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FAIRNESS IS THE PRINCIPLE THAT MATTERS MOST TO ALL Venture Clubs Affiliate Program Start Page Projects Partners Star Companies Resources Template created by: Desert Hawk		Venture Investing and the Masses FairShares aims to increase access to venture investing for small and average investors. The following two articles describe one of the "early" efforts to expand venture capital access. They provide you with background that explains why the FairShares programs are so unusual and promising. And Now, Venture Capital for the Masses By Beth Cox I nternetnews.com E-Commerce News December 10, 1999 Early stage venture capital firm Draper Fisher Jurvetson is forming a new $500 million venture fund in conjunction with meVC.com, and the twist is that individual investors may participate. "Venture capital has historically only been available to millionaires and large institutional investors," said Tim Draper, founder and managing director of the firm. "We want to allow the small investor a chance to participate in this important driver of the U.S. economy." The first fund with meVC.com is set up to help finance private Internet start-ups throughout the United States with the help of the Draper Affiliate Network. The Draper Affiliate Network currently includes Zone Ventures of Los Angeles, Draper Atlantic of Northern Virginia, Draper Triangle of Pittsburgh, Wasatch Ventures of Salt Lake City, Timberline Ventures of Vancouver, and Draper Fisher Jurvetson's yet unnamed New York City office. The network is growing at the rate of one new fund per quarter. Draper Fisher Jurvetson funded Internet start-up. meVC.com with $4.5 million to help drive the front end of this new fund. meVC, a national venture capital investment management firm, said it "offers individual investors the opportunity to participate in the formation and wealth creation of the new economy through venture capital investing." Through a family of professionally managed, diversified venture capital funds, meVC said it intends to provide individual investors "unprecedented access to early-stage, emerging growth companies before their initial public offerings." meVC, along with Draper Fisher Jurvetson, intends to create a national network of venture capital and management services to support innovation and help entrepreneurs build successful businesses. meVC was founded in June 1999 and completed its second round of venture financing in October. ---------- MeVC Brings Venture Capital Investing To The Masses Lynn Sherman, Forbes.com, 07.08.00, 12:00 AM ET Mutual funds brought Wall Street to Main Street and made investing a national pastime. But venture capital stage investing has remained out of the sight lines of the vast majority of people. Executives at meVC, a San Francisco-based venture capital investment management firm, want to change that. The firm has just launched its first fund, which mimics the kind of VC fund previously offered only through a private placement to institutional investors and a handful of the wealthy. "We are trying to create a whole new asset class for [retail] investors," says meVC Chief Executive Officer Andrew Singer. "This is not a mutual fund and it is not CMGI," one of the best-known VC firms. To that end, meVC launched its closed-end meVC Draper Fisher Jurvetson Fund 1 mvc (nyse: mvc - news - people), named for the partner on this fund, the VC firm Draper Fisher Jurvetson, in Redwood City, Calif. The fund was closed last month, after 20,000 individuals invested $330 million. To date, roughly $85 million of that has been invested in ten companies in areas including information services and enterprise software. Current holdings: eYak, EXP.com, AuctionWatch.com, FOLIOfn, InfoImage, Endymion Systems, eOnline, ShopEaze.com, infoUSA.com and Personic. "These are companies [most individuals] can't invest in any other way," says Singer. The fund also plans to seek out companies that are using the Internet to provide traditional telecommunications services such as phone calls. This fund, a broad-based information tech play, is slated to hold stakes in 30 to 50 young technology companies when it is fully invested within the next two years. The fund is currently ahead of its investing schedule, in part because of the favorable conditions created by the Nasdaq correction in March. Young companies unable to tap the public markets are coming back for later-stage venture capital funding, according to Singer. "We are seeing more deals and pricing has come down so we can invest at more attractive valuations than we could six months ago," he says. Shares of meVC's first fund were offered through Prudential, Fidelity, DLJdirect, Raymond James & Associates and Gruntal during the initial subscription period. Investors who want to get in now will have to buy shares through their broker. Investors will have a tough time comparing the expense ratio for this fund to that of most traditional mutual funds. In addition to an annual management fee of 2.5%--which is relatively high for a mutual fund--investors must relinquish 20% of the realized gains in the fund to its managers. This is more common in the world of hedge funds and Internet incubators. Singer explains that this arrangement--although not standard for the mutual fund industry--is necessary for attracting and retaining venture capitalist partners. The meVC family of funds is currently in talks with various VC firms about potential partnerships. Draper Fisher is the first, but it won't be the last, says Singer. The second fund from the company, the meVC Delta Life Sciences Fund 1, is currently in registration. The ten-year performance of the venture capital industry as a whole is 26%, compared with 18% for the Standard & Poor's 500 index. But that comes at a risk. One-third of the companies in traditional venture funds go public or are acquired; the rest fail or deliver poor performance. So the minority of investments that succeed really have to deliver the goods. Even so, "venture capital has traditionally been one of the best-performing asset classes out there," says Morningstar's director of stock analysis Pat Dorsey, who calls Draper Fisher "a top name in the business." However, Dorsey notes that even wealthy individuals put just a small percentage of their assets into venture capital stage companies and questions how many investors really need to diversify into a pure VC investment vehicle. For individuals who want a taste of VC investing, some traditional open-ended funds invest a portion of their assets in venture capital stage companies. For example, up to 10% of the assets of the Dreyfus Premier NexTech Fund can be invested in venture capital-stage companies and venture capital funds. The market's appetite for youthful companies may also be a factor for consideration. Many tech companies have gone public so early in their life cycles that even the public market has something of a VC component, Dorsey says.

