If you started investing in venture in 2021, you may be regretting it.
A top 10% fund from that year is at 1.54x net TVPI today. The median fund from 2017 is at 1.68x net TVPI.
You may have picked one of the best managers of 2021 and yet still lost to an average manager from four years earlier.
Vintage years may be more meaningful than you realize
StepStone studied 1,000+ venture funds from 2000 to 2022. Just 22% to 30% of vintage years produced 80% of all returns.
The gap between years can be so wide that a bottom quartile fund from a good year may beat a top quartile fund from a bad one.
And few people see “bad” vintage coming. Venture funds raised $168 billion in 2021, nearly double the amount raised in 2020, despite returns now looking worse.
Some endowments tried to solve the vintage problem decades ago by investing every year, with minimal exceptions.
Doing that as an individual or family office could mean a new fund commitment every year for a decade or longer.
Minimums may start at $1 million to $5 million per fund. Private funds often raise during a limited period of time, then close for ten years. And capital gets called on the manager's schedule, not yours.
Why recurring investments may beat one-off investments
Most people don't have a lump sum of capital to invest across a decade. They have a paycheck paid bi-weekly and a retirement account.
One way to invest a paycheck reliably may be doing it automatically. For example, one large employer moved new hires to automatic 401(k) enrollment, and participation went from 37% to 86%. Nothing changed except the default.
On the other hand, if investing isn't automatic, it may happen less often and even at the wrong time. In venture, that's often a mistake you may not be able to fix later.
What USVC is doing to make this more accessible
USVC is an evergreen fund. You can buy shares any business day at net asset value, starting at $500.
And each dollar can spread across vintages on the way in:
New funds. We back emerging managers raising today. 2026 vintage.
Fund secondaries. We buy LP stakes in funds that are a few years old, typically after their investment period. 2022 to 2025 vintages.
Late-stage secondaries. Exposure to shares in companies funded years earlier. Older vintages still.
A monthly investment in USVC can be a monthly investment in multiple vintage years at once.
I've personally invested $1 million since our announcement in April.
This month I set up a recurring investment on top of it. It will recur at the same amount, on the same day, every month while setup.
Recurring investing is live to all U.S. investors on usvc.com today.
For important information and Fund holdings, see https://usvc.com/portfolio.
— Ankur
P.S. Next Monday, September 21st at 2pm ET, I'm co-hosting a free live session about venture investing from your retirement account with Mat Sorensen of Directed IRA.
What we'll cover:
How a self-directed IRA can access exposure to startups, funds, and private companies
The IRA rules to understand before a single retirement dollar goes into a private deal
Why venture may have been so hard for individual investors to reach, and what's changing
Why a Roth can be a good tax wrapper for anything long-horizon or illiquid
Live Q&A with Mat & me!
It’s free to attend, and a recording will be sent to everyone who registers.
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 (888) 200-4361. Read the prospectus carefully before investing.
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.
Investing in the USVC Venture Capital Access Fund involves significant risk, including the possible loss of principal. Venture capital investments are speculative, illiquid, and subject to a high degree of risk. Past performance does not guarantee future results.
USVC Venture Capital Access Fund is distributed by North Capital Private Securities Corporation (NCPS), member FINRA/SIPC. NCPS is not affiliated with USVC's adviser or its affiliates.
Investing in USVC's shares involves substantial risk, including the potential loss of your entire investment. Shares are not listed on any exchange, are illiquid, and liquidity is limited to periodic repurchases at the discretion of the Board, which are not guaranteed. This investment is speculative and suitable only for long-term investors who can bear the risks of limited liquidity. Certain conflicts of interest involving USVC and its affiliates could impact USVC's investment returns and limit the flexibility of its investment policies. Past performance does not guarantee future results. Fees, expenses, and conflicts of interest may reduce returns.
USVC's shares have no history of public trading. You should not expect to be able to sell your shares other than through USVC's repurchase policy, regardless of how USVC performs. USVC does not intend to list its shares on any securities exchange during the continuous offering, and it does not expect a secondary market in the shares to develop.
USVC invests in portfolio companies directly, through funds, and through special purpose vehicles funds which are subject to certain risks including those related to illiquidity, indirect fees, valuation, limited operating histories and limited information regarding underlying investments. As a result of the foregoing, an investment in USVC's shares is not suitable for investors that require liquidity, other than liquidity provided through USVC's repurchase policy. The amount of distributions that USVC may pay, if any, is uncertain.
