Why would venture capital firms put their money in the construction industry, especially nowadays?
In this week’s episode, I’ve invited David Bloom of Signia Venture Partners to talk about a venture capitalist view of the construction industry as a whole.
Signia is a venture capital firm founded in 2012. David and his partners invest in entrepreneurs applying new technologies to old industries.
Today, he’s here to discuss why venture capital firms invest in the construction industry, their views on the housing shortage and the ripple effects, what type of companies they invest in, guidelines when investing in companies, and more.
In the Eyes of the Venture Capitalists
David has been lucky enough to come from a construction family. He grew up around job sites, which started his traditional perspective on the construction industry.
Now that he’s an investor at a venture capital firm, that traditional perspective has somehow evolved.
When venture capitalists look at construction (at least for David and his partners), they want to see where they can create efficiencies in a construction company using technology.
Moreover, they believe that outsiders like them and people who build solutions to problems have more significant opportunities to change how we live and build these days.
Why Invest in the Construction Industry
According to David, there are many opportunities in everything that touches physical industries and physical problems. Hence, his inclination to invest in the construction industry.
He further stated that he wants to back off remarkable entrepreneurs in giant markets so they can help them create a billion-dollar company.
But far from the number gains, David mainly invests in construction because he wants to invest in companies that positively affect people’s everyday lives.
And no doubt about that – from housing to infrastructure – the construction industry indeed plays a crucial role in everybody’s lives.
It’s no secret that housing is our biggest issue in this country. The skyrocketing housing costs are too much for the average person. And that’s why David wants to spend time on housing construction.
In fact, he and the rest of Signia Venture Partners are currently involved in investing in customizable panelized homes, multifamily homes assembly, and identical 3D-printed homes, among others.
These investments aim to solve the housing problem that has ripple effects on our economy.
Housing Crisis and the Ripple Effects
Housing is fundamental. And our current ability to produce housing and buildings is a constraint on our economic growth.
But how would you know if a housing shortage really does exist?
Here are just some of the symptoms of a housing crisis that we can look into quickly.
– increase in housing costs in coastal cities
– people can’t even afford to buy starter homes
– the cost of living is going through the roof
– the ability to even have the chance to build a home
When you have this housing shortage, it also means there are plenty of downstream effects to it.
First, building generational wealth would be staggering. Then it has these effects on getting loan approvals, and lastly, is building a family.
How many couples have you known today who’d put off building a family due to housing costs? I’ve known a handful of them.
And there’s also this unequal distribution of job opportunities in cities due to the lack of housing. People can’t get good-paying jobs because there are just not enough housing options within their work area. The list goes on and on, and it’s not a problem we can solve overnight.
David and I go in-depth about this topic, so make sure to watch or listen to it HERE.
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Connect with David Bloom:
– Reach out to David by emailing him at David@signiavc.com
– Check out his articles on Substack HERE
– Follow him on LinkedIn HERE
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