Two days ago, we launched something new.
USVC Select is a way for qualifying investors to participate in private companies with zero carried interest.
The response was incredible and a handful of you wrote back with questions. I read every one of them.
A lot of the questions circled the same handful of points, which tells me that if one person is writing in, fifty more are probably asking it quietly to themselves.
So I want to answer the most common ones here:
How do I actually qualify for Select?
To join USVC Select, at least two things have to be true:
You're an accredited investor.
To qualify as an accredited investor, you generally must meet at least one of the following criteria:
Individual income over $200,000 (or $300,000 with a spouse) in each of the last 2 years, with the same expectation this year.
Net worth exceeding $1,000,000, excluding the value of your primary residence.
Hold certain active financial licenses (such as Series 7, 65, or 82) or serve as an executive officer/director for the issuer.
If this sounds like you, read on. If not, Select is not the right fit.
That said, you are welcome to invest as much as you’d like in USVC itself (which does not require accreditation).
You hold at least $100,000 in USVC or another fund managed by AngelList Asset Management.
If you already hold $100,000 in USVC, you may meet the minimum expectations for participation. Apply to the syndicate so we can review your profile, and if it's a fit, you're in.
If you do not yet hold $100,000 in USVC but wish to participate in Select, you can consider increasing your allocation before June 30th.
Select is a co-invest program alongside USVC. There is no guarantee USVC will invest in any specific opportunity in the Select program.
There is no guarantee you will get access to any specific deal if admitted to the program and you may have your allocation reduced due to regulatory or other reasons.
If I qualify, does my existing USVC investment get moved into these deals?
No. Qualifying for Select does not mean your USVC position gets reallocated.
Your USVC investment remains allocation in a broad access fund aiming to index the best of venture.
Select sits alongside USVC for investors who want to back individual leading companies without carry.
When a deal comes up, you choose whether to put additional capital to work in that specific company.
I've backed plenty of syndicate deals on AngelList. Does that count?
I understand why some people were confused here.
AngelList Asset Management is not AngelList.com.
They share part of a name (a nod to where this all started) but they're separate things.
The Select threshold is a $100,000 position in a fund managed or advised by AngelList Asset Management.
That includes USVC, Systematic Fund of Funds, and the Early-Stage Quant Fund.
To be clear, qualification for USVC Select is not the sum of syndicate deals you've done on AngelList.com over the years.
So two paths qualify you:
If you already hold $100,000 across those AngelList Asset Management funds, you may qualify for Select without adding to your USVC position.
If you're not at $100,000 yet and want in, that's the gap to close before June 30 and you're welcome to increase your USVC allocation anytime.
Once I'm in, what's the minimum to participate in any single deal?
The $100,000 minimum is one criteria to support your approval into Select.
It doesn't commit you to participating in any deal we offer (although we aim to offer opportunities that encourage you to do so!).
When we share an allocation with our Select members, each deal carries its own minimum check size and it can vary. That said, we intend to set minimums of $10k for participation.
You decide, deal by deal, whether to participate and for how much.
What am I actually paying?
In Select investment vehicles, zero carried interest and a 5% total management fee across the lifecycle of your investment:
2% a year for the first two years
0.5% a year for years three and four
0% a year beyond year four
For context, most ways into companies at this stage charge meaningful carry (often 20% of your profits or more) before you see a dollar upon exit.
Select charges 0% profit share, and that's the whole point of building it. We intend to make this a more favorable way for you to invest in individual companies.
What will the deal terms look like?
A few of you, reasonably, pushed on this. There has been a lot in the news about SPVs and unusual terms.
We aim to offer deals at the same price as the company's most recent funding round.
Price is what we anchor to. Other terms like liquidation preferences, anti-dilution, and information rights depend on the specific allocation and how we're accessing it.
We intend to lay out the full terms with every deal before you commit a dollar, so you're not guessing what you're buying.
How does tax reporting work?
It’s worth separating two things here:
USVC itself issues a 1099, not a K-1.
Select is different. The investments run through SPVs, so expect K-1 reporting at the deal level.
We'll make the structure clear with each allocation so there are no surprises at tax time.
Do I need to be a Qualified Purchaser?
Accreditation status is one criteria to participate in Select (but it certainly doesn’t hurt to be a Qualified Purchaser!).
Certain opportunities may carry additional eligibility requirements (such as qualified purchaser status) depending on the structure and regulatory requirements of the underlying investment.
If you saw the words "qualified investor" anywhere and read it as Qualified Purchaser, that's a much higher threshold, and it's not what we mean.
Select is open to accredited investors who hold $100,000+ in USVC before June 30th.
What happens after June 30?
The $100,000 minimum to access USVC Select is only valid through June 30.
After that, the entry point moves to $250,000.
Our first Select deal launches the first week of July.
If you want in at this lower threshold, please get your USVC position to $100,000 or more before the month closes.
I hope this helped you better understand what Select is and who it’s for.
Then, apply for Select here.
We intend to launch our first deal soon!
Talk soon,
— Ankur
P.S. Next Tuesday, I'm hosting a live session walking through exactly how Select works and where we're finding these companies. Live questions will be answered!
It's free to attend, and I’ll be sending out the recording for those who can’t make it live but are registered for the event.
Save your spot → https://luma.com/select
P.P.S. If you have a burning question that can’t wait till Tuesday, please reply to this email and someone from our team will get back to you :)
Investors should carefully consider the investment objectives, risks, sales charges and expenses of USVC before investing. USVC's prospectus contains this and other information and may be obtained at http://usvc.com/prospectus or by calling +1 (844) 988-1720. Read the prospectus carefully before investing.
Select is a co-invest program alongside USVC. There is no guarantee USVC will invest in any specific opportunity in the Select program.
There is no guarantee you will get access to any specific deal if admitted to the program and you may have your allocation reduced due to regulatory or other reasons.
This communication is for informational purposes only, is not intended to be a recommendation for any investment or other advice of any kind and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction. Any such offers will only be made pursuant to USVC’s prospectus, which should be carefully reviewed before investing.
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