Investors: What to look for in a Venture Capital Fund?

Venture capitalists seek out businesses with the most innovative ideas and the highest growth potential. For much of the 20th century, however, this area of investment was offered exclusively to ultra-high-net-worth individuals and their families. Fortunately, with recent policy movements in the venture capital space, such as the JOBS Act, some funds now offer this area of investment to individuals for a relatively low buy-in. With Crowdfunding turning everyone into VCs, what should investors look for in a venture capital fund?

1. Diversification

Before we dig deeper into what, first let's understand why venture capital? Aside from high reward potential, one of the main reasons investors flock to venture capital is diversification. This strategy mimics the risk mitigation of portfolio diversification. While many individual investors spread their portfolios into stocks, bonds, and money markets, it is wise to take the long term approach and invest in venture capital as an asset class. However, it's important part is to seek out managers with the ability to outperform consistently by adding meaningful alpha. Please read Ms. Desai's blog, "Invest like a Pro with Crowdfunding," to learn more.

2. Management

While the general partners of a VC fund are responsible for vetting and executing investments that will earn a successful exit for all investors in the fund – it’s mainly a people business. It’s important to pick a manager you trust and share mutual respect for. Other key factors to consider when evaluating a management team include the managers’ education, industry experience, network, and vision. Please read Ms. Desai's blog, "Founders: How to pick your VC?," to learn more.

3. Strategy

Regardless of their discipline, every investor has his or her own investment strategy, and so does every venture capital fund. A venture fund’s strategy dictates the type of investment it looks to make, be it in a cash-flow-positive business, a rapidly-expanding business, a path-breaking sectors, or one that exhibits some of all. Sector, Stage, and Size also play an important role. Most venture capital funds are industry specific, such as healthcare, manufacturing, or technology. However, each industry performs well at different times. Currently, majority of the investments are made in the AI sector, which requires larger check sizes, which is concentrating the venture business. According to Pitchbook in 2024, 30 firms raised 75% of all capital raised by VC funds in the US, mostly investing in AI. But, what about the other industries? Do they not have any potential?

Companies require financing at several different stages, including seed, early stage, growth, expansion, and later stage. While returns can be realized by investing in the right company at any stage, early and growth stage investments generally perform better. The size of the fund also plays an important role here. Not necessarily the case always, but smaller funds sometimes target higher-multiple, riskier early-stage investments, while larger funds may focus on steadier, later-stage deals. Ensure the fund size is appropriate for its stated strategy and the target market's capital requirements.

4. Financial & Legal

The last but important aspect to look at is the numbers. How much is the management fee? What is the carry? Does the GP have skin in the game? Past IRR numbers, if available? Review the fund's legal documentation, such as the Private Placement Memorandum (PPM) and Limited Partnership Agreement (LPA), paying close attention to governance rights, liquidation preferences, and anti-dilution provisions. How does redemption and liquidity look? And finally, how do taxes work?

Note: This is not financial guidance. While it is important to have a diversified portfolio, please consider if you are looking for income, capital preservation or growth? Along the way, how tolerant are you of volatility or risk-averse? And is liquidity a concern? The answers to those questions inform allocation decisions, within both traditional and alternative assets. Please note we may offer investment products that invest in the asset class(es) or industries included in this blog.

The Entrepreneurial Mindset: Habits that lead to Success

 

Founders (or Entrepreneurs) are the pillars of a company and the venture business. However, their habits are the foundation that supports growth, innovation, and resilience over time. Understanding and adopting these habits can help aspiring entrepreneurs build businesses that stand the test of time and also make a meaningful impact.

Clear Vision and Mission

As rightly said, if you don’t know what you want, you will never achieve it. Thus, in order to succeed, entrepreneurs must have a clear vision and mission. This provides direction and purpose. The vision is the larger picture of what the entrepreneur wants to achieve in the long term. The mission defines the business’s core purpose and values.

Setting Specific Targets

Targets break down big ambitions into manageable steps. They also create accountability. Setting clear, measurable targets helps entrepreneurs track progress and stay motivated. What is the main goal for the business this week or month? What are the three top things that need to be done in order to achieve the goal?

