The US market of high net worth investors is substantial and largely untapped still. Around nine million households qualify as high net worth, based on the SEC definition of having an individual or joint net worth exceeding $1,000,000 (excluding equity in a primary residence). Yet, only 3% of those households currently invest in alternatives.
In a previous post, Michael Raneri addressed the chicken and egg challenge associated with building a marketplace. To address this at Venovate Marketplace, we have signed partnerships with some of the top trust companies and 3rd party custodians, including Provident, Millennium, Kingdom, New Direction, Next Generation, and Entrust. These partnerships permit us to market Venovate Marketplace to their clients, many of which are accredited investors.
That is why we believe that, if you are a quality alternative investment fund or private company looking to raise funding, you should consider listing your investment opportunity on the Venovate Marketplace platform. We offer solutions for fundraising, investor relationship management, and liquidity, all in one place.
Don’t just take my word for it, of course.
We recently conducted a survey of investors and issuers who have already signed up for the Beta of Venovate Marketplace. Many of these early adopters are clients of the partners discussed above. Based on their feedback, we created a top ten of reasons why funds and private companies should list their investment opportunities on Venovate.
1) Venovate provides access to a large pool of verified accredited investors
It is not surprising that “access to a large pool of verified investors” was mentioned by 100% of fund managers and 94% of companies as a key reason they plan to use Venovate Marketplace. Venovate provides fundraisers access to accredited investors who will be verified by Venovate in line with the newly published SEC rules.
Together, our partnerships give Venovate access to a client base totaling over 330,000 investor accounts with over $17B in assets under administration. That is a vey promising start, especially because we believe that these clients have 5-10x more capital outside of those investor accounts with our partners.
2) Investors form the overwhelming majority among Venovate Beta sign ups
Of the first group of Venovate Marketplace Beta sign ups, over 80% indicated to primarily invest, or to both fundraise and invest.
3) Investors on Venovate are no rookies
83% of investors who signed up for Venovate Marketplace have experience with investing in alternatives during the past ten years. 42% of them have participated in four or more alternative investments during that time. Clearly, the Venovate audience is made up of experienced investors who know what they are doing.
4) Investors on Venovate will continue to invest in alternatives
85% of investors at Venovate Marketplace are targeting an alternative investment exposure greater than 5%, and a 70% majority of investors are targeting an allocation to alternatives between 5% and 30%. Conclusions: Investors on Venovate want to hear about your opportunities.
5) Investors on Venovate expect high quality, vetted opportunities
When asked how they expect Venovate to make the investment process for alternatives better, 87% of investors felt strongly about “verifying credibility of the issuers” and “providing comprehensive due diligence.”
These investors are not looking at Venovate Marketplace as a platform for casual crowdfunding. They don’t want us to show them opportunities from issuers who are not yet ready. They expect us to conduct due diligence, and provide transparency and standardization of our listing standards. We plan to do just that. If an investment opportunity doesn’t meet our standards, we won’t list it.
6) Investors on Venovate want a true marketplace
78% of investors valued “access to many different kinds of listings in one place” and “offering a fast and efficient investment process”. These are both important features of a true marketplace – a wide variety of offerings and an efficient transaction process. These key elements are sorely lacking in the current investing process for alternatives, and Venovate Marketplace is designed to fill that gap.
7) Investors on Venovate consider the full range of investment objectives
When asked what their main objective was for investing in alternatives, 75% of our investor sign ups cited growth, 57% added income, and 30% picked capital preservation. Obviously, many had more than one objective. These investors are not just speculators – they want to consider the full range of investment opportunities to meet their investment objectives as they change over time.
8) Investors on Venovate are interested in all alternatives, but some stood out
Investors noted significant interest in participating across all alternative asset classes, but the most attractive were real estate (59%), private equity funds (40%), early stage private companies (40%), energy (38%), natural resources (27%), and late stage private companies (27%). Again, most investors indicated interest in multiple asset classes.
9) Issuers want to simplify shareholder management
Over 40% of issuers felt strongly about the value of cost-effectively managing the transaction process and providing investor relations tools to their investors. We heard from fund managers that they would like to have a system to expose to their current investors and that provides access to their records and updated investment information. These features are an integral part of our platform architecture.
10) Liquidity is more important to funds than companies
We were a bit surprised to hear that alternative funds and private companies had different views of liquidity – with 44% of funds looking to utilize it and only 12% of private companies interested in providing it to shareholders. Either way, Venovate Marketplace plans on helping all issuers, both funds and private companies, with liquidity needs in the future.
If these findings spark your interest in joining Venovate Marketplace, please sign up for our exclusive Beta. If you have an investment opportunity in an alternative fund or private company you’d like to list, please email us at email@example.com.
We are looking forward to hear from you.