Our equity investing opportunities are open to all accredited investors, as space allows. Not sure if you qualify? Read Who is an Accredited Investor?
In the US, individuals may preliminarily self-certify as accredited investors. Actually investing in a startup, making an investment, however, requires that we receive a letter from a third-party professional (banker, attorney, etc.) confirming your accreditation status. It’s not just us. Every company offering these types of investments must have a third-party verification letter on file for each investor who makes an investment after September 23, 2013 (when the SEC rule went into effect).
When you initially decide to invest in one of our portfolio companies, or in the VCapital pool, we will provide you with a checklist and a letter that you can have signed.
For residents in countries other than the US, your government allows you to self certify and invest when you meet the requirements, which vary by country. We will provide the appropriate information for your country’s accreditation during the accrediting process.
VCapital is structured to appeal to serious, discerning investors, including experienced venture capital investors and established angel investors and angel groups looking at startup investment. The minimum investment requirement is $50k, for either a single company deal or to invest in the firm’s escrowed pool.
VCapital’s pool option offers attractive diversification at the $50k investment level, with a favorable fee structure.
Why is VCapital’s minimum requirement so much higher than other online crowd investing firms?
VCapital is not a crowdfunding site. We are a venture capital firm serving serious, discerning, and often experienced investors and groups.
Some of the crowdfunding sites may do well, but we think most will disappoint their investors and the companies they are attempting to support. Here’s why:
- Minimum investment requirements tend to be so small—usually in the $1,000-$3,000 range—that even early-stage deals may require hundreds or even 1,000+ investors. Startups don’t want the administrative headaches of dealing with these large crowds of investors.
- Many sites offer dozens . . . even hundreds . . . of venture options. Truly disciplined screening and due diligence are impossible. These sites are more like investing lotteries than disciplined, venture capital investment opportunities.
- Their overall results are likely to lag behind venture capital firms that are far more discriminating in their investment decisions.
VCapital is a professional venture capital firm run by proven VC professionals, some with over 25 years of venture capital investing and management experience. The team’s long-term track record with prior firms is an average IRR of 29%!
Can I decide in which companies I want to invest?
Yes. You can do this by allocating your investment to specific companies at the time you invest. You may also earmark some funds for the overall pool, so that you can take advantage of new investment opportunities as they are vetted.
VCapital’s management fees are below industry norms thanks to the operating efficiencies enabled by our web-based operating portal. Fees are 8% of capital invested, paid up-front at initial or follow-on investment, along with a 20% carried interest on investment gains.
The 8% one-time fee compares favorably with typical venture capital management fees of 2% annually for the life of the investment, which is typically over five years and sometimes as long as ten years. The 20% carried interest on investment gains is in line with industry norms.
For investments in the escrowed pool, losses on individual companies will be offset against the gains on the winners. For investments in individual companies, gains would not be offset by losses on other deals.