VentureFounders has a fee structure that is designed to align the interests of all parties. Core to this is that VentureFounders operates a profit share (carried interest) model, one that has long been used by the venture capital and private equity community.
Our fees are structured to encourage the sort of behaviours that are important in early-stage investing.
Upon a successful monetisation event that delivers proceeds over and above your original gross investment amount (excluding the EIS benefit), we deduct a carried interest payment equal to 20% of your profit.
We believe that this encourages the right sort of behaviours. Like a venture capital firm or lead angel, we do a significant amount of upfront work to identify the investment opportunities we believe in. We then undertake thorough due diligence to validate the opportunity and ensure that the deal is structured in a way that the rights of our investors are protected, ahead of presenting it to our investor base. That’s why on VentureFounders you will only ever find a handful of curated investment opportunities that fit with our investment criteria.
As part of the fundraise, we charge companies a success-based fee for arranging the finance. While this will vary from business to business, an element of this fee (3%) is fixed and encapsulates the costs of monitoring and managing the investment on behalf of our investors, over the lifetime of the investment.
By aligning ourselves with our investors over the long term, our profit share model means that we have an absolute focus on investor protection and return.
VentureFounders takes a proactive approach to portfolio monitoring. We are in regular dialogue with the management teams, helping them where we are able to do so and sometimes taking board observer positions. All of this is designed to protect the interests of our investors and maximise their return. As an investor through VentureFounders, you will be kept regularly updated on the progress of your investments; all this is done through our online portal and our suite of portfolio monitoring tools.