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Fund Details

Fund Strategy: Early stage technology investments.
Target: $3,000,000 to $20,000,000
Minimum Investment: $25,000 individual, $250,000 institutional
Structure: Delaware LLP
Term: 10 Years
Management Fees: 0%
Total Carry: 20%

TRACK RECORD

Select Micro Fund I is closed and is at 2.84x unrealized return to its investors. The returns are realized as exit events occur such as acquisitions or IPOs.

Number of Investments

We will make about 10 investments per each fund.

WHY INVEST IN STARTUPS?

Early stage tech startups create more value than ever while still private today. Over 140 startups have achieved $1B valuations – most in under 5 years. Uber, Pinterest, and AirBnB are just a few household brands that delivered over 100x to their early stage investors.


HOW WE INVEST

We form pools of capital called "funds." We then manage this fund professionally handling all aspects of investment to reporting to exit proceeds. These professionally managed funds are how large sophisticated institutional investors invest. Now, they are available to qualified individual investors as well.

HOW CAN YOU PARTICIPATE?

You invest in one of our funds. We as fund managers invest our own capital in the fund as well. This way, we combine our resources and use our increased investment capacity when evaluating opportunities. The funds are able to attract more favorable deals compared to individuals. While most funds charge "management fees", we don't. That is because we're invested in the fund ourselves and are in it for the long run. 

HOW TO PICK THE WINNERS

Selecting the most favorable startups is not easy. It's important to avoid biases and not give in to temptation when deciding in which startup to invest. We evaluate all key aspects of promising startups such as team, location, markets, products, margins, patents, and mobility consistently. This way we're not swayed by one or two strong attributes or overlook weaknesses. This consistent process helps reduce noise and avoid biases thus leading to higher potential returns. We then invest together with some of the most prolific investors in Silicon Valley further reducing risk as strong investors add great value to startups.

HOW DOES THE SELECT MICRO FUND WORK?

You invest in the fund. The fund invests in select startups. When an exit event happens, the fund returns capital to you. The term of the fund is 10 years.

HOW WILL YOU SELECT DEALS?

We specialize in analytical methods that help us avoid the cognitive biases when making investment decisions. We deploy multi-factor analysis in evaluating deals in our pipeline, then pick the most favorable deals based on our analysis. 

WHAT IS YOUR SELECTION CRITERIA?

We rank the startups based on weighted risk scoring of a number of attributes such as market size, global applicability, autonomy, product, location, mobility and the pedigree of the team. To learn more about our approach, take a look at our founding partner 

WHAT ARE THE COSTS ASSOCIATED WITH THE FUND?

The fund does not collect management fees. The legal and administrative expenses are covered by the fund and expected to be about $10k per deal. We collect a 20% carried interest.

CAN I SELL MY STAKE IN THE FUND AND GET OUT EARLY?

You may not sell your stake or otherwise transfer your interest outside of serious events like death or divorce. Startup investments are highly risky and illiquid.

WILL I GET UPDATED ON THE PROGRESS OF THE FUND AND WHAT IT INVESTS IN?

Yes, we will provide periodical updates about the investments and the progress of the fund. The fund will issue the appropriate forms for reporting purposes.

WHICH LAW FIRM DO YOU USE?

We work with Cooley, Silicon Valley's top law firm used by top investors. We bank with Silicon Valley Bank, also a specialized financial institution.


Executive Summary of Key Principal Terms

The following information is presented as a summary of certain of the key principal terms only and is qualified in its entirety by the Limited Partnership Agreement of the Fund (the “Partnership Agreement”), which will be circulated to investors prior to closing.  To the extent that this summary conflicts with the Partnership Agreement, the Partnership Agreement will control.

STRUCTURE

Venture Science Select Micro Fund II, L.P., Accelerator Fund I, LP or Institutional Fund I, LP (the “Fund”) will be organized as a Delaware limited partnership.  Venture Science GP, LLC, a Delaware limited liability company, will be the general partner of the Fund (the “General Partner”).  Palo Alto Venture Science, LLC, a Delaware limited liability company (the “Management Company”), will provide certain administrative and support services to the Fund. 

PURPOSE

The general purpose of the Fund is to make venture capital investments in the securities of private companies.

TARGET SIZE

$2 to $20 million

MINIMUM COMMITMENT

$25,000, except as otherwise approved by the General Partner

TERM

10 years from the due date of the initial capital call of the Fund (the “Activation Date”), subject to two one-year extensions at the General Partner’s discretion

INVESTMENT PERIOD

4 years from the Activation Date

CAPITAL CALLS

Each Partner shall make contributions of capital in installments as requested by the General Partner upon ten (10) days’ prior written notice.  No Partner will be required to contribute any capital following the termination of the Investment Period except to the extent necessary for (i) operational purposes, including payment of management fees, (ii) completion of transactions in process on such date, (iii) funding follow-on investments in existing portfolio companies, and (iv) fulfillment of indemnification obligations to the Fund.

MANAGEMENT FEE

None

CARRIED INTEREST

20% of net profits on the overall committed capital

CLAWBACK

Yes

REPORTING

The Fund will furnish (i) unaudited financial statements to the Limited Partners annually, (ii) quarterly summaries of investments, and (iii) annual tax information necessary for each Partner’s U.S. tax returns


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