Healthy Routines

Entrepreneurs put in long working hours, which demands energy and focus. Healthy routines support physical and mental well-being, which are essential for optimum performance. This habit includes regular exercise, balanced nutrition, and adequate sleep.

Positive Attitude

Only 0.05% of startups receive venture capital funding, plus the constant pressure of maintaining an upward trajectory when it comes to sales and financials can be stressful. A positive attitude helps entrepreneurs face setbacks with resilience. It encourages problem-solving instead of dwelling on obstacles. This habit involves practicing gratitude, staying optimistic, can do attitude, and focusing on solutions.

Learning Everyday

The business world is constantly evolving. Successful entrepreneurs commit to continuous learning through everyday work, reading, courses, and networking. This habit keeps them informed about industry trends and new skills. Entrepreneurs who learn consistently can adapt and innovate. As famously said by Robin Sharma, “Investing in yourself is the best investment you will ever make. It will not only improve your life, it will improve the lives of all those around you”.

Time Management

Strong time management helps entrepreneurs prioritize tasks that drive results. This habit involves planning the day, avoiding distractions, and delegating when possible. Entrepreneurs who manage time well can focus on high-impact activities and reduce stress.

Discipline and Consistency

Discipline ensures entrepreneurs follow through on plans even when motivation wanes. Consistency builds momentum and trust with customers and partners. Entrepreneurs who practice discipline and consistency create reliable brands and long-term growth. Consistency is the key to mastery.

Problem Solving Mindset

Entrepreneurs face challenges regularly. A problem-solving mindset means approaching issues with curiosity and creativity rather than frustration. Entrepreneurs who embrace problem-solving can turn challenges into opportunities. One of the important things VCs look at while evaluating a business plan is what problem is the startup solving in the industry. Many entrepreneurs tend to possess this inbuilt quality, but it's essential to keep the flame alive throughout their startup journey.

Calculated Risks

Risk-taking is part of entrepreneurship, but successful entrepreneurs take calculated risks. They gather information, weigh pros and cons, and prepare for possible outcomes.

Strong Networks and Communication

Networking opens doors to partnerships, funding, and advice. Effective communication helps entrepreneurs share their vision and build relationships. Entrepreneurs who invest in building networks and communicating clearly increase their chances of success.

Creating Value and Giving Back

Successful entrepreneurs focus on creating value for customers, employees, and communities. They understand that lasting impact comes from contributing positively. Giving back strengthens character and fulfills a deeper purpose beyond profit. Oftentimes, those are the companies that build reputation and stand the test of time.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Founders: How to pick your VC?

Founders (or Entrepreneurs) are a brave and courageous bunch that have a bold industry defining vision. On that journey, they require lot more than just financing. E.g., Domain Expertise, help with PR & Marketing, Recruiting, Viable Exit Strategy, Follow Up financing, etc. Often, these things are overlooked, and fundraising becomes a numbers game. Quantity vs. Quality takes over. How many VCs can I pitch in six months? How many investor meetings in a week or month to achieve that goal? While money is green everywhere, it comes with strings attached. Then how should Entrepreneurs approach fundraising or pick a VC? 

01. Vision & Investment Principles Alignment

An Entrepreneur and a VC relationship only works if it’s built on a foundation of common goals and vision for the future. A VC must be able to see the long-term potential of a company, it's product or service, and help navigate the short-term hurdles based on broader investment principles. E.g., NIN Ventures – its mission is to democratize venture capital by making Crowdfunding available for all. This industry defining vision has a clear sense of purpose: to provide access to millions of investors to a new asset class: Venture Capital, with a direct investment benefit, which makes it a superior business model compared to other investment options currently available in the market. Here, the greater good is in alignment with a business model that investors require to attain higher returns.

02. Experience & Expertise

Generally, most VCs have an MBA or a Finance background. They have experience in Investment Banking, Private Equity, Operations, etc., or come from an Entrepreneurial background. It is also important that the VC understands your industry, technology, and market, and can provide valuable guidance beyond funding. i.e., business model, access to network of partners, exit strategy, etc. Often, this is the reason why Entrepreneurs get attracted to VCs with deep domain expertise with a track record of success within their industry. Most Entrepreneurs tend to shy away from first-time fund managers or non-branded VCs, given lack of track record. Historically, if you look at the USVC Index and First Time Fund Managers, First Time Fund Managers tend to outperform the USVC Index. While there are many factors that lead to this conclusion, the one main reason is first-time fund managers take highly calculated risks and back bold visions, generating higher returns. An Entrepreneur's experience and expertise also play an important role in picking the right VC.

