Democratize Venture Capital with NIN.VC

NIN Ventures (or NIN.VC) is a unique and first of its kind crowdfunded technology venture capital fund for accredited investors who can invest in the NIN Ventures Technology (QP) Fund with a minimum amount of $100,000 using multiple investment options like self-directed IRAs, Defined benefit plan, digital currencies (E.g. Bitcoin, Litecoin, Dogecoin), or a regular checking / savings account. NIN Ventures invests in early / growth stage 3D printing, the 4th industrial revolution, cloud computing, virtual reality, financial services, education software, and other disruptive technology companies.

HOW IS NIN.VC DIFFERENT AND / OR BETTER THAN CROWDFUNDING PORTALS AND TRADITIONAL VENTURE FUNDS?

The 2008 Financial Meltdown led to a liquidity crises for companies, entrepreneurs, LPs, and VCs. Fewer IPOs means no exits for VCs, no returns for LPs, and as a result venture funds were on a decline. No new funding means less startup funding, low employment, and slow economic growth. To avoid this, the JOBS Act was introduced in 2012, which enables companies to crowdfund from accredited (and now even non-accredited investors).

However, there is a major flaw and that is what NIN.VC is solving. I come from an entrepreneurial family so I can speak on their behalf. Entrepreneurs are brave and courageous bunch that are determined to change the way an existing industry functions. On that journey they need lot more than just financing. They need guidance or domain expertise, help with PR/marketing, recruiting, viable exit strategy, more often follow up financing, etc., which crowdfunding portals are not able to support.

On the other hand crowdfunding exposed investors to a whole new asset class, which the normal population never had the knowledge or expertise to invest in. About 99% of startups fail, on top of that low minimum investments like $1,000 does not give them a say or a board seat, putting investors at high degree of risk.

At NIN.VC we solved all of those issues. NIN.VC provides diversification, we take board seat on all our investments and lend the necessary support that an entrepreneur needs to build a business, like they would get at a traditional venture capital fund. And the most IMPORTANT part that investors cares about is the ability to direct invest and enjoy direct returns, which is not the case with a traditional venture capital fund.

NIN.VC has the best of both worlds. We’re a hybrid between a traditional venture capital fund and a crowdfunding portal. Another feature that is unique to NIN.VC is transparency. Investors can attend our monthly calls, check our Facebook, Twitter, LinkedIn, etc. for more recent activities at NIN.VC. 

We would love to hear from you, please do post your comments on this blog…

*For White Paper requests email: info@nin.vc

Crowdfunding Matrix

The Crowdfunding industry has grown from $16 billion in 2014 to an estimated $34 billion in 2015. However, many still wonder, what is Crowdfunding? Crowdfunding is the practice of funding a project by raising contributions from a large number of people, typically via the Internet. The market is flooded with various types of Crowdfunding options like donation, reward, lending, equity, royalty, and even hybrid versions.

The two most popular types of Crowdfunding methods are Reward and Equity. For Rewards based Crowdfunding, entrepreneurs pre-sell a product or service to launch a business, and some times even in return for gifts or thank you notes. E.g. Pebble Technology Corporation used Kickstarter to raise $10.3 million in order to develop the Pebble smart watch and pre-sold it to contributors.

For Equity Crowdfunding, the backer receives share of a company, usually in exchange of the money pledged. E.g. Neil Young used Crowdfunder to raise over $6 million in order to continue development on PonoMusic. In case of NIN.VC, it would be limited partner interest in the NIN Ventures Technology (QP) Fund.

So what is the difference between direct investing in a company using a Crowdfunding portal and NIN.VC?

01. Diversification

As a fund NIN Ventures Technology (QP) Fund makes multiple investments in companies in different sectors (i.e. 3D Printing, Cloud Computing, Education Software, etc.) during Series A and / or B financing, this strategy helps diversify the fund’s portfolio, which is not the case when one invests in a company directly. Think of it as investing in a Mutual Fund vs. Stock.

02. Low Risk

Given the diverse portfolio the fund reduces it’s risk, where as direct investing in a company exposes that investment to higher degree of risk, an appropriate analogy would be to put all your eggs in one basket.

