Building a large portfolio of DeepTech and Impact startup matters

Investors love how Consilience Ventures takes the pain out of building a tech portfolio by minimising risk and boosting potential returns.

CAPITAL AT RISK — THIS IS NOT A FINANCIAL PROMOTION. This article is only intended to explain how Consilience Ventures works with sophisticated investors and HNWIs.

It’s tough being an early stage investor at the moment — and I’m not just talking about COVID-19. Angels, HNWIs and Family Offices that primarily invest in startups are facing familiar challenges — building a portfolio of startups large enough to mitigate risk, while not knowing who is best placed to succeed. However, as pinpointed in Ernst & Young’s Megatrends Report, fund managers are also facing pressure to find ‘new levers of value creation’, based around ‘digital strategy, purpose and transparency, and talent.’

To enable the VC market to perform more efficiently and achieve better results, we’ve created a new investment model. We have identified the challenges investors face — and through bold thinking, we’ve come up with a solution.

In this article, I’ll explain how Consilience Ventures helps investors deploy their capital with confidence.

How it works

At Consilience Ventures, we’ve created an ecosystem where startups can access, free of charge, the resource they need most to scale — expert help. Rather than cash, startups receive CVDS in exchange for equity. CVDS is the currency of the Consilience Ventures ecosystem — a tradeable portfolio-backed token that is exchangeable for cash. Startups use their CVDS to pay for services from our curated network of experts. We have experts that can help with strategy, finance, sales, marketing, compliance and much more — we cover 32 domains of expertise already.

As our portfolio of startups becomes more valuable, thanks to our experts’ help, the value of CVDS will rise. This represents an opportunity for tech investors. Rather than spending time and taking risks building a portfolio for themselves, they can invest in CVDS and take advantage of our ready-made ecosystem with:

· Collaborative deep due diligence — the startups we work with are selected by investors, as well as industry and domain experts

· No transaction fees — no fees and no carry

· Accessible for sophisticated investors and HNWIs only — Minimum ticket £25K

· Direct transactions available — Investors can also invest directly in the startups should they wish, without Consilience Ventures of CVDS involved (a standard investment with the associated pros and cons)

Here are three reasons why this model solves the problems that VC investors traditionally face:

1 — Invest like the best

As Warren Buffett memorably said in his rules for investors — “Rule №1: Never lose money. Rule №2: Never forget rule №1.”

CVDS makes it possible to not lose money, due to the size of the network that uses it. The key to de-risking your investment portfolio, according to academic Professor Claudia Zeisburger, is to make it as broad as possible. To beat 50% to 70% of VC funds, investors need a minimum of 100 startups in their portfolio — preferably something around 500. CVDS makes that happen.

The process we use to select startups to work with is designed to select only the best of the best. We bring in industry and domain expertise from our network of senior experts with real-life experience. We’ll also involve selected co-investors who have strong industry knowledge. Our selection panel have deep technical expertise, as well as experience in business and finance. Our standardised selection process produces quality analysis that is valuable to founders whether we choose to invest or not. All of this means that investors in CVDS can be confident that we are building a portfolio of winners.

Expertise is a more valuable resource than cash. Startups that join the Consilience Ventures ecosystem get access to a curated network of experts united by collective success. They hire much quicker than firms that hire in the standard way, while CV all but eliminates the risk of a bad hire. This is because while average freelancers prefer to be paid in cash, the best experts expect to be paid according to the success they help to bring. Startups that pay in CVDS have a far greater chance to access and retain the best experts without breaking the bank. All this means they have the opportunity to scale much faster than they would on their own.

CVDS is representative of the value of the entire CV ecosystem. As each startup in the portfolio has the potential to scale quickly, the value of CVDS will increase at a same rate.

2 — Mitigating risk

As I wrote in a recent Medium post that you can read here, liquidity is an essential consideration for investors. The more liquid, the better for everyone as you can realise returns and profits faster.

CVDS are tradeable in the secondary market created and maintained by Consilience Ventures Community — where only members can participate. Also, investors can exchange their equity-backed tokens for cash if they no longer want to be part of the ecosystem. This creates more liquidity and mitigates risk. There are 3 ways to release the CVDS value.

1. Receive the proceeds of a startup exit

2. Sell CVDS

3. Buy the services of a curated service provider (legal, marketing, IP etc…)

However, Consilience Ventures’ hands-on, data-driven approach to startup growth boosts the chances of success, while minimising the losses that come when startups do not achieve desired success levels.

3 — Engagement and transparency

When you become an investor in CVDS, you automatically become part of our ecosystem. This means you can personally engage with the founders of startups in our portfolio, as well as the experts driving their growth. You can even invest directly, and apply to become an expert to work with your portfolio companies in exchange for more CVDS — which increases your skin in the game.

Consilience Ventures also offers increased transparency for investors. The way our platform is built, as well as the blockchain technology behind CVDS, means you are never left in the dark. Blockchain allows for registers to be held of every transaction that takes place.

Join us

We help investors by removing the pain of building a large, diversified and vetted portfolio of B2B and deep tech startups. We also provide a curated network of experts and investors that will accelerate our startups’ growth.

CVDS offers a diversified investment vehicle that captures all the benefits of traditional VC investment, while reducing risk and boosting transparency.

It’s tailor-made for today’s investment landscape.

If you’re an investor looking to take advantage of this new model, it’s time to talk to Consilience Ventures.

Entrepreneur and Investor in early stage deep-tech Startups