OurCrowd is proud to announce the launch of its OurCrowd Continuity Fund (OC2), a special opportunities fund devised to take advantage of preemptive rights in select follow-on rounds for portfolio companies. OC2 has an automated investing process, only investing in follow-on, up-rounds led by top venture capital and strategic investors.
The dynamics of startup growth and venture investing is such that preemptive rights are a critically valuable asset for being able to invest in breakout stars, and OC2 is structured to give its investors first access to unexercised preemptive rights.
Four reasons why we’re excited about launching OC2
- Access to otherwise limited opportunities: As an investor, one of your most valuable assets is gaining a seat at the table to invest in the follow-on rounds of your companies that emerge to be the biggest winners. Pro rata rights are not about downside protection, they are about guaranteeing you the right not to be crowded out of highly competitive future financing rounds for your companies. OC2 is opportunistically leveraging OurCrowd’s pro rata rights across its 90+ portfolio companies to gain access to a select group of companies.
- Strict investment criteria signal strong positive momentum: OC2 will only invest in OurCrowd follow-on rounds with a strong institutional lead investor, at a higher valuation, which generally signifies an achievement of company milestones and positive momentum for greater returns.
- Built-in diversification: The OC2 fund will have a minimum portfolio size of 12-15 companies and will be diversified across stage and sector, given the inherent diversity of OurCrowd’s wider portfolio.
- A positive trend in Opportunity Funds: Early stage firms such as Union Square Ventures and Foundry Group have pioneered the follow-on fund model with tremendous success and Y Combinator recently announced a $700M Continuity Fund to exercise pro rata rights across its portfolio. Funds established by top venture capitalists using this strategy have shown a track record of strong results.
For more information about the OC2 opportunity, watch a short video series with OurCrowd Investment Partner, David Stark, and Chief Investment Officer, Pini Lozowick: