Q. I don’t know anything about investing. Can this still work for me?
A. Yes – our funds are designed for both those new to investing and those with deep investing experience. If you don’t have much or any experience, we offer a rich educational experience. This includes real-time hands-on learning each month, as well as webinars for deeper dives into the various components of early-stage investing. You don’t have to be an angel investor to benefit from a diversified portfolio of 6-10 high-potential companies.
Q. Is there an education component included with this fund?
A. Yes, our “learn-by-investing” model lets our members learn at whatever level of engagement fits her or his lifestyle. The real learning comes from being a part of this totally transparent process: watching companies pitch, hearing the questions our Venture Partners drill down on, being part of the discussion as we evaluate companies post-pitch, potentially joining a deal team to be a part of the diligence process, and joining success teams post-investment to help portfolio companies succeed. We also host safe spaces for all of your investment questions, including quarterly educational sessions focused on the fundamentals of early-stage investing (e.g. Sourcing, Decision Making, Adding Value, and Exits).
Q. I’m interested, but I don’t have much time to give to this right now. Is this something I can still do?
A. Participation is a benefit of being involved in a Portfolia fund, but it’s not necessary for you to participate actively to gain substantial value—we want Portfolia to fit your interest and lifestyle. Portfolia is a ‘guilt free’ zone and we encourage you to engage personally at whatever level works for you.
Q. Where do you find companies?
A. We source our potential investments through Portfolia’s networks, our venture partners, and members. Additionally, our deal flow comes from the deep relationships Portfolia holds with the Venture Capital community, accelerators and others in the innovation ecosystem. Our CEO is also Founder/CEO Emeritus of the Kauffman Fellows Program, a venture capital training program with over 500 VCs around the world (0% women). We see companies not available to others.
Q. How do I submit a company for consideration?
A. In addition to our Venture Partners and deep professional networks, we source potential investments from our members. You can refer a company or instruct the CEO to submit their company here. We only consider companies that are venture-ready and meet the investment criteria set forth by each Fund. That usually means the company has a product, service or platform already in the marketplace, has a unique competitive advantage in the marketplace, is recognizing revenue, and has an experienced leadership team. Your referrals are one of the reasons we’re so successful as a team.
Q. Can I invest more than $10,000?
A. Yes. $10,000 is the minimum investment amount, and investments typically range up to $100,000 or more for individuals.
Q. Can men invest in the funds?
A. Absolutely. Portfolia funds are a new model of venture investing designed to appeal especially women and minorities – but we’re inclusive to all and welcome men in our funds.
Q. What are the risks involved?
A. You can and will lose money in early stage investing. Our goal is that the successful investments will outweigh the losses we’ll see in some of our early stage portfolio.
Q. What does “accredited” mean, and why do I have to be accredited to invest?
A. U.S. federal regulations require potential investors in private companies to meet certain income guidelines before they invest. These were established to ensure an individual can afford to suffer a loss of the funds without undue consequences, harkening back to the Great Depression in the 1930s. To be accredited, you must hold income of $200,000 for the last two years and expect to have that income going forward (or $300,000 if including your spouse); or net assets, minus your home, of $1 million.
Q. How do you know that I’m accredited?
A: You will have to be validated as accredited, but it’s not too onerous. With information you provide, we identify one of the following to be true to establish your accreditation status:
If you are already a member of an angel group or were referred by a member of our angel group that knows you to be accredited.
If someone in the Portfolia member organization (investment team or member) has a prior investing relationship with you and knows you to be accredited.
If you’re new to investing, we need to have a qualified third-party (attorney, CPA, financial advisor, or registered broker-dealer) who can speak to your income and/or assets submit an accreditation certification form. Please email firstname.lastname@example.org for a copy of the form.
Q. How does early stage investing compare to other investment options?
A. Angel investors with a portfolio of 30+investments have the greatest returns per the available data, but this number is very difficult to achieve on your own. An investor would have to review hundreds of deals and do deep research on dozens before creating a personal profile of 30+ companies. That’s why Portfolia uses a collaborative process, reviewing opportunities across the country, to provide its members with a quick portfolio.
Q. Do you only invest in companies led by women?
A. We invest in companies where women and minorities make markets, where we add real value to the entrepreneurial. We invest with a preference for inclusive and gender-balanced teams. Our goal though is to find the best investments for our members.
Q. I am a very experienced investor. How can your model work for me?
A. Yes, experienced investors will find the model innovative and will benefit from further diversification across a national footprint. And we’re always looking for experienced angel investors, retired VCs or cashed-out entrepreneurs as lead investors in future funds.
Q. I am interested in investing in LGBT or other minorities. Is that a fit for Portfolia?
A. It’s probably not a surprise that we’re interested in and backing companies that are not finding an open door in traditional venture capital. Great companies are being founded by African American and Hispanic men and women, yet they are finding difficulty in getting capital; while their communities see gaps that must be filled. The same is true with the LGBT community. Portfolia aggressively seeks companies that we feel understand a large and untapped market, beyond that defined by traditional Silicon Valley or Wall Street investors. It makes sense economically and socially.
Q. Can I tell others about Portfolia Funds?
A. When Portfolia investors become involved in the funds, they often ask to share it with their friends and colleagues. We’re happy for you to do this. Do remember that you must be accredited to invest. Please refer those that have an interest in Portfolia Funds to email@example.com.
Q. How can my organization get involved?
A. We partner with a number of organizations well aligned with Portfolia and our members. Our partnerships can include training, co-sponsoring events, education, organization-specific introductory calls, and the option to partner on individual funds.
Q: Do you invest in companies outside the U.S.?
A: At this time, we are only investing in companies with a registered U.S.-based C-Corp. Many companies founded in other countries register in the U.S. We do have investors from countries around the world.
Q: How many investments would the fund pursue?
A: We usually make up to 10 investments from each annual fund.
Q: How does follow-on investing work with Portfolia?
A: Follow-on investing occurs when a company we have previously invested in returns for additional capital. We also have assignable pro-rata rights (the right to invest at the share of the company we now own), so our individual member investors can continue to invest in the company if they choose. We invest each of our Funds within approximately 12 months, and subsequent Funds also have the opportunity to invest in our portfolio companies at later stages.
Q: What incentives do your lead investors have to bring great deals to the Fund?
A: We’ve created a new model that brings top individual investors, mostly women, into leadership roles in our funds. All of our lead investors share in the carried interest (or profits) of the fund, both as a group and individually for the companies they bring to the fund that. This enables us to have a national footprint and ‘cherry-pick’ the best deals for our fund.
Additionally, all are committed to getting more women and minorities engaged as investors in entrepreneurial companies. They also benefit from the collaborative nature of the process, which results in seeing more and better investment opportunities as a group. Finally, as one said, ‘this is the most enjoyable investing I’ve ever done.’
Q: For tax reporting, will I get a K-1?
A: Yes, our tax accountants are familiar with the tax return processes for early-stage investments. You will receive your K-1 in March.
Q: How long should I expect my investment to be held for?
A: Your money is held by the companies in which we invested in by the fund you are a part of until the companies exit individually, or when we hit the 7-year mark. As the 7-year mark approaches, we will review secondary markets to which we may sell our shares to.