A logical follow up argument would be, what if one makes multiple direct investments in companies of their choice using a Crowdfunding portal over investing in NIN.VC? Given 90% of the startups fail, even if one invests in several companies via a Crowdfunding portal, it becomes solely a numbers game i.e. Quantity over Quality. On the other hand the fund management invests in an Entrepreneur because Entrepreneurs build companies and not the other way round. We (NIN.VC or any venture fund) not only provide adequate financing (including follow up financing rounds and access to our syndicate partners), but also lend our domain expertise and network of partners to help companies with recruitment, PR and marketing, and a viable exit strategy. 

03. Professional Management

Direct investing in a company requires time, expertise, due diligence, constant follow up and / or monitoring. On the other hand NIN.VC acts like a financial advisor and works for the investor and in the fund’s best interest. The fund also provides quarterly audited financial statements to the investor on the progress at the fund.

04. Board Representation

A $1,000 direct investment in a company using a Crowdfunding portal does not give an individual enough rights, while as a fund we take board seat on all our investments. Thus we are in the loop with the company management when it comes to keeping tabs on the progress at the company and are in a position to help / make suggestions on several occasions. And also in a position to gauge and be a part of the valuation process when it comes to addressing dilution and follow up financing rounds. 

05. Liquidity at Exit

When one invests in the NIN Ventures Technology (QP) Fund, they are locked in with the fund and the management for a good 10 (+2) years. Redemptions are extremely rare and liquidity happens as and when the fund makes an exit in a company via an IPO or M&A transaction. On the other hand direct investment in a company can be offered in the secondary market for a transfer of ownership, but valuation, timing, and the choice of investment will dictate that transaction.

Five Reasons to Invest Digital Currency

In January 2015, NIN Ventures let Bitcoin owners attain liquidity via SnapCard in return for investment in the NIN Ventures Technology (QP) Fund. Given the popularity of that initiative and the momentum behind other digital currencies, we have now opened doors for Litecoin and Dogecoin owners to invest in NIN.VC.

Bitcoin is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence. Bitcoins current market capitalization is approximately $ 3.31 billion.1

Litecoin is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license and inspired by Bitcoin. Litecoin differs from Bitcoin in aspects like faster block generation rate and uses a proof of work scheme. Litecoin has a current market capitalization of approximately $ 57.17 million.2

Dogecoin is a peer-to-peer open source digital currency and falls under the category of altcoins. Dogecoin is scrypt based (i.e. based on a password key) and enables fast payment to anyone across the globe. Dogecoin has a current market capitalization is approximately $ 13.33 million.3

So why should digital currency owners invest?

Digital Currency Instability

Bitcoin has plummeted about 80% in value since its peak just over a year ago and has been gradually declining ever since. At it’s peak on November 30, 2013 the price of Bitcoin was roughly $ 1,124.76 and on May 19, 2015 the price was $ 232.79.4

At its peak on December 4, 2013, the price of Litecoin was $ 39.59 and on May 19, 2015 the price had dropped to $ 1.45, which is a 96% decrease in value.  Litecoin is also gradually declining in value given it is highly influenced by Bitcoin.5

At its peak on January 21, 2014, the price of one DogeCoin was $ 0.0019. A year later on May 19, 2015, the price was $ 0.0001, which shows a 94% decrease in value, as it follows Bitcoin and Litecoin.6

Liquidity

There are many vendors that accept Digital Currency eg. Target, Apple, Tesla, but NIN Ventures is a unique opportunity for them to invest or attain liquidity instead of just spending it.

Tap into Venture Capital 

Investing in Venture Capital means investing in groundbreaking technologies that have tremendous growth / return opportunities. Traditionally, venture capital had been the domain of the wealthy and institutions but with NIN.VC digital currency owners can now tap into the venture capital asset class with a low minimum of $ 100,000.

Return on Investment

All digital currencies experience a high degree of fluctuation, thus investing your digital currency can result in a higher degree of stability and / or returns. An individual's traditional portfolio consists of stocks and bonds. Historically, if you look at United States Venture Capital Index and S&P 500 you will notice the USVC Index tends to outperform the S&P 500 and they also have an inverse relationship. Thus adding venture capital to ones portfolio will help mitigate that risk and yield higher returns.