FAIRNESS IS THE PRINCIPLE THAT MATTERS MOST TO ALL

Venture Clubs

Affiliate Program

Template
created by:
Desert Hawk

Venture Investing and the Masses

FairShares aims to increase access to venture investing for small and average investors.

The following two articles describe one of the "early" efforts to expand venture capital access. They provide you with background that explains why the FairShares programs are so unusual and promising.

And Now, Venture Capital for the Masses
By Beth Cox
I nternetnews.com E-Commerce News
December 10, 1999

Early stage venture capital firm Draper Fisher Jurvetson is forming a new $500 million venture fund in conjunction with meVC.com, and the twist is that individual investors may participate.

"Venture capital has historically only been available to millionaires and large institutional investors," said Tim Draper, founder and managing director of the firm. "We want to allow the small investor a chance to participate in this important driver of the U.S. economy."

The first fund with meVC.com is set up to help finance private Internet start-ups throughout the United States with the help of the Draper Affiliate Network.

The Draper Affiliate Network currently includes Zone Ventures of Los Angeles, Draper Atlantic of Northern Virginia, Draper Triangle of Pittsburgh, Wasatch Ventures of Salt Lake City, Timberline Ventures of Vancouver, and Draper Fisher Jurvetson's yet unnamed New York City office.

The network is growing at the rate of one new fund per quarter. Draper Fisher Jurvetson funded Internet start-up. meVC.com with $4.5 million to help drive the front end of this new fund.

meVC, a national venture capital investment management firm, said it "offers individual investors the opportunity to participate in the formation and wealth creation of the new economy through venture capital investing."

Through a family of professionally managed, diversified venture capital funds, meVC said it intends to provide individual investors "unprecedented access to early-stage, emerging growth companies before their initial public offerings."

meVC, along with Draper Fisher Jurvetson, intends to create a national network of venture capital and management services to support innovation and help entrepreneurs build successful businesses. meVC was founded in June 1999 and completed its second round of venture financing in October.

----------
MeVC Brings Venture Capital Investing To The Masses
Lynn Sherman, Forbes.com, 07.08.00, 12:00 AM ET

Mutual funds brought Wall Street to Main Street and made investing a national pastime. But venture capital stage investing has remained out of the sight lines of the vast majority of people.

Executives at meVC, a San Francisco-based venture capital investment management firm, want to change that. The firm has just launched its first fund, which mimics the kind of VC fund previously offered only through a private placement to institutional investors and a handful of the wealthy.

"We are trying to create a whole new asset class for [retail] investors," says meVC Chief Executive Officer Andrew Singer. "This is not a mutual fund and it is not CMGI," one of the best-known VC firms.

To that end, meVC launched its closed-end meVC Draper Fisher Jurvetson Fund 1 mvc (nyse: mvc - news - people), named for the partner on this fund, the VC firm Draper Fisher Jurvetson, in Redwood City, Calif. The fund was closed last month, after 20,000 individuals invested $330 million.

To date, roughly $85 million of that has been invested in ten companies in areas including information services and enterprise software. Current holdings: eYak, EXP.com, AuctionWatch.com, FOLIOfn, InfoImage, Endymion Systems, eOnline, ShopEaze.com, infoUSA.com and Personic.

"These are companies [most individuals] can't invest in any other way," says Singer. The fund also plans to seek out companies that are using the Internet to provide traditional telecommunications services such as phone calls.

This fund, a broad-based information tech play, is slated to hold stakes in 30 to 50 young technology companies when it is fully invested within the next two years. The fund is currently ahead of its investing schedule, in part because of the favorable conditions created by the Nasdaq correction in March. Young companies unable to tap the public markets are coming back for later-stage venture capital funding, according to Singer.

"We are seeing more deals and pricing has come down so we can invest at more attractive valuations than we could six months ago," he says.

Shares of meVC's first fund were offered through Prudential, Fidelity, DLJdirect, Raymond James & Associates and Gruntal during the initial subscription period. Investors who want to get in now will have to buy shares through their broker.

Investors will have a tough time comparing the expense ratio for this fund to that of most traditional mutual funds. In addition to an annual management fee of 2.5%--which is relatively high for a mutual fund--investors must relinquish 20% of the realized gains in the fund to its managers. This is more common in the world of hedge funds and Internet incubators. Singer explains that this arrangement--although not standard for the mutual fund industry--is necessary for attracting and retaining venture capitalist partners.

The meVC family of funds is currently in talks with various VC firms about potential partnerships. Draper Fisher is the first, but it won't be the last, says Singer. The second fund from the company, the meVC Delta Life Sciences Fund 1, is currently in registration.

The ten-year performance of the venture capital industry as a whole is 26%, compared with 18% for the Standard & Poor's 500 index. But that comes at a risk. One-third of the companies in traditional venture funds go public or are acquired; the rest fail or deliver poor performance. So the minority of investments that succeed really have to deliver the goods.

Even so, "venture capital has traditionally been one of the best-performing asset classes out there," says Morningstar's director of stock analysis Pat Dorsey, who calls Draper Fisher "a top name in the business."

However, Dorsey notes that even wealthy individuals put just a small percentage of their assets into venture capital stage companies and questions how many investors really need to diversify into a pure VC investment vehicle.

For individuals who want a taste of VC investing, some traditional open-ended funds invest a portion of their assets in venture capital stage companies. For example, up to 10% of the assets of the Dreyfus Premier NexTech Fund can be invested in venture capital-stage companies and venture capital funds.

The market's appetite for youthful companies may also be a factor for consideration. Many tech companies have gone public so early in their life cycles that even the public market has something of a VC component, Dorsey says.