03. Personality Traits

Certain characteristics like goal oriented, hardworking, disciplined, integrity, adaptability, etc., are all needed in any relationship. Often underrated is a sense of mutual respect and trust, needed for a healthy working relationship between a VC and an Entrepreneur. Transparency in communication and a good cultural fit are added bonuses. However, the most important thing is conviction in each other’s ability to navigate a turbulent path.

04. Fund

While it is important to check VC bios for their education, experience, sweet spot or investment strategies. It is equally important to check the status of the fund. How big is the fund? What vintage year? Are they still deploying capital? What is their investment due diligence process? Do they have other investments in the sector? Sometimes the age of the VC plays an important role, esp. if you require follow-up financing beyond the life of the fund.

05. Network

Often underrated, a good network of partners helps with sales, recruiting, partnerships, and other opportunities. Networks play an important role in the venture capital ecosystem by enhancing collaboration, improving access to investment opportunities, and providing essential support to entrepreneurs and their companies. The collective power of these networks not only drives innovation but also contributes significantly to the overall success of the venture capital industry. By fostering strong relationships and engaging with various stakeholders, venture capitalists can position themselves and their portfolio companies for greater success in the marketplace.

06. Reputation and References

A VC’s reputation in the startup ecosystem can be a strong indicator of their value-add and reliability. While it is important to speak to their founders and others who have worked with the VC to gain insight into their working style, supportiveness during tough times, and overall partnership approach, trust your gut. Also, the Internet can be tricky; ask intelligent questions, understand people, their intentions, and most importantly, read between the lines. 

07. Governance and Decision-Making Process

Every VC has a unique management style. Understanding how quickly and transparently a VC makes decisions can save valuable time. Some firms have lengthy approval processes, while others are more agile. Ask about their due diligence process, timeline, and who needs to sign off on investments.

08. Support During Downturns

The true test of a VC is not only how they act during good times, but how they support founders when challenges arise. Inquire about their approach during difficult phases – do they double down on their commitment, or do they pull back?

Also, read Ms. Desai’s blog: How should Entrepreneurs approach fund raising? Brand or NO BRAND? for more insights.

Qualities VCs Look for in a Company?

 

Venture Capitalists are known to invest in unicorns that prove to be home run for their LPs, but that depends on many factors like valuation, deal terms, market timing, etc. In any case here are a few basic things VCs look for while investing:     

1. Technology

An innovation changes the way an existing industry functions, also helps establish a new market and value network, displacing an earlier technology or a way of doing business. Is there a problem within the industry? What problem are you solving? How can your technology add value to that process? 

2. Revenue Model

Great ideas/technology needs to be backed by a solid revenue model in order to attract customers as well as attain profitability for the company to be an attractive investment opportunity for a VC. Can that technology be converted into a profit-making product?

3. Industry Analysis & Competitive Landscape

A startup needs an ecosystem to thrive upon; thus, it is very important for a company to understand the market dynamics, its impact on their industry, product, and also have a good understanding of the competitive landscape in order to achieve long-term success. A creative technology needs to scale, and a thorough analysis helps gauge those risks and rewards. Is there a product-market fit? Is there traction in the form of early customer validation and signs of success?

4. Entrepreneur / Team

At NIN Ventures, we start with the captain of the ship; as entrepreneurs build companies and not the other way around. Some of the qualities VCs look for in an entrepreneur are the ability to dream big with ideas that scale, certain personality traits, and work ethics like being focused, disciplined, and hard working. It’s essential to have industry expertise and knowledge, or surround yourself with people who complement you. However, the flexibility and choices an entrepreneur / the team makes determine the future of the company.

5. Financials & Execution Strategy

An amazing entrepreneur with a creative technology, a solid revenue model, and a good knowledge of the competitive landscape goes to vain, if the company does not communicate effectively or has a good execution strategy. Having a clear financial plan, understanding of metrics i.e. growth and burn rates, is a bonus.

