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The global landscape for private capital investment in growth technology is undergoing rapid transformation. In a recent conversation between Alex Konoplyasty, Co-Founder and Managing Partner at Flashpoint, and Haim Zaltzman, Partner and Global Vice Chair of Latham and Watkin’s Emerging Companies & Growth Practice, several themes emerged that are highly relevant for Limited Partners (LPs) seeking to understand the current environment, opportunities, and risks.
Market Environment: From Bull Run to Selectivity
The past half-decade has marked a decisive shift in private capital investing—from the exuberant “growth-at-all-costs” mentality of a long bull market to a more sober, selective approach.
Macroeconomic turbulence, including the war in Ukraine and ongoing instability in Israel, has reshaped investor psychology. Abundant liquidity has given way to scrutiny and discipline. Capital now chases quality—favoring verticals built on proprietary data, strong moats, and sustainable business models.
Regional Dynamics: Europe, Israel, and the US
Flashpoint’s investment focus across emerging Europe and Israel reflects a growing trend among founders: global ambition from smaller markets. European and Israeli entrepreneurs are increasingly turning to the U.S. for capital and scale. America’s deep capital markets, unified regulatory environment, and vast customer base remain unparalleled. Europe, meanwhile, faces a more fragmented regulatory landscape—one that complicates scaling despite world-class talent and innovation. As a result, founders often treat Europe as a launchpad, not a final destination.
Sector Trends: Beyond AI Hype
While AI is a dominant theme, the discussion emphasized that it is not a panacea. Flashpoint is concentrating on B2B software solutions that leverage proprietary data in sectors like banking, healthcare, and insurance—areas where data is sensitive and unlikely to be absorbed by large, open AI models. Other emerging sectors include climate tech and defense tech, especially in Europe.
Investment Strategies: Liquidity, Debt, and Asset-Based Financing
In today’s market, liquidity and flexibility are paramount. Both founders and investors are seeking faster paths to realization and diversified structures beyond traditional equity. Debt, asset-based financing, and innovative mechanisms such as royalty monetization and synthetic royalties are gaining traction, especially in life sciences and tech.
Exiting well remains a critical differentiator. Alignment between founders and investors, careful timing, and innovative exit structures—including evergreen funds, pre-IPO convertibles, and SPAC alternatives—are essential for generating liquidity without compromising long-term value.
The Role of Regulation
Regulation is increasingly shaping capital flows. The U.S. offers a unified, founder- and investor-friendly framework, while Europe presents a more fragmented, cautious environment with heightened privacy and data considerations. For cross-border investments, early attention to governance, tax, and IP structuring is vital.
Meanwhile, AI and technology are transforming the investment process itself—accelerating deal sourcing, due diligence, and market analysis. Yet human judgment remains indispensable for assessing quality, timing, and strategic exit decisions. The convergence of public and private markets will likely continue, with scale and access to capital becoming even more decisive.
Practical Takeaways for LPs
For Limited Partners navigating this environment, five principles stand out:
The private capital environment for growth technology has never been more complex—or more full of opportunity. Success for LPs will hinge on partnering with managers who combine sector expertise, regional insight, and operational discipline. As technology, liquidity, and regulation continue to reshape the landscape, one truth remains constant: quality and foresight win the long game.
