Investors

Investments are made in promising early-stage companies who use the capital to fuel and support growth. As those companies scale, the investment grows in value. The increase in value is categorized as unrealized gains. Successful companies are eventually acquired or become a public company through an Initial Public Offering (IPO). This is known as an “Exit,” which results in a liquidity event. A successful Exit will return the investors’ original capital plus a profit proportionate to their equity stake in the company or Fund. The returns are described as realized gains or return on capital.

Returns – Historically, venture capital has out-performed the S&P 500. An investment in a private company before it goes public has the potential to generate much larger returns than an investment in the same company after it is publicly traded.

Diversification – As an alternative asset class, venture investments are not directly correlated to the stock market. By nature, a diversified portfolio is a less risky portfolio.

Impact – Investing in early-stage, novel companies and ideas provides an opportunity to directly contribute to companies that are addressing the challenges in society, improving lives, and increasing productivity. It’s an opportunity to help shape the future by investing in technologies, products, and people you believe in.

An accredited investor, in the context of a natural person, includes anyone who:

• earned income that exceeded $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the prior two years, and reasonably expects the same for the current year, OR
• has a net worth over $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person’s primary residence), OR
• holds in good standing a Series 7, 65, or 82 license.

• UCN typically charges an amount equivalent to 1% per year for the life of the fund, anticipated to be 10 years. The fund collects a 10% fee upfront which is paid to UCN to cover expenses and management of the fund.
• Profit sharing follows a “Fund Carry” model. After 100% of the investors’ capital is returned, including the fees, the profits are shared 80/20 (80% to the investors and 20% to UCN). We reduce our carry to 10% (90/10) for Fund of Funds investments. There are additional pass-through fees and carry directly from the VC Funds included in Fund of Funds.
• Example:
  • UCN raises $1M
  • You invest $10K
  • Your share of the fund is 1% (10K/1M)
  • The fund invests $200K each in 5 Portfolio Companies
  • Portfolio Company A returns 3x ($600K)
  • Your return from Company A is $6K (1% of $600K); UCN gets $0 because the fund has not yet returned the original raise of $1M.
  • Portfolio Company B returns 4x ($800K); The total fund return is now $1.4M; Profit sharing kicks in.
  • Your return from Company B is $4K (the remainder of your original investment) plus $3,200 (80% of profits); UCN gets $800.

Yes. UCN will send out K-1s annually. However, you should plan on filing an extension every year. Our funds consist of multiple portfolio companies that often require financial audits. The flow down of information following an audit add additional processing time. UCN is not able to issue investor K-1s until we receive K-1s at the fund level.