 

 

 

Qualities VCs look for in a Founder?

The success of any venture fund depends on its ability to bet on winners in the market. As of 2025, there are more than 70,000 startups in the United States. So how do we (or VCs) pick whom to back? While there is no secret formula for success, a lot depends on the fund strategy, market timing, network, etc. At NIN Ventures, we start with a Founder (or Entrepreneur). Winners are backed by a clear vision and the qualities of their Founder. Here are the few things VCs look for in a Founder. 

Ms. Desai at various Startup Competitions, Panels, Universities, etc.

1. Dream Big with Ideas that Scale

It’s no secret that VCs are looking to drive massive revenue. That massive revenue often comes from a viable business model. However, it all starts with a clear purpose to build and sell products and services that are going to touch millions of lives by the introduction of a creative technology that is industry defining, which will eventually build a company that is going to stand the test of time. A Founder must have a clear vision, a purpose, and the ability to dream big in order to achieve that objective.

2. Personality Traits

How hard and long will a Founder work to make this dream a reality and their business a success? The Founder is typically the best sales person in the company. With that in mind, can the Founder effectively communicate his or her ideas? Or do they lack focus? Are they easily distracted or highly disciplined? How effective they are is often driven by how focused and how dedicated they are to ensure combined success. Moral compass and trustworthiness are non-negotiable, especially when it comes to integrity and ethics. Great Founders don’t just build companies; they inspire teams, pivot through crises, and create cultures that attract top talent and investors alike.

3. Industry Expertise and Specific Knowledge

Growing an idea into a large-scale sustainable business requires more than just grit and hard work - it requires specific knowledge of the industry, which sometimes comes with years of experience or sometimes lack of it. What choices need to be made to help the company grow substantially? The Founder will be driving many of the decisions, so what are the right choices for the company? What’s their basic education? Is it related to the field that they are working in? While some industries require both expertise and experience, there are some that don’t require as much experience, in those cases do they have a track record of innovation when they don’t have the years of experience under their belt? These are all things to keep in mind, but this is all relative on an individual/situational basis.

4. Adaptability

Circumstances change all the time. What is working today may not work tomorrow. How well can you adapt? Are they problem solvers? Founders need to be ready and open to constant change. When listening to the pitch, for example, how do they respond to curveball questions? VC firms want to know how well you respond to “What if” scenarios. Do you have a vision for how to respond to unique challenges in your industry? If you can’t adapt, your business will not succeed. Therefore, it’s important for VC firms to clearly understand how adaptable a Founder and their team is.

5. Choices

Life is about choice and your business is shaped by the choices you and your management team make. People are what make every business unique — even two businesses operating in the same space. In the early stages, however, it’s difficult to predict what choices a Founder will make, so VC firms may evaluate the choices that have been made. A key choice every Founder makes is his or her management team. Strong managers hire well to address the strategic areas of a growing company’s needs. They set aside ego and look for people who are better than them in some meaningful way. There is no such thing as a single perfect Founder that can handle any given situation. However, there are strong teams that come awfully close. Also, how has the management team used their limited resources up until now? Have they burned through cash like there was no tomorrow in the hopes of finding more, or have they deliberately managed cash flow in ways that directly influenced positive growth?

While not specifically a quality that most VC firms seek out, it helps to have a Socially Responsible business. Doing well by doing good is not only good business – it serves better in the long term as well. Long-term, one needs a business model that applies to the industry they serve, and the fact that it has a positive impact on the world is a bonus that will make the market of the product or service widely acceptable. There are many examples of Founders who have survived and thrived by making the world a better place. Those are the winners and companies that have stood the test of time.

Invest like a Pro with Crowdfunding

 

It’s beginning of the New Year 2026 and many people are in the process of reevaluating their portfolios. A typical investment portfolio includes – stocks, bonds, mutual funds, money market, etc., which is a short sighted approach of looking at the world of investments. E.g. University Endowment Funds (Harvard, Yale, Stanford, MIT, etc.), which take a long term approach and invest in alternatives like: venture capital. 

