INSIDE THE TRENDS
It will be interesting to many to find out that the Venture Capital Market existed long before WWII. Back then, the wealthiest American families, such as Vanderbilt, Whitney, Rockefeller and Warburg, backed up financially with their wealth the youngest companies, as well as the most innovative ones and with the most potential to succeed.
We can say that the modern Venture Capital we are witnessing today was born after WWII, when not only the richest families, but also successful companies started investing in private equity. Such quality improvement sets an unlimited potential growth within this investment model.
The real boom concentrated in the Silicon Valley, an area which specialized in developing hardwares, softwares, computers and electronics. Besides the Californian field revealed itself to be very fertile for the tech world and for Venture Capital. But the real place where this investment framework was born must be placed in Boston, and should be attributed to Georges Doriot. Doriot was a hero during WWII and became Dean at Harvard Business School, but not just that: we remember him as Venture Capital’s father. His experience and his success, in fact, led him to significantly invest in startup companies in Cambridge.
In detail, Venture Capital, is a high risk investment form, holding at the same time impressive financial revenue. For a company that wants to be backed up by Venture Capital, it is important to own traits that outline a company ready to manage a significant capital and that is ready to ‘lay it on the ground’ for example by rapidly conquering market quotas. Among such traits we have: a solid team which has to be competent within the industry it belongs to; a wide market to serve; a product or service that owns a clear competitive advantage on other companies.
What does Venture Capital work imply?
The entities that finance the startup’s work, in other words who invests capital, are mainly institutional funds. Once the financial goal previously agreed has been reached thanks to the collection rounds, and once the funds are available, the Venture Capital can start operating based on its investment area of focus. It is important to highlight that Venture Capital, by investing, automatically acquires shares in the company and may decide, together with the original team, to help the startup on an operational level. In case this should not be necessary, Venture Capital waits for the right moment to perform the exit, and leave the investment process.
Several are the Venture Capital companies that hold tens of billions of AUM in the USA. Among the most known we have Sequoia Capital, Andreessen Horowitz, Khosla Ventures e Accel. Among these, we can also find Rebel Fund.
With a portfolio holding 135 companies and a net worth of $9.8 billions, Rebel aims to invest in the best 0,1% out of the 40.000 tech startups that every year apply to the Y Combinator, the number 1 accelerator in the world with over 80 unicorns and over $600B worth of companies in its portfolio. The due diligence decisions and fund investment are made by an
ex-alumni team at Y Combinator who have funded companies worth over $85B all together, who have invested in over 200 startups and generated portfolio revenue to the highest levels. Rebel uses a learning algorithm of which it is the owner, to help validate and monitor potential investments, building a diversified portfolio made up of Y Combinator startups which are statistically programmed to over-succeed.
Beyond the help of AI, the human factor is necessary to guarantee to Rebel Fund a consistent success and can be summarized in four points: reputation, selection, access and portfolio support. Thanks to a consistent synergy among these, you can foresee a high success rate. As a witness to this, Rebel Fund holds in its team various awarded people, such as: the most performing investors, Y Combinator alumni with facilitated access to the best startups, the CEO’s experience over the years, and the ability of the partners to have ensured billions to the startups they worked with. A winning mix like this sees in Rebel the perfect candidate to reach an undeniable competitive advantage.
It is interesting to note that Rebel Fund applies a diversification strategy to its investment which include: real estate, industrial, healthcare, tech and finance and B2B. As you can imagine, 56.3% of its investments lie in the USA and Canada, while in lower percentages but with significant impact, we have South America, South-East Asia and Europe.
The Rebel Fund investors include over 100 among the most known ‘tech funders’, the most affirmed ‘venture captains’ in Silicon Valley, government leaders, international families and institutional investors.
Which are the real privileges of Rebel Fund investors?
- Privileged access to future investments
- Consistent updates on the fund
- Annual exclusive events
- Access to the Silicon Valley network
In conclusion, we have seen how Venture Capital was born and how it expanded. At the moment, it will be interesting to find out which new geographical areas and sectors it will bet its risk capital on in the near future.
