Yesterday, Angel List Announces a new venture capital fund, USVC. AngelList has long been a major innovator in online capital formation. The company has created sister platforms including: Republic And Coin ListWhile providing a digital way for early-stage companies to raise capital and for investors to participate in the asset class.
USVC is a VC fund open to anyone, accredited or not. For a low minimum fee, an investor can participate in a diversified fund that holds some of the biggest names in the private securities market. Highly illiquid and not for the impatient, USVC is emblematic of an effort to provide more opportunities for retail or smaller investors.
AngelList CEO following USVC announcement Avlok Kohli took X providing some additional information about the fund for investors, including how fees/carries work. He noted that he saw many questions about the USVC in X and tried to answer some of them.
Regarding fees, Kohli said annual fees are capped at 2.5% for the first year. The fee will be 3.6%, but AngelList supports it for the first year. He added that fees generally decrease as you grow in a VC fund, but USVC fees can increase and they are looking for ways to “remove that uncertainty.”
More importantly, USVC does not charge carrying fees like a traditional VC does.
“USVC aims to make total costs the same or less than investing in a good VC fund. And much less than investing in a fund of funds. All while enjoying the potential benefits of a fund of funds that can make direct, secondary and fund of funds investments. A typical fund of funds charges 1/10 (fee/carry) in addition to 2/20 of a VC, so 3/30 total.”
The fund structure will include a mix of early-stage and mid- to late-stage assets. USVC currently holds late-stage and mid-stage companies.
Regarding liquidity, USVC aims to provide up to 5% partial liquidity each year. Kohli warns that USVC is not the place if you need access to liquidity.
International investors cannot participate yet, but they are working on it.
While there is no upfront sales load, a sales load may be added if the fund is sold by a broker.
On valuing the fund of illiquid assets, Kolvi says USVC’s valuation policy determines Net Asset Value using audited financial data from underlying funds or current funds.
USVC is subject to annual audits under the same standards as any company traded on US exchanges.
Since not all of this information is available on the USVC website, Kohli said they will update the information.
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