Venovate Provides One Stop Shop For Investors Seeking Hedge Funds, Other Alts.

Feb 27 2015 | 5:56am ET

Online matchmaking services for investors and alternative asset managers have been around for years. While many have tried—with various degrees of success—to use digital platforms to streamline the capital raising process, there has still always been the need to take the transaction to a broker to execute. Venovate Marketplace aims to change that.

Company: Venovate Marketplace
Location: San Francisco, CA
Twitter: @venovate
Sectors: Alternative Investing, Retail Investing, Institutional Investing
Founded: 2013
No. of Employees: 16
Stage: raising a Series A funding; in revenue
Notable investors: Provident Trust Group, 9Plus (Silicon Valley incubator)

Pitch: Venovate offers accredited investors and advisors an online brokerage platform for curated, institutional-quality, alternative investments.

Tell us a bit about your company and what it does?

Venovate Marketplace is for investment advisors, family offices, investment companies, and accredited individual investors who seek alternative investment opportunities, including real estate, private equity, hedge funds, venture capital, and pre-IPO private companies. Venovate provides access to a wide variety of curated, institutional-quality opportunities, presented in a standardized and transparent way, and with an easy, efficient way to invest – all online.

How are you different from other companies in the same space?

First, Venovate Marketplace is not just a listing or matching service. We are a FINRA registered broker/dealer and SEC registered Alternative Trading System (ATS). On our platform you can invest or raise capital, from start to finish, fully compliant, and all online.

Second, Venovate Marketplace is unlike equity crowdfunding sites because we offer a broader range of alternative investment opportunities. Some competitors focus on a single type of asset class, such as pre-IPO startups or real estate. We offer investors a choice of carefully curated, institutional-quality funds and direct investments across a wide range of asset classes and strategies. 

Third, with comprehensive decision support materials and in-depth disclosure on all investment opportunities, presented in a standardized and transparent way, we make a traditionally confusing and inefficient process streamlined and intuitive for both the issuer and the investor.

What is your revenue model? How will the company make money?

Venovate charges issuers a placement fee of between 2% and 5% of capital successfully raised on the platform, or a percentage of the management fee for funds. Investors do not get charged for making investments on the platform.

Who is your target market? How big is the opportunity?

Venovate is for investment advisors, family offices, investment companies, and accredited individual investors who seek alternative investment opportunities. At the other side of the market, Venovate is for issuers of private placement investment opportunities who seek access to qualified investors.

The market for alternative investing is huge. For example, there are approximately 4 million high-net-worth individuals in the US who control around $14 trillion in assets. In 2013, average allocations to alternatives (other than real estate) grew from 9% to 13%. When real estate is included, the allocation grew from 22% to 27%.

As fixed income yields stagnate near 0% and equities become more and more volatile, the traditional bond/stock/cash asset allocation model is losing favor. Sophisticated investors are looking to alternative investments to provide stability, cash flow, growth and low correlation with other asset classes. Many high-net-worth individuals are targeting between 10% and 30% allocation to alternatives. Institutions with longer time horizons are allocating even more. Some large university endowments for instance are now allocating more than 50% to alternatives.

Why are you and your team capable of succeeding?

The Venovate team is lead by financial services and technology veterans who disrupted stock investing at Schwab, E*trade, and Zecco. Our team also includes seasoned investment bankers, entrepreneurs, and money managers. Collectively, our deep domain knowledge and financial technology expertise uniquely positions Venovate to change the way alternative investing is done.

What is your company’s next target/milestone?

Venovate Marketplace is open for business. We have launched the platform and attracted quality issuers to the platform, representing over $1B in investment opportunities. On the other side of the market, we have attracted hundreds of investment advisors, family offices, investment companies, and accredited individual investors to sign up as well. We have successfully facilitated the first transactions between investors and issuers, and closed the first deals listed on the platform.

Venovate is now looking to accelerate its growth through targeted marketing, sales, and business development initiatives, establishing the company as the leading destination for alternative investing.

Can you tell us one unusual fact about your company?

We have a classic boxing bell mounted on a post in our office to celebrate new listings and successful closings of opportunities on the platform. We are looking forward to ringing our bell very frequently!

In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...


Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...


From the current issue of