Venture Investing is Risky

There is no assurance that a Fund’s investment objective will be achieved or that investors will receive a return on their capital.

No assurance of investment return can be given to investors. The return on investment will depend on the success of the Fund’s investments and there can be no assurance that any or all of the Fund investments will be successful in generating their target returns.

The Fund will invest in early-stage and expanding companies that may not have consistent sales or income. They may also have difficulty attracting management with the right mix of skills and expertise, especially at the various stages in their life cycles when different abilities are required.

General economic conditions may affect the Fund’s financing costs (both in respect of the operation of companies and to potential purchasers of the companies) and the state of the market.

Investments should be considered only by sophisticated or professional investors who understand the nature and extent of the risk.

Early-stage VC investments bear high risk and are usually subject to dilution from future investment rounds. As such, they require a high return on investment.
The most sophisticated early-stage investors make at least 11-20 investments to achieve a return on their investment, counting on one or two to provide nearly all of their return. This structure of portfolio returns is like that experienced by venture capital funds.
Since a large percentage of early-stage VC investments are lost completely when early-stage companies fail, experienced investors seek investments that have the potential to return at least >10x their original investment within five years through a defined exit strategy.

The Fund employs a number of risk mitigation techniques including:

Leveraging the deal screening and processing capabilities and broad industry experience of management.

Standardized Term Sheets.

Board representation on investee companies or observer rights.

Process driven investment regimen, which includes a vetted committee review and potential veto.

Portfolio diversification with 10-20 investee companies ranging across size and sector.

Spreading investment timing of deals over 5-year period.