Who can invest in Icehouse Ventures funds?
Our funds are currently only available to 'wholesale investors', as defined by the Financial Markets Conduct Act 2013.
What is a wholesale investor?
Wholesale investor is a term used in the Financial Markets Conduct Act 2013 to describe a person (or company, trust or partnership) that is legally allowed to invest in opportunities otherwise not available to the public or "retail" investors, like startups or venture capital funds. This restriction is designed for investors' protection. Typically investments like startups and venture capital funds are higher risk and have less information or other protective rights than those offered to the public or retail investors.
There are a number of criteria or categories used to qualify as a wholesale investor. Our investors typically qualify under one (or more) of four different options and they could be broadly described in two categories:
(1) Investors have appropriate experience to understand and accept the risks involved in the investment they are making, or
(2) Investors have sufficient wealth to either afford appropriate professional advice or to withstand the losses they could incur. The four qualifications our investors typically rely on are:
- Being a "Large Investor", where that investor (and the entities they control) owns net assets or has consolidated turnover of $5m or more in each of the last two financial years.
- Being an "Investment Business", where that investor's principal business (especially where the investor is a company) is one or more of a few categories including investing in financial products (i.e. fund managers), providing financial advice, or trading in financial products on behalf of others (i.e. brokers or wealth managers).
- Meeting "Investment Activity" criteria, where an individual is either;(1) An investor that owns or has owned in the last 2 years a portfolio of specified financial products (i.e. shares, bonds, derivatives etc) in excess of $1m in value, or (2) An individual that works in an investment business and materially participates in that business' investment decisions and has done so for at least 2 years within the last 10 years.
- Being an "Eligible Investor" where an investor has previous experience investing in financial products that is relevant to the investment they are making such that they can assess the merits and the information they need to make decisions, provide a declaration that they understand the consequences of being an eligible investor, and have that declaration confirmed by either a lawyer, accountant or financial advisor.
These descriptions are intentionally in layman's terms and should not be interpreted as advice regarding whether or not you are a wholesale investor or not. If you are unsure whether you may qualify, we recommend discussing this with your accountant or financial advisor.
What companies do Icehouse Ventures invest in?
We invest in Kiwi founders with unique insights, building global companies. We invest at the earliest stages in a company's journey through to Series-D, and have no specific markets or verticals that we do or don't invest in (other than those in conflict with the exclusions in our Responsible Investing Policy).
What happens to distributions from successful investments?
When a fund portfolio company experiences a liquidity event (either is wound up with some residual value, or is acquired, or IPOs), your pro-rated share of the net proceeds will be distributed directly to you.
What is the expected lifetime of a venture fund?
Venture funds are investing in early stage companies and as such, their lifecycle is in line with how long it takes for those companies to build a significant company and create an according amount of value. A fund could expect to have the majority of its portfolio companies to have liquidity events before ten years, but it would not be unusual for companies to still be creating value at that point.
What are the expected returns?
It is not possible to place an expectation on returns given the early-stage nature of venture.
While this asset class provides the possibility of outsized returns relative to others, this is balanced with a higher risk. Our funds have varying degrees of diversification and strategy to help investors construct a portfolio in line with their risk appetites and investment strategies. Ultimately, the success of a particular early-stage venture fund is defined by whether it has one or more major liquidity events from within its portfolio.
Can I sell my fund investment early?
We currently do not have a secondary market for investors to sell fund positions after they have purchased them. You are able to sell these informally however, and they can be transferred to another entity if required.
Can I co-invest alongside the fund directly into specific companies?
There are often opportunities for investors to make direct investments into portfolio companies, though this cannot be guaranteed as it depends on sufficient equity being available to meet demand.
What is the cadence of fund reporting?
We issue a comprehensive report for each individual fund every two months, and most of the underlying information is available in real-time from within our investor portal.
Where can I track my portfolio?
All investors in Icehouse Ventures funds have access to our investor portal, a platform where you can track your fund investments and underlying positions in portfolio companies, read portfolio company shareholder updates, read fund reports, export statements, and benchmark yourself against the wider investment community.
What management fees does Icehouse Ventures charge?
Management fees vary by fund, refer to our fund prospectuses for more information on that fund fee structure. Note that many funds also include carry.
What is carry?
Carry is a form of profit share on fund returns, once a specific hurdle of returns to investors has been met (typically this is 8% compounding on the original investment)
Do you have an ESG Policy?
We will not invest in ventures with significant involvement in the following activities:
- Fossil fuel exploration and extraction
- Military weapons
- Civilian firearms
- Nuclear fission
- Adult entertainment
We will also avoid investments that have contravened the ten principles of the UN Global Compact relating to Human Rights, Labour, Anti-Corruption and the Environment.
It is possible that we may make investments that develop technologies related to these activities, however, we will only do so if they are developing solutions that reduce the harm of these activities. For example, a venture that develops technology to reduce the environmental impact of fossil fuel exploration and extraction would not be excluded from consideration.
In addition to excluding ventures in the above fields, we will actively consider ESG issues in our investment selection and due diligence processes to adequately consider the risks presented by ESG issues. In doing so, we will consider the nonfinancial impact of ventures in our investment decisions, favouring investments that demonstrate ability to deliver tangible, measurable positive impact.
Do you have a responsible investment policy?
Yes. We believe that the ventures our founders build will shape the world we live in, and we want that shaping to make a positive impact. Accordingly, we are committed to investing responsibly. Read our responsible investment policy.