely bullish on the alternatives space, and believes a few key trends have aligned to push alts mainstream:
- “You finally have the technological innovation…companies like iCapital, providing the pipes and plumbing for intermediaries…same with a Carta or Forge, doing that with direct deals with late-stage private companies, or Republic doing that with early-stage startups.”
- “You have regulatory change as well. Companies like Republic have benefited from Reg CF…which has enabled non-accredited investors to access private companies at an incredibly low minimum. So Republic enables people to invest $20 and above into these early-stage companies.”
- Low rate environment and a search to yield-generating assets
- Increasing activity in the secondaries markets
- Companies staying private much longer
- Interest-based and passion investing (collectibles, art, wine, etc.)
- Increased VC interest
and much more!
His Investment In + Admiration For Republic & Its CEO Ken Nguyen
“What Republic has done is they’ve built the infrastructure to scale across those assets, And across the wealth spectrum, from retail investor to intuitions. I wouldn’t be surprised to see institutions using their platform over time or using the infrastructure globally….
And then equally, Ken and his background. To build something in this space, it’s helpful to have a legal background to create scalable infrastructure that enables retail, non-accredited investors, and accredited investors to invest in private markets. And also a startup background to balance that out. You need to be able to understand how to move at startup speed, build a great user experience and product and be able to acquire customers at scale, particularly if you’re building a consumer-facing investment platform!”
You can check out Republic here!
- The Huge Opportunity For Wealth Managers and Alternative Assets
“We thought, okay, the independent wealth channel is growing at a faster clip than the wirehouse channels. Wirehouse advisors from UBS and Morgan Stanley are leaving and going independent. I believe there’s over $10 trillion of wealth in the US, and the independent channel is going to capture a lot of that.
That’s going to be a huge driver of assets allocated to private equity funds and hedge funds. I think the average advisor has around 1% to 2% allocated to alts on behalf of their clients, which is incredibly low. When you think about it relative to the Yale or Harvard endowment, you can go look at the Penn endowment and it did a probably 20-30% allocation to alts!
And then I think in the collectibles or card space, companies like Rally or Otis will be able to not just attract individual investors, but the high net worth channel as well.”
- The Rise Of The Passion Economy
“Fractionalization is a massive innovation for this space because it’s unlocked retail participation at scale. And if you think about these platforms [Otis, Rally] as almost like the modern-day investment bank for this space, they’re IPOing these assets. It creates a liquidity mechanism for individuals and funds who have these assets and want to sell them!”
- His Collaboration with Mario Gabriele of The Generalist With Coinbase’s Direct Listing
“Mario has created this really fun way of sharing S-1s. He crowdsources the contributors. So I was one of ~10 contributors, a number of incredibly smart people in crypto and the VC world…And we did an S-1 tear down that Mario released about the Coinbase S-1. And in association with that, he thought it would be cool to create basically an NFT of the artwork representing the work that we did. So he partnered with an artist called Jack Butcher. Jack is a prolific artist and decided to create interesting designs that are now NFTs on the mirror platform!”
Michael and Ryan cover a lot more in today’s episode, including a fun rapid-fire round and if Robinhood, Republic, or Coinbase will have a higher market cap in 2030. Enjoy the show!
Listen on Apple | Spotify | Soundcloud
—
Previous Episodes You May Enjoy:
Former Vanguard CEO & Chairman Bill McNabb: The Future of Finance, Leading in Crisis, & ESG
Y Combinator’s Michael Seibel & Dalton Caldwell — Lessons from 5000 Entrepreneurs
Titan Co-CEO & Co-Founder, Clayton Gardner — ‘Courtside Seats’ to Active Money Management
Rally Co-Founder, Rob Petrozzo — Investing in Collectibles & Building a 21st Century Portfolio
Milind Mehere, YieldStreet Founder/CEO — Transforming Digital Wealth Management
Mayor Francis Suarez — Bringing Silicon Valley to Miami!
Balderton Capital GP & Former GS Partner Rana Yared — Fintech Investing in Europe!
Jon Zanoff, Founder of Empire Startups & Stella Ventures — YOLO Fintech and the Get Sh*t Done KPI
Fractional Trading 101 with Apex Chief Product Officer Dustin Kirkland
ARK Invest’s Fintech Analyst Max Friedrich — His Square Thesis, US SuperApps, and Big Ideas!
Upstart CEO Dave Girouard — Revolutionizing Lending & Taking a Fintech Public!
B2B Venture Investing with Evgenia Plotnikova, Partner at Dawn Capital
11:FS Co-Founder Simon Taylor — NFTs, Clubhouse, & The State of Crypto
Lex Sokolin, ConsenSys CMO & Fintech Futurist — Fintech Trends, Defi, & Digital Collectibles
—
For more Fintech insights, follow us below:
Wharton FinTech
Twitter | Medium | LinkedIn | Facebook | Instagram
Ryan Zauk
—
Ryan Zauk is an MBA Candidate at The Wharton School, where he runs the Wharton FinTech Podcast. He currently works with the US International Development Finance Corp looking at technology impact investments in developing markets. He has a passion for music, media, and all things FinTech.
You can reach him at rzauk@wharton.upenn.edu or on Twitter.