Currently, Harvard is the largest endowment fund in the U.S. The return on the endowment in FY 2025 was 11.9%, valuing it (after the impact of distributions from the endowment for operations, and the addition of new gifts during the year) at $56.9 billion. Their unique investment approach is that, “the true test of any endowment lies in its ability to generate value beyond market returns.”

Historically, if you look at S&P 500 and USVC Index, USVC Index tend to outperform S&P 500 and they also have any inverse relationship. However, recently the public markets have been outperforming the USVC Index short term and is only slightly higher than S&P 500 in the long run for the most part. Since 2015/6 to 2024/5, Harvard has increased its asset allocation in Private Equity from 20% to 41%, with 14% Venture Capital and 10% Growth Venture as of June 30, 2025. Then what is the reason behind Harvard’s current strategy?

According to JP. Morgan, “The outperformance of public markets is unlikely to persist, and we expect the liquidity premium to return, but it is increasingly important to seek out managers with the ability to outperform consistently by adding meaningful alpha.” So is diversifying to alternatives the answer? What is moving the needle in the alternatives space? Is Crowdfunded Venture Capital an asset class within your reach? What should the crowd be investing in?

Please follow Ms. Desai to learn more..

Note: This is not financial guidance. While it is important to have a diversified portfolio, please consider if you are looking for income, capital preservation or growth? Along the way, how tolerant are you of volatility or risk-averse? And is liquidity a concern? The answers to those questions inform allocation decisions, within both traditional and alternative assets. Please note we may offer investment products that invest in the asset class(es) or industries included in this blog.

References:

JP. Morgan: 2026 Year-Ahead Investment Outlook.pdf

Cambridge Associates: 2025-07-US-PE-VC-Benchmark-Commentary-CY-2024-PUBLIC.pdf

Harvard Endowment Reports: harvard_ar_11_12016_final.pdf and Financial Report - FISCAL YEAR 2025

Other related blog post: Investing:101 with NIN.VC ~ NIN Ventures Blog

 

 

Democratizing Venture Capital: Crowdfunding for All

 

Venture capital provides financing to early-stage emerging companies with high growth potential in exchange for equity / an ownership stake. The risks VCs take investing in these innovative technologies with business models yield higher returns their limited partners (or investors) require. As these companies grow, they create employment / jobs and the economy prospers. A typical LP base in a venture fund would be institutions, pension funds, endowments, family offices, etc. Alternatively, Crowdfunding allows “accredited investors” to invest in a Venture Fund. However, let’s visualize a future where if Crowdfunding was made available to all and understand the importance for this change?

Watch Ms. Desai to learn more about Crowdfunding

There are four main pieces in the Venture business: The Fund, the Investors, the GP (or fund manager), and the Entrepreneurs (or Companies).  In an ideal scenario where a Crowdfunded Venture Capital Fund is available to all, anyone can invest in a fund with any amount. This gives investors genuine freedom – the ability to pick a fund and also the fund manager(s) of their choice based on their personal investment strategies. This transformative approach will not only prove to be a fair process, but it will also give the investors an opportunity to eliminate the middlemen (E.g. the pension fund managers and their management fees, etc.), which will not only generate higher returns, but also help in taking control of their financial decisions. Direct investing also works in the favor of the GP(s), as it not only provides them with ease of doing business, but also gives them more time to focus on identifying, evaluating, financing, monitoring investments, and maneuvering exits strategies among other things.

Currently, in order to raise a Crowdfunded Venture Capital Fund using general solicitation and general advertising, which is permitted by Rule 506(c) as contemplated by Title II of the JOBS Act & Regulation D of the U.S. Securities Act of 1933, one is restricted to 250 accredited investors and a maximum fund size of $12 million. Other alternative is raising a parallel fund, which doubles cost and the time spent managing multiple funds. E.g. NIN Ventures Technology (QP) Fund. Not only that, the GP is also responsible to make sure, all investors are verified by the issuer who must take reasonable steps to confirm purchasers accredited (SEC.gov | Accredited Investors) investor status. However, an investment in a venture fund is diversified, which makes it less averse compared to other crowdfunding options available in the market currently?

