Investment Approach

Angel Investments:

• Objective:

  • Provide initial funding to startups in their earliest stages, often before they have established product-market fit or revenue.

• Investment Size:

  • Typically ranges from $100,000 to $500,000 per startup.

• Involvement:

  • Engage with startups through mentorship, strategic guidance, and networking opportunities.

• Early-Stage Investments:

  • Objective:

    • Support startups that have demonstrated initial traction and are preparing for scaling operations, customer acquisition, and product development.

  • Investment Size:

    • Ranges from $500,000 to $2 million per startup.

  • Involvement:

    • Provide not only capital but also business development support, operational assistance, and access to industry connections.

Selection Criteria

• Innovation and Market Potential:

  • Evaluate the uniqueness of the startup’s product or service and its potential impact on the market.

• Team and Leadership:

  • Assess the startup’s management team, including their experience, vision, and ability to execute the business plan.

• Traction and Milestones:

  • Look for evidence of product development progress, customer engagement, and early revenue, where applicable.

• Scalability:

  • Determine the startup’s potential for growth and expansion in its target market.

Fund Structure

Diversification

• Portfolio Construction:

  • Number of Investments:

    • Aim to invest in approximately 20-30 startups per fund lifecycle to diversify risk.

  • Allocation:

    • Allocate capital across various sectors and stages to mitigate risk and capture growth opportunities.

• Risk Management:

  • Due Diligence:

    • Conduct thorough due diligence to assess potential risks and rewards.

  • Diversification:

    • Balance investments to spread risk across different industries and business models.

Rebalancing

• Frequency:

  • Periodic rebalancing of the fund’s portfolio based on investment performance, market conditions, and strategic goals.

• Criteria:

  • Adjustments made to ensure alignment with fund objectives and to optimize return potential.

Liquidity

• Investment Horizon:

  • Timeframe:

    • Typical investment horizon of 5-7 years, allowing startups sufficient time to grow and achieve liquidity events.

• Exit Strategy:

  • Types:

    • Include IPOs, acquisitions, or secondary sales.

  • Exit Planning:

    • Work with startups to develop and execute exit strategies that maximize returns.

Fund Details

Management Fee

• Fee Structure:

  • Annual Management Fee:

    • 2% of the fund’s net assets.

  • Performance Fee:

    • 20% of profits above an 8% preferred return.

Minimum Investment

• Initial Investment:

  • Minimum of $250,000 to participate in the fund.

• Subsequent Investments:

  • Additional investments can be made in increments of $50,000.

Marketing and Distribution

Target Audience

• Investor Profile:

  • Accredited investors, family offices, and institutional investors seeking exposure to high-risk, high-reward early-stage investments.

• Investment Goals:

  • Ideal for those looking to support and benefit from the growth of innovative startups.

Promotion

• Key Selling Points:

  • Access to early-stage investment opportunities, potential for high returns, and involvement in nurturing groundbreaking startups.

• Channels:

  • Promotion through venture capital networks, angel investor groups, online platforms, and direct marketing.

Educational Content

• Investor Resources:

  • Detailed information on the fund’s strategy, investment process, and performance expectations.

• Webinars and Seminars:

  • Host educational sessions to explain the fund’s objectives and investment opportunities.

Compliance and Administration

Regulatory Compliance

• U.S. Compliance:

  • Adhere to SEC regulations and other applicable U.S. financial laws.

• International Compliance:

  • Ensure compliance with relevant regulations in jurisdictions where investments are made.

• Audits:

  • Regular audits to ensure transparency and regulatory adherence.

Fund Administration

• Administrator:

  • Partner with a reputable fund administrator for daily operations, including investor transactions and reporting.

• Reporting:

  • Provide regular performance reports, including detailed statements on investments and fees.

Custodian Services

• Selection:

  • Choose a reliable custodian for safekeeping of the fund’s assets and handling transactions.

Performance Monitoring

Benchmarking

• Metrics:

  • Regularly compare the fund’s performance against industry benchmarks and relevant market indices.

• Reports:

  • Detailed performance reports available to investors, highlighting returns, risk metrics, and portfolio composition.

Investor Feedback

• Surveys and Feedback:

  • Collect feedback from investors to assess satisfaction and make improvements to the fund’s strategy and operations.

• Advisory Board:

  • Consider forming an advisory board of industry experts to provide insights and recommendations.

Interested in Investing? Contact Us to learn more about the McKenzie Shanahan Seeding Fund and how you can be part of the next generation of innovative startups.