The Chief Investment Officer – this term did not exist 15 years ago, as the word investment was not as it meant today. Today, people like Adam Neumann, the CEO or the previous CEO of WeWork, would think of a new initiative, raise investments for it instantly, and already have a unicorn startup without even having a product. This is the state of investment we are in right now.
Why Companies Need a Chief Investment Officer
Investment is transforming from a luxury to a necessity in some technological fields, like artificial intelligence, for example. In order to maintain operations of big companies, the burn rate is extremely high that companies need further investment. And who comes in at that moment? That’s the job of the Chief Investment Officer.
In case you are unaware of Albusi, we are an investment prep agency, so we usually deal with Chief Investment Officers all the time. From there, we work with these Chief Investment Officers in order to achieve what they need in terms of investments.
The Role of a Chief Investment Officer
This particular job of Chief Investment Officers lies within the functions of research and communication, because they need to know what numbers to be pitching, they need to have a pitch deck. They need to know how to speak to other VCs and angel investors. That’s why it’s kind of a job that doesn’t exist in a lot of companies. That’s simply because others can do it.
Multiple clients of ours usually hire external Chief Investment Officers because the reality of the situation is most startups or companies around the world don’t need investment all the time. It’s just a phase and they just link the investment part with a CFO’s job – the Chief Financial Officer. You can see how both these jobs or functions interconnect.
The Growing Demand for Chief Investment Officers
Due to the fact that VC investment has been on the rise in the past 30 years – of course, 2024 was not as good compared to the pandemic years – yet nonetheless, given that VC investment is increasing on the long term, the job or the role of Chief Investment Officers are going to increase and is currently increasing every year.
However, you don’t really see these Chief Investment Officers out in the public like a CEO. They’re usually behind the wheel, trying to get the perfect investment deal without getting much attention or recognition in this sense.
When Do Companies Need a CIO?
According to our experience, CIO or Chief Investment Officer is usually very needed when a company is growing because this is when they need the investment the most.
Around seed investments till the series D investment, for example, WeWork, when they were raising multiple rounds, they needed a Chief Investment Officer in order to deal with the investment team, and to get the best possible funding.
The role was mainly done by the founder. In many startup ecosystems, it is expected that the founders go and pitch the product themselves. This shows commitment and establishes some sort of credibility before actually raising an investment.
The Evolving Role
This sort of mentality is kind of changing. It is also expected that founders would focus on execution instead of managing financials or investments.
We expect the role of a Chief Investment Officer to be on the rise in the upcoming 15 years. We constantly deal with this particular role. Startups sometimes merge this role with a CFO. But it is a role that is required in the future, especially with the tech industry burning cash. It’s not easy to sustain the growth that is required from the tech world or tech investments nowadays.