What types of investors are on VentureHealth?
Our portal welcomes accredited investors who understand the high risks involved in equity investments, and are interested in healthcare innovations. Our investors include serial entrepreneurs, physicians, executives, business owners and successful professionals.
What types of companies are on VentureHealth?
You will generally find privately-held, young companies with strong intellectual property that are focused on commercializing a breakthrough innovation in healthcare. Some of these companies will already have attracted venture capital investors; others may be seeking their first round of outside capital. Most of these ventures will be developing clinically-focused innovations that are regulated by the FDA, and that will need to be paid for by the reimbursement system in the USA.
Are these investments risky?
Yes, these investments are risky. Only a small percentage of companies that approach VentureHealth are selected for investment by means of a rigorous process. Nevertheless, VentureHealth does not recommend investment opportunities as suitable for any specific VentureHealth investor. Each company that you find on our website bears significant financial risk, which you must carefully evaluate with your advisors before making an investment decision, relying on information provided by the companies that are raising capital.
How does a company get listed?
Companies apply to VentureHealth by joining our portal as an entrepreneur. Such applicants should be aware that we primarily intend to list ventures that have a potential breakthrough innovation that is based on science and solid intellectual property. In addition, we will actively screen for management teams with experience, who understand the importance of mitigating regulatory and reimbursement risk. Background checks and opportunity-specific research will be performed, often by professional investors who lead the investment syndicates. Unfortunately, we list only a small percentage of companies that apply.
What will I actually own?
When you invest in a VentureHealth fund, you are purchasing an ownership interest in a venture capital fund that holds company stock or convertible notes in one or more private companies. This allows you to gain financial exposure to the companies, although the VentureHealth fund is the shareholder of record. This creates an attractive mechanism for startups that prefer to interface with a single entity, and enables you to participate in startup investing via better access and lower fees. Upon a liquidity event such as an acquisition or IPO, you will receive your portion of the proceeds when they become available for distribution.
What are the fees for using VentureHealth?
There are no annual membership fees for investing in VentureHealth funds, nor do the funds charge any commission or other transaction-based compensation. Instead, like most venture funds, VentureHealth receives compensation through a combination of fees and carried interest. The carried interest corresponds to a share of the profits, if any, generated by liquidity event. The amount of carry will vary from fund to fund, but will generally fall in the range of 20%. Unlike most venture funds, VentureHealth expects that its primary compensation will be derived from carried interest.
Does VentureHealth charge fees to startups?
No, VentureHealth does not charge fees to startups. This allows us to avoid the adverse selection involved in broker/dealer transactions.
How is the valuation of the company determined?
So far, the valuation of our “accredited crowd” deals have been set by venture capital firms, based on offline negotiations with the company that is raising capital. We anticipate that this will continue to be the case going forward, and that VentureHealth will receive the same preferences as those obtained by the venture firms.
When should I expect to get my investment back?
Private company securities are illiquid and not publicly traded on exchanges or markets, so you will not receive a return on your investment until the fund makes a distribution of cash or securities to you following a liquidity event with respect to the securities owned by the fund in which you are invested. A distribution typically occurs either because the company has been acquired by another company or because the company undergoes an initial public offering of its stock on NASDAQ, NYSE, or other exchange. It can take 4-7 years (or longer) from an initial investment to see a distribution of this sort, as it takes years to build companies – and in many cases, there may not be a distribution at all.
Are there investment minimums? Maximums?
Yes. The minimum and maximum investments are different for each investment and are set by the Company, based in part on how much capital is being raised and how popular the offering proves. In some cases, VentureHealth will provide access to oversubscribed deals, in which we only have a limited amount of capital that we can place. In those cases, we will limit each investor to a maximum amount.
What are the tax implications?
VentureHealth cannot provide individualized tax advice. In general, the tax implications of investing in our funds are similar to investments in any other fund and will also depend on the company invested in and the nature of the proceeds received in any liquidity event. However, you should review the investments with your tax advisor for tax considerations specific to your situation.
Can I repost information from VentureHealth to public websites or other public venues?
No. This is a clear violation of our Terms and Conditions due to legal issues with posting information about VentureHealth investments to the public. Members reposting fund or company information will be banned from VentureHealth.