VentureOut Fund

VentureOut Fund
There have been many high profile venture-backed companies in recent years led by LGBT founders and team including Facebook, Fab, Grindr, toktumi, Palantir and PayPal. These businesses and their leadership are building highly successful companies. They are also combating discrimination by raising the visibility of LGBT entrepreneurs and cultivating open and accepting corporate cultures.

Nevertheless, LGBT entrepreneurs and their companies remain potentially underrepresented at all levels of the entrepreneurial finance ecosystem due to a lack of fit in the venture capital environment.

The Launch Angels VentureOut Fund believes that providing access to capital via the fund will help enable and empower LGBT entrepreneurs as they pursue future achievements and build their companies.

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Opportunity

The Launch Angels VentureOut Fund, a micro venture capital fund managed by Launch Angels, is presenting an opportunity for accredited investors to participate in a fund that will make discretionary investments in companies that show diversity by having openly LGBT entrepreneurs as founders or in leadership positions.

The Fund is a convenient and low-barrier window for new and existing investors to discover high-quality LGBT-led deal flow, gain exposure to new investment areas, and support the next generation of LGBT business leaders. For a similar check size as one might write for a single angel investment, investors will own an equity stake in approximately twelve companies.

The Fund will invest in equity and convertible debt securities offered by companies generally at the Seed stage, with the expectation that the majority of returns (if any) will be realized within a 7-10 year timespan, and typically through M&A or IPO exits. Focusing on early stage companies will help create the next generation of LGBT business leaders and help maximize impact on the LGBT startup community.

Investment Criteria

The Fund will invest exclusively in companies that show diversity by having at least one openly LGBT founder or member of the management team.

In addition, companies must offer high-growth potential, financial return commensurate with risk, and meet Launch Angel’s high standards for management team, investors, and business model.

Advisory Investment Committee & Fund Advisors

Advisory Investment Committee

Fund Advisors

Get Involved

Levels of Support

1

Supporter

 

What We Ask

  • No donation required
  • Lend your name and support
  • Help spread the word about the Fund

Your Benefits

  • Recognition in list of Supporters
2

Advisor

 

What We Ask

  • Lend your name and support
  • Help spread the word about the Fund
  • Refer entrepreneurs and deals
  • Contribute to light due diligence/mentoring (as you wish)

Your Benefits

  • Recognition in list of Advisors
  • Events with Fund members & entrepreneurs
  • Newsletter
3

Investor (accredited only)

 

What We Ask

  • $50,000 – $250,000 investment participation
  • Lend your name and support
  • Help spread the word about the Fund
  • Refer entrepreneurs and deals
  • Contribute to light due diligence/mentoring as your background allows (as you wish)

Your Benefits

  • Investments in 10-15 LGBT-led businesses
  • Access to Investment Committee meetings
  • Monthly reporting, with one yearly K-1
  • Access to private investor website
  • Events with Fund members and entrepreneurs
  • Newsletter
4

Advisory Investment Committee Member

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What We Ask

  • Lend your name and support
  • Help spread the word about the Fund
  • Refer entrepreneurs and deals
  • AIC prep and meetings: 6hrs/mo for 12-18 months
  • Contribute to due diligence/mentoring as your background & time allows

Your Benefits

  • Recognition in list of AIC Members
  • Participation in profit interests
  • Events with Fund members and entrepreneurs
  • Newsletter

Frequently Asked Questions

How many companies will the Fund invest in?

The Fund aims to make 12-18 investments over a 12-24 month period. That means in two years you will have a diversified portfolio of more than twelve early stage investments.

Can you say a little more about deals and diligence?

Deals will often involve Series A Preferred equity, though the Fund can invest in convertible notes with caps. The Fund conducts independent diligence with contributions from the Advisory Investment Committee and LPs, but will often piggyback off of deal documents like term sheets.

What does the investment process look like?

Each month, the Fund takes an in depth look at 3-5 early stage companies. At month’s end, the Advisory Investment Committee meets to discuss the companies and make an investment decision. The Fund aims to for one investment per month, but the AIC can choose to not invest or split that month’s allocation between two companies. All investors are invited to observe AIC meetings.

How do you find potential investments?

Potential investments will be sourced from within the LGBT community using the traditional VC model, as well as from equity crowdfunding portals. Some deals may originate from our strategic relationship with StartOut.org, who already identifies promising companies through Access to Capital programs.

Companies will tend to be geographically located in the United States, but will come from a diverse range of sectors, and are often pre-revenue.

What is a traditional VC Fund?

A traditional VC fund starts with a blind (unallocated) pool of capital, an investment thesis (see the Investment Criteria above), and its investment decisions are made solely by the manager(s) of the fund. Fund investors are not eligible to participate in the investment process.

While the Launch Angels VentureOut Fund is a VC fund, it differs slightly from a traditional fund in that the investment cycle and decision-making process as transparent as possible to investors.

Who can invest in the Launch Angels VentureOut Fund?

The Fund is open to accredited investors who are interested and able to make investments in the range of $50K to $250K. An investor is said to be accredited if the investor has a level of wealth defined by the SEC.

Launch Angels does not recommend investment opportunities as being suitable for any specific individual. There are many risks and merits inherent to investing in any of our funds, which must be carefully evaluated with an advisor before the decision to invest is made.

What is the fee structure?

The fee structure involves a management and monitoring fee and a portion of any net profits. A portion of the profits of the Fund will be donated to StartOut.org. For a detailed outline of the fee structure for the VentureOut Fund, please contact us directly.

How long is the Fund open to new investors?

The Fund is open to new investors through early 2015. The Fund has an investment cap. If the cap is reached before the target close date, the Fund will stop accepting new investors. The short period in which the Fund is open to investors is designed to facilitate the deployment of capital to high-potential startups as quickly as possible.

Launch Angels aims to open and close four funds a year with varying investment goals, so there is always a new fund to invest in around the corner.

I'm an entrepreneur, how can I submit my startup to the Fund for consideration?

The Fund expects to begin investing in early-2015 and will begin actively soliciting potential investments at that time. If you would like to submit a company to the pipeline before it begins soliciting investments, please send an email to the investment team with the subject line “[VentureOut Fund] Potential investment in startup name“.

We will try to reach out to everyone who contacted the Fund beginning in Spring 2015. Due to the high volume of startups that approach us, we regret that we may be unable to reply to everyone.

We’re getting capital to great businesses run by openly LGBT entrepreneurs.

The Launch Angels VentureOut Fund is helping to support LGBT-led businesses and the openly LGBT entrepreneurs who are reshaping the stereotype of venture-backed companies and their culture.

Get Involved!

Launch Angels Management Company, LLC (LAMC) is a Massachusetts-based venture capital firm. Past performance of LAMC funds may not be indicative of future results of any fund offered by LAMC. Different types of investments involve varying degrees of risk, and venture capital funds, including those offered by LAMC, involve substantial risk of loss, including loss of all capital invested. Moreover, you should not assume that any of the above content serves as the receipt of, or as a substitute for, personalized investment advice. Our fund offerings are made solely to accredited investors who accept the responsibility for conducting their own analysis of the investment and consulting with their professional advisors with respect to their analysis of this investment. Early-stage companies are risky investments, not suitable for all investors.