Yesterday, AngelList announced a new venture capital fund, USVC. AngelList has long been a key innovator for online capital formation. The company spawned sister platforms, including Republic and CoinList, while providing a digital path for early-stage firms to raise capital and investors to participate in the asset class.
USVC is a VC fund that is open to anyone – accredited or not. For a low minimum, an investor may participate in a diversified fund that holds some of the biggest names in the private securities market. While highly illiquid and not for the impatient, USVC is emblematic of the push to provide more opportunities for retail or smaller investors.
Following the announcement of USVC, AngelList CEO Avlok Kohli took to X to provide some additional insight into the fund, including how the fees/carry work for investors. He noted that he has seen many questions on X about USVC and sought to answer some of them.
Regarding fees, Kohli said annual fees are capped at 2.5% for the first year. The fee would be 3.6%, but AngelList is subsidizing it in the first year. He added that fees usually go down in a VC fund as it grows, but USVC fees could go up, and they are looking at ways to “address this uncertainty.”
Importantly, USVC does not charge carry – something a traditional VC does.
“USVC aims to make total costs the same or less than investing in a good VC fund. And a lot less than investing in a fund-of-funds. All while getting the potential benefits of a fund-of-funds that can do direct, secondary, and fund investments. A typical fund-of-funds charges 1/10 (fees/carry) on top of a VC’s 2/20, for a total of 3/30.”
The fund structure will include a blend of early-stage and mid- to late-stage holdings. USVC currently holds late-stage and mid-stage firms.
Regarding liquidity, USVC aims to provide partial liquidity of up to 5% each year. Kohli cautions that if you need access to liquidity, USVC is not the place.
International investors are not yet able to participate, but they are working on this.
While there is no sales load up front, if the fund is sold by a broker, they may add one on top.
As for the valuation of the fund, which is made up of illiquid assets, Kolvi says that the valuation policy for USVC sets Net Asset Value using audited financials from the underlying funds or recent fundings.
USVC is subject to annual audits under the same standards as every company listed on U.S. stock exchanges.
As not all of this information is readily available on the USVC site, Kohli said they would update it.
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