The previous posts in this series looked at investors that invested directly through VentureSouth. This included investments made through our VentureSouth Angel Funds. If the last posts were accurate, we would expect an automatically-diversified portfolio to lead to even fewer investors that have lost money overall.
And, based on our two fully-invested sidecar funds, those expectations would be correct. None of the investors in those funds have lost money, and none are (we think) on track to.
Fund I (2014/16 vintage) has already returned almost 50% of invested capital to members, from the realization of just the first three of its 18 investments. It has a book value approaching 2x ROI already (from exits and the residual portfolio value based only on later share sales, not marking-to-market the performance of its portfolio), and could be more if things continuing going well in the portfolio.
Fund II (2016/18 vintage) has had its first positive realization this year, a book value of 1.1x ROI already, and is on track for similar results – though it is still too early to estimate precisely what the return will be.
These fund investors (with no loss-makers yet) bring the average for VentureSouth down a little: those that are less diversified from their group investing have incidence of losses.
Of course, no-one knows what the future brings. If many of these companies fail over the coming months it is conceivable that these fund investors could ultimately lose money. But with companies like Proterra, KIYATEC, Baebies, Spiffy, Emergo, Emrgy, and others attracting national attention, VC funding, strategic partners, and acquisition interest we are optimistic.