Given the current restrictions, most Crowdfunded Venture Funds are capped at a size where they are restricted to invest in certain sectors that require smaller checks in order for them to maintain a board seat. This also does not align with the current investment trends in the market for 2026, E.g. AI, 3D Printing, Industry 4.0, Robotics, Space Technology, etc., which are high capital-intensive businesses that are reshaping the technological landscape. Restricting innovation and access of good quality deal flow to only traditional venture capital funds, may be in a way doing disservice to the general public or Crowdfunding investors.

When a similar crisis was experienced in 2013, and the JOBS Act was introduced to increase startup funding and employment for better economic growth. However, given the current market sentiments and technological landscape, the flaws, concerns, and red flags raised by Ms. Desai have become more obvious. Follow Ms. Nin Desai on X: "Last time we saw a dip in venture fund raising activity was in 2013. No new funds means less startup funding, low employment, and slow economic growth." / X and stay updated. According to PitchBook, only $45.7 billion was raised by 376 venture funds in Q1-Q3 2025 in the U.S. Read Democratizing VC: Is Now the Time for Crowdfunding 2.0? for more on this topic. Perhaps it’s time to revisit the JOBS Act, its investor eligibility without a minimum investment amount or number of investors to truly democratize venture capital and avoid another financial meltdown in the Economy at the same time?

In a world where 99% of startups fail and in order to save the everyday investor from making more poor investment choices, the laws for the Crowdfunding industry needs to be reevaluated. Freedom comes with a price, but why should only investors pay that price every time? May be its time to put the right kind of pressure on the GPs, by making sure they have the right background or licenses to enter the industry, more skin in the game, increased transparency with frequent audited reports, valuation expectations, and risk assessment. The last piece of this puzzle are the Entrepreneurs. While crowdfunding portals allow direct investment in companies, they often lose out on a qualified candidate when it comes to a board seat, which is one of the key elements when it comes to corporate governance. A larger check can solve this issue and give people a say and confidence they need in order back the right management along with access to good quality deal flow.

While the concerns SEC and other members of the government share still hold valid, it is high time to give Crowdfunding another look. A hybrid model of a Crowdfunded Venture Capital Fund works best in this current economic environment, which gives people the freedom to invest in a fund of their choice with minimum restrictions.

Thank you for your time and interest! Please post comments here and let us know of your thoughts on www.nindesai.com

Democratizing VC: Is Now the Time for Crowdfunding 2.0?

 

According to PitchBook, “US VC fundraising remained subdued as the liquidity drought continued to weigh on LP sentiment.” Only $45.7 billion was raised by 376 funds in Q1- Q3 2025. This has been the trend since the pandemic boom, where $224.6 billion was raised by 1.776 funds in 2022. Venture is a cyclical business, although every business cycle is different, historical analysis suggests that the rhythm of cyclical fluctuations in the economy tends to follow similar pattern. Last time we saw a dip in venture fund raising activity was in 2013. 

The 2008 Financial Meltdown led to a liquidity crises for Entrepreneurs, Companies, LPs, VCs, and everyone. Fewer IPOs in the market means no exits for VCs, no returns for LPs, and as a result venture funds were on a decline. No new funds means less startup funding, low employment, and slow economic growth. Thus on April 5, 2012, President Obama signed, The Jumpstart Our Business Startups Act (the JOBS Act), which enables Crowdfunding for Americans. 

Watch to learn more about the JOBS Act? Why crowdfund NIN Ventures?

However, is the dip different this time around? There is a record $311.2 billion of dry power in 2025. One-third of today’s dry powder stems from funds raised during the pandemic-era boom, and GPs have continued to reserve more capital for follow-ons and portfolio support. In 2024, 30 firms raised 75% of all capital raised by VC funds in the US with majority of them investing in AI. While AI-driven enthusiasm has lifted sentiment, it has yet to accelerate deployment. Also, what about other non-AI startups? Without a rebound in distributions, fundraising conditions are likely to remain challenging for most managers into 2026. So what does this tell us about the future of startup funding? Is it time to give another look at Crowdfunding?

The best time to Crowdfund was 2013-2015.

The second best time is NOW!

References:

PitchBook, q3-2025-pitchbook-nvca-venture-monitor.pdf

Fidelity Investments, The business cycle approach to asset allocation White Paper

Grok, X