Questions from investors

Recent questions

Q1: Why are your fees higher than a traditional VC fund? Why do you get 55% of the carry as opposed to just 20%?

A1:

Our model is distinctively different from traditional VCs. While VCs operate on a large scale, benefitting from economies of scale across many deals, we focus on a smaller, more specialized portfolio of market-proven companies, vetted through our network of accountants who also act as customers. This specialization means we work with fewer companies but more intensively, necessitating higher fees per deal to remunerate our team in way that keeps us all aligned with the outcome. Despite the higher fees, our targeted, efficient approach leads to higher or comparable returns due to better conversion rates and less wastage in our operations.

Q2: What are your fees for investing deal by deal?

A2: Initially, we will not charge any fees for the first couple of introductions as we focus on building our investor network and demonstrating value. We may introduce fees later based on the value provided.

Q3: Are you investing money directly into startups?

A3: No, we invest using sweat equity to access early equity in businesses, getting more equity at better valuations and minimizing risk through market validation and our network.

Q4: Why do you claim to achieve a 19x return, much higher than typical funds?

A4: Our claims are based on conservative historic data, with a 25% failure rate and an average exit value of $50 million AUD per company, which is based on comprehensive external reports. Our de-risking process and use of sweat equity allow us to engage with viable companies early, aiming for higher returns without relying on outlier successes.

Questions to ask investors:

If they say they are only interested in deal-by-deal, we can ask: Why are they only interested in this?

Understanding why investors prefer deal-by-deal investments helps tailor our messaging and potentially show the benefits of diversified portfolios, aligning better with their investment goals.

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