In Part II: Structured Seed Capital, we have seen how a Structured Seed Capital framework can capture clusters of best-in-class technology start-ups and return 33% p.a. at a zero risk of loss. For many VCs, this number looks much more like a threat than a promise: Why should Limited Partners choose to invest in traditional VC funds when Structured Seed Capital beats it by magnitudes both in return and risk?
121 Series A deals at an average gross performance of 38% p.a.
In discussions with partners at Top 10 VC firms, we have developed a different perspective on this issue. The i2X framework breeds pioneers instead of seeking nuggets – but this doesn’t mean that seeking nuggets has to get out of fashion. A deeper look into our historic performance reveals that out of 595 start-ups in a diligently designed portfolio, 121 received Series A VC investments. More importantly, they performed in aggregate at a staggering 38% p.a. gross return, dramatically higher than even the top quartile VC average. This means that historically, Structured Seed Capital not only creates a superior asset class in itself but opens a massive new source of high quality deal flow for conventional VC.
