Advantages of Venture Capital
Investing in startups can yield high returns, but is also very risky, as most young companies do not achieve their desired goals.
From the pool of fundable startups, venture capital funds select those with the highest potential for success. Extensive screening and selection processes, deep industry knowledge, and a precise investment strategy help the fund identify new potential market leaders. Funds provide not just financing but also mentorship, expertise, and network to increase the chances of success of their selected companies.
Until now, only institutional investors and wealthy individuals (HNWIs) have benefited from the investment expertise of venture capital funds due to the required high minimum investment exceeding EUR 1 million in some cases.
Pick from a selection of venture capital products and benefit from the advantages of an asset class that historically yielded the highest returns.
Profit from the potential to raise your overall portfolio return.
Invest indirectly in a carefully-curated selection of venture capital funds methodically assessed by our investment team.
Entrust professionals with identifiable, strong know-how and experience to build and manage a high-performing startup portfolio.
Discover an exclusive group of unlisted companies before they go public.
Diversify your portfolio against public market risk and cyclical risk.
Private vs. Public Markets
Over the past decades, experts observed that value creation has shifted from the public to the private market.
Companies are staying private longer and prefer venture capital and private equity funding over going public.
70% of technology companies founded since 2010 are private and not tradable on public exchanges. That leads to more value accruing to private investors like HNWIs rather than those in the public markets.
Without access to venture capital, retail investors will be excluded from such attractive investment opportunities.
Who invests in Venture Capital funds?
Institutional investors leverage private markets to maximise long-term returns as part of a winning portfolio strategy - but private individuals have hardly done so.
For example, private markets make up 50% of institutional investors' or HNWIs' portfolios. 79% want to increase their venture capital and private equity allocation until 2025.
So far, high minimum investments starting at EUR 200k and a lack of transparency regarding trustworthy products have locked out retail investors.
Source: Willow Towers Watson, TIAA Study of Endowments, KKR, CAIA
Venture capital has many advantages, but always consider the following risk factors before an investment:
Risk of loss: Unlike an investment in a mature business with a track record of revenue, the success of a startup often relies on developing a new product or service that may or may not find a market. Thus, venture capital investments can lead to a partial or complete loss of capital.
Illiquidity and delayed cash flows: Investors cannot liquidate their position until the end of a funds term, usually ten years. This makes private market investments far less liquid than public market assets.
In addition, investors cannot expect to receive cash flows, i.e., realized returns, until late in the fund's cycle.
You purchase digital securities with a variable interest rate on the inVenture Capital investment platform. These are issued by a limited liability company, also called a special purpose vehicle (SPV).
The SPV pools the capital of all investors that purchased securities and invests it into the respective target fund. The final returns depend on the dividends of the underlying target fund in which the SPV invests. The target funds call capital from the SPV periodically as investments are made.
Significant returns are not expected until the end of a fund’s term. A funds’ term is usually about ten years. This makes venture capital and our products a long-term asset class.
Risk Disclosure: The acquisition of these securities involves considerable risks and may result in the complete loss of the money invested.