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OC50: Diversified Investing in Venture Capital

By: Gonen Hollander OC50 provides a highly diversified portfolio across sectors, stages, and geography.OC50 is fully invested in approximately 6 months (in comparison to 4-5 years for the average VC fund).OC50 minimum is $10,000 per client and is registered-account eligible when investing through a registered broker. OurCrowd has been Israel’s most active VC firm since 2018. It is also one of the largest venture capital equity crowdfunding platforms in the world. The OurCrowd 50 (“OC50”) Index Fund series was launched in 2017 to provide a way to passively invest in a highly diversified portfolio of startup companies. OC50 is OurCrowd’s flagship product. Each OC50 fund invests in the next 50 companies in which OurCrowd invests. We are currently raising the fifth OC50 fund. In this article, I will highlight what makes OC50 stand out in comparison to other VC funds. Portfolio diversification Venture capital funds are typically focused on certain stages (Early/Growth/Late) and particular industries and geography. To diversify in sectors, geography, and stages an investor would need to invest in multiple VC funds. The typical minimums for reputable...

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Four Reasons Why Canadian Investors Should Add Venture Capital to Their Portfolio

By: Gonen Hollander Many individual investors and financial advisors may not have considered including venture capital as part of their portfolio because historically the minimum investment was in the millions of dollars. Relatively new funding platforms such as OurCrowd offer qualified individual investors an opportunity to invest in start-up deals with modest investments at the same terms VC funds receive. 1. Higher historical returns The most compelling reason to allocate a portion of your portfolio to venture capital is to improve your ROI: venture capital has historically outperformed the public markets. Compared with the S&P 500 and Russell 2000, Cambridge Associates US Venture Capital Index has consistently outperformed the two public market indices over any selected time horizon over the past 25 years 2. Follow the smart money The smartest money in the investing world includes venture capital in their asset allocation. Institutional investors such as pension funds and endowments are increasing their exposure to alternative asset classes in general and venture capital in particular. The Yale Endowment Fund, which is considered by many to be the gold standard...

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Three Things to Know Before Investing in Venture Capital

By: Gonen Hollander Venture capital investments are illiquid and require a longer holding period.Increase in valuation is only realized when there is an exit or a follow-on round (12-18 months is the average cycle).Diversification is key – 20% of the companies will generate more than 80% of the returns Venture capital is a good way to diversify a portfolio: it can provide a hedge against market downturns and has higher potential returns than the public markets. Nonetheless, there are things investors should keep in mind before making an allocation to this asset class. In this article, I mention a few of the things that investors ought to consider prior to investing in VC. Illiquid and long-term Pre-IPO investments by their nature are long-term investments. Hold periods range from 1-2 years for pre-IPO companies, 5-7 years for early growth, and up to 10 years for a traditional VC fund. While liquidity events can happen sooner, you should plan for a lengthy holding period and invest money that you will not need in the near future. Changes in valuation Unlike public...

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Top 10 Post-Pandemic Tech Trends

by OurCrowd OurCrowd presented its top ten post-pandemic tech trends on July 13, 2021, broadcasting them live to an audience around the world. With so many changes and challenges during the last year of the pandemic, from shortages of consumer goods to moving life online, the tech industry has been more important than ever in providing creative solutions. It has also been a record-breaking year for venture capital investing, and overall growth in the tech industry. The online event was based on a popular session of the OurCrowd Global Investor Summit held annually in Jerusalem and which was canceled this year due to the pandemic. “It’s extremely important this year given the unprecedented growth of the tech investment scene driven by the unbelievable digital transformation that has affected all of our lives,” said Jon Medved, the founder and CEO of OurCrowd, as he opened the event. “There is no better time to analyze what the tech trends are for the smart investor, and where the technology market is moving.” Many of the ideas and solutions that emerged during the...

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Green Energy Makes Business Sense

• Venture funds are joining the rush to renewable energy—and it’s not a passing fad• Government subsidies will help, but innovative companies and business logic will drive growth From the frozen electric grids of Texas to the tar-soiled beaches of Israel, the urgent need to transform our dependance on fossil fuels is becoming clear. You don’t have to be a tree-hugging naturalist to embrace the shift. Even the world’s largest oil producers have begun a strategic pivot toward renewables. In 2016, the Saudi government announced its Vision 2030 which it said aimed to end the kingdom’s “addiction” to oil and diversify its economy and energy sources. Venture investment in renewables has soared as global investment in energy transition more than doubled from $235 billion in 2010 to $501 billion in 2020, according to Bloomberg NEF. In 2019, venture and private equity investment in cleantech was estimated between $9 and $16 billion, up from less than $500 million in 2013. Global oil companies like Shell, BP, Total and Repsol are investing unprecedented amounts to develop new solar, wind and other...

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