OneFund: Increasing Access to Venture Capital and Private Equity
OneFund is on a mission to increase access to top-tier venture capital and private equity funds. Founders John Bailey & Spencer Moslow saw firsthand, during the early days of their careers in finance, how well certain funds performed but were frustrated that only the extremely wealthy could access them.
Problem & Solution
John & Spencer knew there had to be a better way. A more equitable way. In that vein, they started OneFund, whose goal is to democratize access to the private investing world. Today, most VC and PE funds are only available to ultra-high-net-worth individuals and institutions at minimum check sizes often up to $10m or more. OneFund is partnering with many of these VC and PE funds to make those investment opportunities available to OneFund’s members at lower check sizes with a simplified subscription process. On OneFund, minimums will be as low as $10k for Accredited Investors (those with $200k per year in income or $1m in assets) with the long-term objective being to allow all investors access to VC and PE.
For the past few years, AngelList, which has facilitated startup fundraising since 2015, and Republic, founded in 2016, have sought to similarly open up private investing to non-HNWI (high-net-worth individuals). However, with both of these options, users are choosing specific startups to invest in, typically not investing in a fund. This requires users to have the experience and time required to appropriately diligence individual startups, plus it can be hard to build a diversified portfolio. Instead, by investing in funds through a platform like OneFund, users are able to invest in a basket of companies managed by experienced professionals.
More recently, a few VC funds that are structured to allow for low minimum investments have sprung up; one example is Sweater VC. However, with options like Sweater, users are stuck with access to only one fund which typically doesn’t have a track record yet. The OneFund team sees this as a step in the right direction but wants to take that progression even further by offering their users access to multiple, established VC/PE funds. Why is this a better alternative to Sweater VC? It makes individuals less beholden to a single fund manager’s strategy (especially one that lacks strong historical performance). Again, diversify, diversify, diversify.
Business Model
A core part of OneFund’s mission is to align the company’s incentives with those of their customers. This is reflected in the business model that the founding team has chosen. Most of its revenue will come from charging carry over a hurdle, which means OneFund doesn’t make money until its customers do. A small portion of revenue will come from a management fee to “keep the lights on.”
Product Roadmap
OneFund will be launching in the coming weeks and the waitlist is now open (join here!) for those who want early access. For the initial launch, OneFund will have a curated selection of offerings and the minimum check size will be $10k. However, as mentioned above, the company aims to continue lowering this threshold as it expands.
The long-term vision is for OneFund to be a one-stop-shop for retail investors seeking access to alternative investment funds. In addition to VC & PE options, the platform intends to offer credit funds, infrastructure funds, and more for its users.
It will be exciting to see OneFund open to the public this month and until then, you can follow the journey on Linkedin, Twitter and Instagram.
