Raise your hand if you’ve ever thought, if only I’d gotten in on the ground floor of Airbnb, Instagram, or any of the scads of breakthrough tech startups.
Now lower your hand and give yourself a break, because even if you’d had a pile of cash to invest, you still probably wouldn’t have had any way to get in before those companies went public.
Why is that? Because putting money into venture funds is almost exclusively available to institutional investors, or industry insiders with the right connections and a lot of cash to plunk down.
Until now thanks to Wealthsimple. The fintech superstar announced today the launch of the Wealthsimple Venture Fund I.
In partnership with Washington, D.C.-based alternative asset firm Accolade Partners, the new fund will focus primarily on technology and healthcare companies.
Wealthsimple said contributions allocated to venture capital will invest in firms over their full lifecycle, including from the seed stage, or the stage where the idea for a new business or product idea is still in development.
Wealthsimple’s Chief Investment Officer, Ben Reeves, is responsible for the creation of the new fund.
“Private investments, meaning investments that aren’t available through public stock and bond markets, have long been part of many successful investors’ – well, successful wealthy investors’ – portfolios. Things like real estate, venture capital and private equity can help diversify a typical equity portfolio and provide attractive returns, but they often aren’t available to those who don’t have millions to invest.” Reeves writes.
“Our whole reason for existing is to make the tools of wealth broadly accessible, and so just as we’ve made sophisticated public market investing available through our Wealthsimple Invest portfolios, it made sense to do that with really high-quality private investment opportunities too.”
Wealthsimple’s Venture Fund I is what’s called a “fund of funds.” That means Accolade chooses funds managed by VC and private equity firms like Andreessen Horowitz, Accel Partners, and Kleiner Perkins, and those funds are invested in a bunch of different companies. The first three years are mostly spent transferring your money to the various funds as managers need it.
Distributions — when your money starts coming back to you — start in the fourth year, as managers sell the companies they’ve invested in. That process continues, with you receiving more and more of your capital back (plus, ideally, more) until the end of the life of the fund, which is typically about 10 years, or how long it usually takes for the companies the funds invest in to be acquired or IPO.
Sign up now to learn more about Wealthsimple Venture Fund I.