VC-Funded Construction Software and Risk with Shadow Ventures

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Here, IRONPROS sits down with Shadow Ventures Founder K.P. Reddy for a frank discussion of perceived risk of purchasing construction technology from venture-backed startups.

These firms are evolving rapidly and since they are publicly-held, assessing how stable or profitable the company is can be a challenge for buyers to do due diligence. In an upcoming episode, we sit down with Raffi Holzer, former CEO of Avvir, a venture-backed startup acquired by Hexagon. Watch for that episode to drop, where Holzer suggests contractors buy into VC-backed technology vendors in order to get more visibility into the company and mitigate risk.

IRONPROS: I was having a talk with a pretty smart guy about this the other day, and he's encouraging contractors who have concerns about the stability or status of some of these VC-owned companies,to make an investment, becoming an investor in that company. And we see some generals who are really taking ownership, sometimes entirely, or sometimes along with, with VC firms, in companies. What's your thought about that approach?

REDDY: So a lot of our investors do the same, they'll invest ... alongside with us. But the motives and risk tolerances are very different. A corporate-owned fund is not a venture fund. They are not really driving high, multiple returns with financial outcomes that are important. They're doing it because it's strategic to the core business, not because it's a financial instrument ...

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