Investments in illiquid venture capital (VC) assets can lower the correlation to traditional asset classes. All too often, however, professional investors with lower investment volumes lack access to promising VC projects. While the target group actively seeks new investment opportunities, they are missing the necessary “connecting tools” to fully tap the potential for VC.
Until recently, the solution to this problem was to establish a partnership where the originator acts as a general partner and the investors act as limited partners. But this lightweight structure has fundamental disadvantages. Launching next-generation financial products (certificates with Swiss ISINs), solves those problems by enabling effective and “democratized” access to alternative assets for all professional investor groups. GenTwo's new securitization solution improves contractual relations and operations of VC projects, and, perhaps more importantly, provides a novel way of limiting risks and optimizing taxation for the general partners. By using issuing platforms as an innovative tool, venture capitalists can raise more funds and increase the pool of new investors significantly.
Through these next-generation investment products, market prices can be obtained during the investment period instead of only at the end of the term when the investment is sold. As a result, portfolio valuation has increased transparency. Additionally, the platforms offer greater flexibility because countless certificates in various forms can be launched under one "umbrella". Never before has fundraising been more efficient, convenient, cost-effective, and simple.