Diversification     

Harvard & Yale are the biggest and best performing Endowment Funds. Their long-term approach and investments in alternatives (e.g. Venture Capital) allow them to achieve true diversification and help mitigate the risk involved in having only a stock-bond or digital currency portfolio. With NIN.VC digital currency owners can now invest like Harvard and Yale.8

     To invest in NIN Ventures using Bitcoin, Litecoin, or Dogecoin via SnapCard, one must first sign up on http://www.nin.vc and verify accreditation. The next step is to complete the subscription documents, then select payment with SnapCard and the type of currency i.e. Bitcoin, Litecoin, or Dogecoin. Given the daily fluctuations in digital currency pricing, the settlement price will be based on the day of the initial / final close of the fund.

1  Market Cap, Cryptocoincharts.info

2  Market Cap, Cryptocoincharts.info
3  Market Cap, Coinmarketcap.com
4  Historical and Closing Price as of May 19, 2015, Cryptocoincharts.info

5  Historical and Closing Price as of May 19, 2015, Cryptocoincharts.info   

6  Historical and Closing Price as of May 19, 2015, Coinmarketcap.com

⁷  Cambridge Associates LLC, Dow Jones Indices, Standard & Poor’s, and Thomson Reuters Datastream. The Cambridge Associates LLC U.S Venture Capital Index is an end-to- end calculation based on data compiled from 1,420 U.S. venture capital  funds, including fully liquidated partnership, formed between 1981 and 2012. 

⁸ Harvard and Yale 2008-2013 Endowment Report

How to Invest in NIN.VC?

NIN.VC INTRODUCTION

NIN Ventures (or NIN.VC) is a first-of-its-kind technology venture capital fund to be raised via World Wide Web. NIN.VC will invest in early / growth stage financial services, education software,  internet and digital media, mobile communication, cloud computing, 3D printing, and other path breaking companies. The fund will invest $1,000,000 - $5,000,000 in early / growth stage companies as a part of a syndicate or lead. 

HOW TO INVEST IN NIN.VC?

STEP 1: Log on to www.nin.vc and watch our introduction videos. 

STEP 2: To (1) SIGN UP, enter your first and last name, email address, and acknowledge that you are an accredited investor. Once you are signed in, you will get access to marketing materials and events. The (2) MARKETING MATERIALS page includes our Private Placement Memorandum and Investor Presentation to help you learn more about our fund. You will also get access to our (3) EVENTS and you would able to (4) SCHEDULE APPOINTMENTS with our investment team for one-on-one meetings. After carefully reading the marketing materials, click the (5) INVEST WITH US button to start your investment process.

(1) SIGN UP

 (2) MARKETING MATERIALS  

(3) EVENTS

  

   

(4) SCHEDULE APPOINTMENT

STEP 3: The INVEST WITH US button will direct you to our RISK & DISCLOSURE statement. An investor must accept the RISK & DISCLOSURE statement that explains Venture Capital investing and the risks associated with it prior to proceeding. After carefully reading the Risk and Disclosure statement, click the “I agree” to begin your Accreditation process.

STEP 4: Select the appropriate Accreditation form for (1) INDIVIDUAL OR (2) ENTITY. Complete the form and upload satisfactory supporting documents (in PDF format).

(1) INDIVIDUAL

(2) ENTITY

STEP 5: Please download, read, complete, sign and then upload the SUBSCRIPTION AGREEMENT and W9. Proceed to the online payment process.

STEP 6:  There are multiple ways of investing in NIN Ventures Technology (QP) Fund. A. Checking/Savings account B. Defined Benefit Plan C. Self-Directed IRA D. Pay with SnapCard (Bitcoin).

(A) CHECKING/ SAVINGS

Fill out banking information and payment amount (minimum $100,000).

(B) DEFINED BENEFIT PLAN (RSW)

A Defined Benefit Plan is a retirement plan that can invest in a wide range of securities and investment products including venture funds. All contributions made to this plan and subsequently are top line tax deduction for the business whether it is a sole proprietorship, an LLC, an LLP, a P.C., a C Corp. or an S. Corp. The investment growth is also tax deferred under the umbrella of the Defined Benefit Plan. For this purpose NIN Ventures is working closely with Robin S. Weingast & Associates (or RSW). RSW would help establish this plan using a separate account with a new plan tax id number and RSW would also prepare the legal plan trust documents. RSW will calculate the maximum contribution that could be made to the plan and then the client would invest directly in NIN Ventures as the plan’s investment.

