A techno geek and a proficient fund manager, Nin Desai has significantly contributed to Venture Capital and Private Equity industry through her venture, NIN Ventures LLC (or NIN.VC). NIN.VC is a first of its kind technology venture capital fund to be raised via world wide web.
Venture capital provides financing to early-stage emerging companies with high growth potential in exchange for equity / an ownership stake. The risks VCs take investing in disruptive technologies or business models yield higher returns their limited partners (or investors) require. Since beginning of the 20th century, venture capital has been the domain of wealthy individuals and families. A typical LP based in a venture fund would be institutions, pension funds, endowments, family offices, etc.
However, the 2008 Financial Meltdown led to a liquidity crises for entrepreneurs, companies, LPs, & VCs. Fewer IPOs in the market means no exits for VCs, no returns for LPs, and as a result venture funds were on a decline. No new funds mean less startup funding, low employment, and slow economic growth. Thus, on April 5, 2012 The Jumpstart Our Business Startups Act (the JOBS Act) was introduced which enables crowdfunding for all Americans and that’s how NIN Ventures (or NIN.VC) came into existence.
“NIN.VC is a unique and first of its kind attempt to bring venture capital retail and give people the freedom to directly invest in a fund with an amount of their choice, which also leads to a better financial reward system.”
Impact of COVID 19
Crowdfunding is a practice of funding a project or venture by raising contributions from a large number of people, typically via the Internet. Since 2014 the crowdfunding industry has grown from $16 billion to an estimated $34 billion in 2015 and is doubling or more every year, and according to the World Bank estimates, crowdfunding will have a global market of $96 billion by 2025 – 1.8 times today’s global venture capital industry.
In the opinion of Nin, currently, the COVID 19 pandemic is changing industries around the world, however one sector that still continues to be promising is Venture Capital. The year of pandemic turned out to be the second biggest year for Venture Capital in history, with funds deploying $141.9 billion in investments in 2020. Few things that have changed are longer pitch and review process time, less favorable terms, more time spent on managing the existing portfolio companies, etc.
Venture Capital investing is normally subject to great deal of uncertainty about the future. Thus, VC practices have evolved to manage these sources of uncertainty. The arrival of the COVID 19 pandemic made it a necessity to collaborate virtually on meetings, documents, and projects and it is expected to penetrate into other aspects of the finance industry, which has traditionally been a solo consumer experience. However, the team at NIN.VC has been futuristic about it and operate its business mainly with the help of world wide web.
A First of its Kind
NIN Ventures is a unique and first of its kind crowdfunded technology venture capital fund to be marketed, raised, managed, and reported online. The General Solicitation and general advertising, under the JOBS act and rule 506 (c) of the US Securities Act made it possible for the company to raise this fund. This rule came into effect Sep 23, 2013 and NIN.VC was the first one to go live with a website and videos about its fund. NIN Ventures also became the first venture fund to be seen on a billboard, which was followed by in taxi ads and other social media facilitated marketing.
A Hybrid Model
NIN.VC has the best of both worlds. It is a hybrid between a traditional venture capital fund and a crowdfunding portal. There is a major flaw with crowdfunding in general and that is what NIN.VC is solving. Nin comes from an entrepreneurial family so she can speak on their behalf.
Entrepreneurs are brave and courageous bunch that are determined to change the way an existing industry functions. On that journey they need lot more than just financing. They need guidance or domain expertise, help with PR/marketing, recruiting, viable exit strategy, more often follow up financing, etc., which crowdfunding portals are not able to support.
On the other hand, crowdfunding exposed investors to a whole new asset class, which the normal population never had the knowledge or expertise to invest in. About 99% of startups fail, on top of that low minimum investments like $1,000 does not give them a say or a board seat, putting investors at high degree of risk.
At NIN.VC, it solved all of those issues. NIN.VC provides diversification, takes board seat on all its investments, and lends the necessary support that an entrepreneur needs to build a business, like they would get at a traditional venture capital fund. And, the venture is also in a position to gauge and be a part of the valuation process when it comes to addressing dilution and follow up financing rounds. However, the most IMPORTANT part that investors cares about is the ability to direct invest and enjoy direct returns, which is not the case with a traditional venture capital fund.
Investing in Disruptive Technologies
NIN Ventures Technology (QP) Fund is currently available to “accredited” individuals / firms for a minimum amount of $100,000 using multiple investment options like self-directed IRAs, defined benefit plan, or a regular checking / savings account. NIN Ventures invests in series A & B rounds of 3D printing, the 4th industrial revolution, cloud computing, fin tech, education software, and other disruptive technology companies.
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