Jonathan Pomeranz on Democratizing Alternative Investments Through Fintech
Published November 28, 2022

Fintechs are opening up access to alternative investments previously reserved for sophisticated investors, but some VCs question if that's a good thing.

  • Jonathan Pomeranz says access to alternative investments is facilitated by fintech

  • New technologies make it easier to invest in these alternative investments

Alternative investing-focused fintechs are making the space more accessible–and VCs are OK with that, Jonathan Pomeranz, head of the Fintech practice and co-lead of Financial Services practice tells Insider.

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Alternative investments are different from traditional investments like stocks, bonds, and cash. They include private-equity funds, venture capital, hedge funds, real estate, art and more.

"Democratizing access to them is bound to happen. I think most venture funds kind of don't care where the capital's coming from," said Pomeranz. "I think most of them are just trying to make sure that they can continue to deploy that capital and raise larger and larger rounds to continue to fund the industry."

However, some VCs are concerned about consumer education when opening up access to alternative investments. Pomeranz told Insider that things like risk reward, at-risk capital, and diversifying a portfolio are now the responsibility of the consumer, who may not understand investing like a financial advisor or seasoned investor would.

"We've built a number of bespoke products, whether that's an option to invest into venture funds, real estate, and even public stocks, but nobody's pulled it all together and helped the consumer understand this crazy world of fintech," said Pomeranz.

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