Venture Capital FAQs
At Keyport Venture Partners, we are committed to providing thorough information for investors, so you know the potential risks and benefits of venture capital investments. Here’s some information on frequently asked questions to get you started.
What is your venture capital minimum investment size?
Our venture capital minimum investment size is $100,000.
What are the investment banking fees?
Keyport capital charges a one-time fee of 2% for due diligence, management and expenses
How are the investments structured?
Investors are Members of a fund (organized as an LLC) that purchases a specific company’s shares or the economic interests in shares. Keyport Venture Partners acts as the Manager of this fund. The Manager will establish a Series of Interests for the purpose of making a separate and distinct investment in a specific company or companies identified by the Manager, purchasing securities in such company or companies from secondary sources (directly or through forward purchase contracts), or investing in interests of investment funds, special purpose vehicles, and other entities (including investment funds and other entities affiliated with the Manager or its affiliates) whose investment portfolios are comprised of one or more companies consistent with the Fund’s general investment focus. Each Series will remain segregated from all other Series.
Can I invest with a self-directed IRA?
Yes. We welcome venture capital investments from self-directed IRAs.
Do I own the stock in these companies?
No, you’ll be a member of an LLC that owns either the shares or the participation interests in the economic upside and downside of the shares.
What kind of paperwork or venture capital documents do I receive as an investor?
Our paperwork is similar to that of any fund investment, but simpler. An investor would sign a Subscription Agreement, through which they would purchase an interest in the fund (company). In addition, an investor would also complete a one-time W-9 (W-8 BEN for foreign investors) and Suitability form. On an annual basis, investors will receive a Schedule K-1 updating them on their investment. All legal and financial documents are prepared with the involvement of outside counsel or accountants, as applicable.
Once I invest, will I receive any formal or legal investment banking documents stating my investment?
Yes, you will receive your countersigned Subscription Document indicating your membership in the Fund. You will also receive a welcome letter outlining the Series of participation and breakdown of your investment.
Will I be receiving any financial updates for my investment? How often?
Yes. Our third-party Fund Administrator will issue K1’s annually. We will also update you on any material impact to your investment (company news, new funding rounds, secondary transactions, or indicators to new valuation).
The company I invested in has an initial public offering (IPO). What happens next?
If a company series in which you’ve invested goes public, we would register the shares and work with your brokerage account custodian to transfer the shares. Typically, the common stock is subject to a 180-day lockup, so we would facilitate the transfer after this period.