To invest in NIN Ventures using your Defined Benefit Plan, you must first sign up to invest in NIN Ventures by visiting www.nin.vc and verify that you are an accredited investor. Next, establish a Defined Benefit Plan with Robin S. Weingast & Associates. Once the plan is established and the contribution is calculated, you can complete the subscription to the NIN Ventures Private Placement and process your payment online at www. nin.vc

(C) IRA (ENTRUST)

‘Self-directed’ is a descriptive term that is used to describe how some IRA providers administer the assets they hold. With a self-directed IRA the client controls what their IRA is invested in. Self-directed IRAs allow investors to hold ‘alternative’ assets within their tax deferred retirement plan; assets like private placement in a venture capital fund. Like any IRA investment a self-directed IRA has built in tax deferred growth and thus an individual will not pay capital gain tax on the growth of the investment. The return will flow back to the self-directed IRA and will not be taxable to the account holder. A self-directed IRA allows for true diversification that is not otherwise achievable in a standard IRA portfolio. In order to facilitate this NIN Ventures has teamed up with The Entrust Group, which will help set up an IRA with the Entrust Group and direct that investment into NIN Ventures Technology (QP) Fund. 

To invest in NIN Ventures using your IRA account, you must first sign up on www.nin.vc, begin your investment process, and verify that you are an accredited investor. Then, set up a self-directed account with The Entrust Group. After setting up and funding your self-directed IRA Account, you will be able to direct Entrust to invest in NIN Ventures. Once the investment is made, NIN Ventures will report quarterly activity to The Entrust Group, and Entrust will then update the IRA and that change in value will be reflected on your Entrust IRA statement.

(D) BITCOIN (SNAPCARD)

Bitcoin is emerging as a new form of alternative payment and a global currency. NIN Ventures understands the significance of this change and has teamed up with SnapCard to let Bitcoin owners tap into venture capital. We allow Bitcoin owners attain liquidity via SnapCard in return for investment in the NIN Ventures Technology (QP) Fund.

To invest in NIN Ventures using SnapCard, you must first sign up on www.nin.vc and verify that you are an accredited investor. The next step is to complete the subscription documents, then finally select payment using SnapCard. Given the daily fluctuations in Bitcoin pricing, the settlement price will be based on the day of the initial/final close.

Note: At the moment, NIN Ventures Technology (QP) Fund is only open to accredited US investors and entities. Dates for both initial/final close will be notified to investors in advance. The initial close will be when the fund reaches $$10 million and final close at $25 million.

STEP 7: Once you have completed the subscription process and your documents and payment are verified, you will gain access to our Fund Performance Reports.

Gateway to funding: Business Plan

The recent turmoil in the market lead to a change in the way business was done and many technology companies sprung to life. Low start up costs of these fast-growing tech companies and the heighted media coverage has created more entrepreneurs than ever. However, many fail to receive Series A and B funding, which is crucial for the growth of the company.  Why?

The first step of starting your own company is to formulate a business plan. Here are few tips on how entrepreneurs should approach a business plan.

Product / Service

Make sure your business plan clearly outlines what your business will be in the most simplistic form possible. E.g. What is Google? Google is a search engine. Whether it is a product or service, the investor also needs to know what are you trying to achieve, E.g. Uber is a better alternative to cabs, and why your business will succeed? The business plan also needs to outline the technology used, the market, competition, and a bird’s eye view from the management perspective.

Team

The team is an important asset and a company must carefully choose a team that complements its vision. With diversity in terms of broad range of skills, the team will be ready for the plethora of challenges a young company faces. The business plan should mention how the team will work together when it comes to decision-making or provide support for running the company.

Revenue Model

Technology can solve a lot of problems but how an entrepreneur plans on turning it into a business is very important. As a for-profit venture, you need to do research and work on your product, marketing strategy, and day-to-day operations to ensure maximum efficiency for revenue generation. Determine pricing models for your business and compare them to your competitors in the industry. In the business plan, you should be able to demonstrate what and how to make your business profitable.

Cash Flow Positive

Before you start your company or look for outside funding, your business plan will need to have a clear timetable for your cash flow. It’s alright to lose money in the initial stages of the business, but in order for your business to succeed, you will need to start making money at some point. This timetable needs to be included in your business plan, not only for your reference, but also as a way for investors to gauge your new company’s financial status.

