Info
CHALLENGES OF INVESTING
IN STARTUPS
Are you a future investor looking for the best way to start? Here are the key points you should inform yourself about before starting.
What you need to know about startup investments
- Risks associated with investing in startups
- Why invest in startups?
- Informed decision-making
- Diversification and why it matters
- Approaches to diversification
- Access to the best opportunities
RISKS ASSOCIATED WITH INVESTING IN STARTUPS
Never forget: the majority of startups fail. If you want to invest in startups, this is something you should always keep in mind. Why are startup investing so risky? Here are the main reasons why:
- Most startups fail
- Exits take time
- Startup investments are illiquid. When you’re investing in startups that money is bound for a very long time. You won’t be able to sell.
- Returns are unevenly distributed. A small number of startups generate most of the returns.
WHY SHOULD YOU INVEST IN STARTUPS?
When asking investors, 42% say that attractive financial returns is the main reason to invest in startups. People who invest in startups are very curious to learn more about new things, and startup investing is a very rewarding learning setup. Other important motivations to invest in startups are the impact on society and supporting you entrepreneurs.
INFORMED DECISION MAKING
- Thousands of startups are fundraising at any given moment.
- Dealflow: startups that cross your path vs actively screening the market.
- Primary information: Pitch deck.
- Additional research beyond the deck: market, competition, technology.
- Identifying experts to talk to.
- High upfront costs of due diligence: sunk cost fallacy.
Investor Onboarding
Discover who we are, what we offer you as an investor. We prepared this onboarding page to answer the main questions investors have when they join Verve Ventures.
ABOUT VERVE VENTURES
We founded Verve Ventures in 2010 with the ambition to become a leading European VC firm. We also wanted to make this asset class more accessible for private investors. Today, we invest around EUR 50 million on a yearly basis. This puts us in the league of the top 10% most active VCs in Europe.
WHAT DOES VERVE VENTURES OFFER TO YOU?
At Verve Ventures, we provide you with professionally sourced and structured startup investment opportunities. For each startup we present, you decide whether or not you want to invest. With this freedom of choice and a minimum investment amount of 10’000 per startup, you can build your very own personalized startup portfolio over time.
IN WHAT KIND OF STARTUPS CAN I INVEST VIA VERVE VENTURES?
Each year we showcase between 40 and 60 technology driven startups to our investors. The financing rounds typically range from early stage rounds (Seed, Series A) to growth-stage rounds (Series B and later). So you will see companies that are still quite early and others that already generate multi-million revenues.
WHAT SETS VERVE VENTURES APART FROM A BUSINESS ANGEL CLUB OR A VC FUND?
We see ourselves as a hybrid between a VC fund and a business angel club that combines the best elements of both. We combine the professional selection and due diligence of a VC fund with the deal-by-deal approach of a business angel club.
HOW WE FIND THE BEST STARTUPS WHICH ARE PRESENTED TO YOU
For us a great Venture Capital investment consists of two components. A startup with a strong core technology, a great team, a convincing business model and a clear exit strategy. As well as an attractive financing round with reliable co-investors and favorable investment terms.
DUE DILIGENCE: HOW WE SELECT THE BEST STARTUPS
The assessment of the startups goes hand in hand with the analysis of the financing terms and the structure of the specific financing round. We aim to invest alongside other trusted VC companies and strategic investors to make sure that you can participate in the most competitive VC deals.
HOW DOES THE INVESTMENT PLATFORM WORK?
Every investment proposal is structured the same way and is based on our in-depth analysis of each startup. The aim is make it as easy as possible for you to reach an informed investment decision. Whenever we launch a new financing round we notify you via email.
WHAT IS THE VERVE VENTURES BUSINESS MODEL? DO YOU CHARGE A FEE?
As an investor via Verve Ventures, you pay no membership fees, no up front due diligence fees and are not required to commit capital upfront. All deal sourcing and due diligence work is financed by Verve Ventures. If you decide to invest, we charge a one-off access fee, a yearly management fee over 5 years and a fee to cover expenses related to the investment structure.
WHY DO I NEED TO BE ACCREDITED FIRST? WHO CAN INVEST VIA VERVE VENTURES?
In the accreditation process, we ask you to faithfully indicate your net assets to check if you qualify as a “professional investor”. If you do, we grant you immediate access to our current investment opportunities. Of course, we keep such information highly confidential.
DO I INVEST DIRECTLY INTO THE CAP TABLE OF A STARTUP? DO YOU USE A SPV?
Whenever you make an investment via us, you do not become a direct shareholder of the startup. Instead we pool all of our investors in our fiduciary structure. This is a common investment mechanism where a fiduciary holds the legal title to shares on behalf of its minority investors and while the voting rights are delegated to the fiduciary, all economic rights remain with the investors.
Media
Verve Ventures is a network and technology-driven venture capital firm based in Switzerland. The company was founded in 2010 by Steffen Wagner and Lukas Weber. Verve Ventures has grown to around 40 team members in Zurich, Berlin and Paris.
Get in touch with us
Eugen Stamm
Phone: +41 78 744 98 82
Email
If you are a journalist looking for more information, please contact us. We’re happy to help and connect you with our experts.
About Verve Ventures
We invest in startups across Europe from Seed stage onward, in software, hardware and healthcare. With a portfolio of more than 140 startups and around 10-20 new investments per year, Verve Ventures is one of Europe’s most active startup investors.
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