Urban Capital Network was established to make investing in venture capital opportunities available to everyone. Previously, only the wealthy and well connected had access to institutionally backed high growth investments. Our team has experienced the frustration of being passed over in the venture investment world. Instead of discouraging us, it only fueled our passion to democratize access to high growth investment opportunities for a broader pool of investors. UCN partners with top-performing venture capital firms that believe more people should have access to premium investment opportunities at affordable levels.
Driven by a shared interest in helping others, our partners have helped friends, family, and clients grow their wealth beyond traditional investments like 401K, IRAs, stocks and bonds. We transform individuals into confident investors with access to invest in high growth companies that will revolutionize the future.
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- UCN Horizon Funds are fund of funds. The Horizon funds make investments directly into 1 or more premium VC funds managed by top performing VC firms. Each of the VC funds will consist of approximately 15 – 30 portfolio companies.
- Our most diverse, de-risked, and broadest fund.
- Notable investments: Mercury Fund IV, Pegasus Tech Ventures
- UCN Boost Funds are “mini funds” that co-invest directly into venture-backed companies, alongside top performing high performing venture firms. The access to these investment opportunities is exclusive and is often a result of our Horizon Fund investments.
- 5 – 10 investments in high-growth companies.
- Notable investments: Label Insight, Televet, Liongard, Cart.com
- UCN Elevator Funds are impact focused. UCN allocates a portion of its management fees and profits to invest exclusively in minority and women founders. When possible, we extend those investment opportunities to our network through our Elevator Funds.
- 5 – 10 investments in early-stage, high-growth potential, minority-founded or co-founded companies.
- Our most affordable fund with a $5k investment minimum.
- Over $500K invested in minorities and women founders
- Notable investments: Oya, Upgrade, GigOut, Woobie, Clutch, Fundr
- UCN often gets access to rare and exclusive investment opportunities that don’t fit within one of our open funds. We launch a dedicated fund specifically for those opportunities.
- Our least diversified fund with subjective risk-reward potential.
- Notable investments: SPAC – Mercury Ecommerce Acquisition Company (NASDAQ:MEAC)
What is venture capital?
Venture Capital is an asset class that is typically accessible to only institutional investors and the ultra-wealthy due to high minimum investments, often exceeding $1M. Investors commit capital to Fund Portfolios managed by Venture Capital firms. The VC firms assess and evaluate hundreds of early-stage companies for investment consideration, seeking high-growth companies with high-return potential. Only a small percentage will qualify for an investment.
How are returns generated and realized?
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.
Why should you consider venture 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.
What is an accredited investor?
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.
What are UCN’s investment minimums?
Our investment minimums are generally under $15K.
How do fees and profit-sharing work?
- 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.
- 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.
Will I receive an annual K-1?
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.
How does UCN differ from other low minimum investment funds?
Most other funds create Special Purpose Vehicles (SPVs) to invest in one company per SPV. UCN constructs a portfolio of VC funds and VC-backed portfolio companies, so your investment is spread across many companies. This greatly reduces the risks and diversifies your investment.