VC Partner Ari Stiegler Sees Rare Opportunity in Early-Stage Tech Valuations
Now is the ideal time to invest in disruptive technology companies as market valuations have returned to normalized levels after the COVID-era stock bubble, according to Ari Stiegler, managing partner of venture capital fund Flux Capital.
“The recent correction in public and private markets provides a rare opportunity for investors to take advantage of historically attractive valuations in the technology sector,” Stiegler said in an April press release. “Now is the time to deploy capital toward companies that are forging industries of the future. With inflation cooling and interest rates poised to plateau, we see a runway for the disruptors and innovators to regain investors’ favor and lead us into the next bull market.”
Valuations for early-stage, pre-revenue startups – from marijuana businesses to electric vehicle makers – became overinflated during the pandemic and peaked in 2021. The ensuing trainwreck in high-growth, nonprofitable tech stocks has washed out even the most promising companies and set the stage for savvy investors looking to buy the dip.
The market call echoes investing genius Warren Buffett’s famous advice to “be greedy when others are fearful.” Technology stocks have already staged an impressive rally since Stiegler’s market call in mid-April, with the Nasdaq 100 up more than 14 percent in the ensuing two months.
Stiegler has directed more than $200 million in transactions across venture capital, real estate, and direct investments. At Flux Capital, he focuses on identifying leaders in winner-take-all markets, designing a concentrated portfolio of “large companies controlling a majority of market share while maintaining healthy steady state margins,” according to the fund’s website. “Intelligent investments in winner-take-all markets can produce outsized returns as compared to conventional perfect competition markets.”
In addition to leading the L.A.-based VC fund, Stiegler is the founder and CEO of Prism, a lending platform for employees of pre-IPO tech startups with valuations of $1 billion or higher. Prism recently announced a combined Seed and Series A funding raise of $26 million and launched its origination services to help startup employees borrow against the equity they’ve earned in their company, which was previously inaccessible prior to an acquisition or public listing.
The firm has signed multiple agreements to begin originating loans in the coming months and has a pipeline of over $100 million in loan volume, according to the company in a recent press release.
“I’ve always hated how there’s basically no liquidity in the market before an exit event,” Stiegler told Axios in April. “In real estate, you can refinance against underlying assets, so if you can borrow at 70% loan-to-value against a building, why not at 10% against a later-stage startup that’s profitable? Particularly now that average secondary values are down and we’re in a more realistic pricing environment.”
Stiegler’s work with Prism and Flux Capital appears to reflect his long-term dedication to helping tech startups reach their business goals. By investing in early-stage companies, Stiegler not only boosts economic growth and innovation but also provides key resources and insight for startups that often encounter bigger obstacles when seeking funding through traditional channels.
Stiegler’s previous ventures include TutorMe, a leading online tutoring platform with hundreds of thousands of students nationwide, which Stiegler founded and led as CEO. TutorMe was acquired by Zovio in 2019. Stiegler also co-founded LVL, a neo-bank hybrid that provides FDIC-insured bank accounts and a cryptocurrency trading platform.