Introducing OPEN – A New York Stock Exchange-backed Venture Company Unicorn Index Fund

OPEN (www.openvc.com) aims to broaden the set of investors with access to private market opportunities. Alongside their largest external shareholder and corporate sponsor, the New York Stock Exchange, they are launching fund strategies that meet long-overlooked private market investor needs – lower fees, enhanced liquidity, and diversification across the asset lifecycle.

Why They’re Doing This

At its best, venture capital has been the best-performing asset class of the past two decades – but it is illiquid, expensive, and inaccessible to many investors. They believe that virtually the only asset class where fees have gone up over the last ~20 years is ripe for innovation.

They believe there are a lot of inefficiencies in private markets, particularly in VC, and they’re obsessive when it comes to uncovering these inefficiencies and creating solutions to address them with a network of industry partners that they’ve built along the way. Their venture indexes, and index-tracking fund strategies, will be the first step in eliminating some of the pain points that they feel exist in VC (namely high fees, lack of diversification, lack of transparency & long liquidity timelines).

Snapshot of their first fund, the OPEN Unicorn Index Fund (UIF): The OPEN Unicorn Index Fund is a secondaries fund that tracks an overlying index of the Top 50 largest US private VC-backed companies, including names like SpaceX, Stripe, Fanatics, etc. The fund will hold 3-4x more companies than a traditional secondaries fund. OPEN will charge investors a 2% management fee and no performance fee, and intends to offer distribution flexibility best aligned to investors’ individual liquidity needs 12-24 months after the final close.

Why They’re Doing This…Now

OPEN believes the current market conditions present a timely opportunity to get into pre-IPO secondaries. The Top 50 largest US private VC-backed companies have seen material declines in their valuations over the last year and a half (~45% on average as of February 2024). Still, despite these declines, the index constituents are fundamentally sound companies. The average annual revenue of the top 50 pre-IPO companies is $2.2bn and several of OPEN’s Unicorn Index constituents would qualify for the S&P 500 if they were public companies. All to say,  OPEN is confident that purchasing now in the secondary market presents an opportunistic entry point, with significant potential upside.

Sample portfolio companies that will be held in OPEN’s Unicorn Index Fund — large, fundamentally sound companies with significant upside once IPO markets recover.

When Will the Index Fund Be Live?

OPEN is targeting an early Q2 launch for the Unicorn Index Fund. You can invest today through Capital Engine’s private markets platform. Be on the lookout for more news on the launch in the coming weeks.

Let us know if you would interested in learning more about OPEN Unicorn™ Index Fund

 

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FULL DISCLOSURE: Black Dog Promotions, LLC dba Black Dog Venture Partners is not registered as a broker, dealer, exempt market dealer, or any other registrant in any securities regulatory jurisdiction and will not be performing any registerable activity as defined by the applicable regulatory bodies. This article is for informational purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that contain important information about risks, fees, and expenses. The information contained in this article is selective and does not purport to contain all the information relating to the company featured. In all cases, parties should conduct their own investigation and due diligence, not rely solely on the data provided herein and are encouraged to consult with a financial adviser, lawyer, accountant, and any other professional that can help to understand and assess the risks associated with any investment opportunity.

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