Execution Strategy

A brilliant strategy can be your ticket to success, but only with execution can you get there. Execution is the small details and decisions that your business will make during its lifetime. After you have determined your business’s strategy, you and your team will need to put it into action. In your business plan, you will need to state HOW you plan on following through on your ideas. It is what your investor wants to see; while you may have the greatest product or idea in the world, without solid execution, your business will not sustain.

Work Hard Play Hard

I’m a VC

Ask and you’ll see

The fastest way to first class

Is to tee off with me

Unique Ideas

IPO like a Jet

Disruptive Companies

Is where my expertise fits

It takes a trained eye

The best shots to win

The fastest way to green

Is to project where you end

So log on and fly

To www.nin.vc

Avoid all traps of the course

We’ll keep you high on your horse

Invest in technology

Turn dreams into reality

Our IRR’s

Will make your drives go far

To keep your ball in play

Sign up on www.nin.vc Today

Special thanks to Lynn Gentry

www.lynngentryprose.com

Giving Run to Your Money: Five Things to Look for in a VC Fund

Horse racing could be considered the not-so-distant relative of venture capital. Though containing some differences, both enterprises share the common requisite of experience, evaluation, and prudence. Nearly 550,000 businesses are started each month in the United States[1]. Early-stage venture capitalists seek out the businesses with the most disruptive ideas and the highest growth potential, and as VCs become increasingly adept in doing so, the US Venture Capital Index has generally outperformed the S&P 500.

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 more investors and funds than ever, what should investors look for in a venture capital fund?

     #1. Diversification – Aside from high reward potential, one of the main reasons investors flock to venture capital is diversification. In the world of horseracing, this would be like hedging your bet; backing up a wager with a less risky one. This would look like picking a horse to win, but also betting that the horse will place. This strategy mimics the risk mitigation of portfolio diversification. If your horse falls short in the photo finish, you’ll still cash your “place” bet. While many individual investors will have their portfolio separated into stocks, bonds, and money markets, venture capital provides a new asset class. Venture capital investing can also be used to mitigate risk, as the US Venture Capital Index generally performs inversely to the S&P 500[2].

     #2. Industry – Horse races vary in length, so knowing what horse is best suited for certain races is imperative. Similarly, many venture capital funds are focused on a specific industry, such as healthcare, manufacturing, or technology.  While each industry performs well at different times, technology has consistently delivered returns above the IRR of the US Venture Capital Index[3].

     # 3. Stage – Just as VCs commonly invest in syndicates, most horses are owned in partnerships to lower individual costs and risk. Partners that join later, especially as the horse becomes more successful, will expect to see less in return. 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 have generally performed better.

     #4. Strategy – Regardless of their discipline, every successful person or group has a strategy. Every trainer has their own method for guiding horses to success, 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 and disruptive business, or one that exhibits some of all three.

     #5. Management – Is it the horse or the jockey that wins the race? No doubt that the jockey serves a vital purpose, but the race winner is ultimately determined by the horse. Of course, this really means the trainer and all those who pay for the horse’s expenses. Making an investment is like giving your horse to a trainer. You expect results in return for the money you spent. In venture capital, your trainers are usually a team of the most senior members of a firm. 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. Other facets to consider when evaluating a management team are the managers’ educations, industry experiences, and visions.

Sources:

[1]: Source: Small Business Association

[2]: Source:  Cambridge Associates LLC, Dow Jones Indices, Standard & Poor’s, and Thomson Reuters Datastream. The Cambridge Associates LLC U.S Venture Capital Index is an end-to- end calculation based on data compiled from 1,420 U.S. venture capital funds, including fully liquidated partnership, formed between 1981 and 2012.

[3]: Pooled gross IRR by company initial investment year. Based on data complied from 1,401 US venture capital funds, including fully liquidated partnerships, formed between 1981 and 2011. Returns are net of fees, expenses and carried interest. Vintage year funds formed since 2010 are too young to have produced meaningful returns. Analysis and comparison of partnership returns to benchmark statistics may be irrelevant. Benchmarks with NA (not applicable) have an insufficient number of funds in the vintage year sample to produce a meaningful return.

 * Source: March 31, 2013
   Cambridge Associates LLC
   U.S. Venture Capital Index® and Selected Benchmark Statistics