Tag: diversification

New year, new beginnings: An intro to Venture Capital 101

New year, new beginnings: An intro to Venture Capital 101

Jan 3, 2017 |

Consider this your formal welcome to a new year, with new ways to consider investing. If you’ve been considering diversifying your investment portfolio with startup investing – read on for an overview of how to get started. Yet another diversification conversation Most financial professionals agree that asset allocation is one of the most important investment decisions, and many recommend diversification across asset classes, as opposed to just picking and purchasing stocks. Spreading your investments across asset classes reduces risk: Obviously, a portfolio comprised of only a few stocks and bonds is susceptible to a big hit should the market suffer a drop; or, even worse, a crash. Those who divide their investments — not only among different stocks and bonds, but other asset classes, such as cash, real estate, or short-term money market securities, for instance — won’t be as impacted by a downturn. Additionally, paying attention to the particular risk level of each investment, and balancing allocation appropriately, is a way to come out ahead. Depending on what your investment goals are – a child’s college fund vs. retirement...

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The road already traveled: Why invest in startup follow-on rounds?

The road already traveled: Why invest in startup follow-on rounds?

Feb 10, 2016 | , ,

Today, access to quality investment opportunities are no longer a luxury reserved for the well-connected. Everything from startups to real estate development projects are now available to the masses for investment. This access has garnered lots of attention from prominent investment thought leaders. One of the biggest issues they’re grappling with is how to educate the public to make sure they are investing responsibly in these new, often risky asset classes. In this post, we’re going to talk about what Brad Feld refers to as a new, official trend in the world of venture capital. The Opportunity What’s this new trend we speak of? In January 2011, Union Square Ventures launched their first “Opportunity Fund.” The fund was formed to invest exclusively in USV portfolio companies raising follow-on rounds of investment. This investment strategy was born out of the realization that a majority of returns in a fund are generated by a small number of the portfolio companies. Fred Wilson, USV’s founder and managing partner described the rationale behind launching the fund in 4 basic points: “This fund is meant to...

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Introducing OurCrowd Continuity Fund (OC²): A new investment offering

Introducing OurCrowd Continuity Fund (OC²): A new investment offering

Feb 3, 2016 | ,

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...

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Risk and Reward: The truth about diversification

Risk and Reward: The truth about diversification

Feb 2, 2016 | , ,

It is a common misconception that investing in startups is for the uber-wealthy, venture capital and angel investing insiders; being exclusive and risky — an alternative asset class where losing is part of the strategy. Venture capitalists leaders highlight how often you lose before you win. Thought leader Fred Wilson of Union Square Ventures says, “Investing in startups is risky. If you make just one investment, you are likely going to lose everything. If you make two, you are still likely to lose money. If you make five, you might get all your money back across all five investments. If you make ten, you might start making money on the aggregate set of investments.” How Much to Invest That being said, no one will advise you to put a large percentage of your savings into early stage companies. However, if you allocate 5% of your overall portfolio into startup investments you can increase returns and reduce risk. According to a SharesPost whitepaper, if you allocate 5% of your investments to private growth companies, you can increase the returns of a traditional portfolio by...

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