Goal: Acquire deeply discounted interests in 30 compelling private companies that have unicorn potential
Accelerator targets interests in:
- 30 growing companies that the manager believes have the ability to reach $1 billion in valuation
CrossWork Opportunity
Summary of Strategy
- For accredited investors only. An accredited investor has annual income over $200k ($300k combined with a spouse) or net worth of $1 million alone (or combined with a spouse)
- Accelerator takes positions in 30 leading tech companies that generally have $1-$20 million in revenues and are interested in a potential exit
- First 6 accelerator opportunities have been closed with exceptional companies. 20+ additional offers have already been made to potential accelerator companies.
- Formed by ex Goldman Sachs bankers with an extended advisory team of 30 professionals, advisors and consultants from hedge funds to Fortune 500 companies. Over 100 years combined investment experience and deep pre-IPO experience
- Team track record of billion dollar investment results: Facebook, Twitter, Cvent etc.
- As of Sep. 2020 IPO market has been strong despite Covid. Largest software IPO in US history, Snowflake, launched successfully in September 2020. Many more are expected shortly
- Very basic summary information is presented here. Schedule a meeting to learn more at https://meetings.hubspot.com/steveo1
Scenario Modelsβ
20x
- Out of 30 accelerator companies ,if one company reaches $1 billion in valuation:
- Then CrossWorkβs interest (assuming 3% average) is worth $30 million
- Investors get at least $10 million or 20x based on a $500,000 investment
- However, all VC investing carries the risk of loss of capital
4x
- Out of 30 accelerator companies if two companies are sold for over $100 million each in valuation:
- Then CrossWorkβs interest (assuming 3% average) is worth $6 million
- Investors get at least $2 million or 4x based on a $500,000 investment
CrossWork Accelerator Interests Vs. Other Private Company Structures
CrossWork Accelerator Offering
- Diversification reduces risk
- Return enhancement allows Accelerator to continue to add companies to investor portfolio to target higher returns (only being offered to current round investors)
Typical VC Fund Investment
- Diversification reduces risk
- Risk of loss of investment with no way to make up loss when investment capital expended
Typical Single Company Investment
- Lacks diversification
- Risk of loss of entire investment
Why Do We Enhance Returns?
Targeting Attractive Returns
- We are aiming to be the top performing accelerator and fund in our niche
- It is our fiduciary prerogative to leverage unfair advantage for the benefit of our investors
- We seek to develop lifelong relationships with our advisors and investors
- There is no rule that says you should only return to an investor from the βpotβ that they invested in
- The structure aims to provide wins to all parties - accelerator companies, advisors, accelerator and investors
Our Core Investment Process Allows Us To Enhance Returns Through An Accelerator Program
- Many companies do not pass our due diligence processes, tests and filters
- We put those companies that we like through a deeper due diligence process
- Companies that pass a VERY high hurdle are admitted into our accelerator. Our advisor network must be able to add value to the business.
Scenario Modelsβ
Return enhancer example for accelerator and fund companies
IBM And Amazon have agreed to provide CrossWork accelerator and fund companies up to $200k in cloud hosting credits
$200k
IPO Market
As of September, 2020 IPO Performance Has Been Very Strong Despite Covid
- >50% return in major IPO index returns as of Sep. 2020
- CrossWork believes timing is of the essence to capture technology market strengths
U.S. IPO Market
Biggest U.S. Software IPO of All Time: Snowflake - September 2020
- The biggest tech IPO of the year came in September, when cloud data warehouse vendor Snowflake arrived on the New York Stock Exchange
- The company priced shares at $120, up from its initial pricing of $75-85
- Raised $3 billion, the most ever for a software firm at IPO
Select Transaction Examples
- A CrossWork partner completed an early stage investment in Cvent
- Cvent completed an IPO on the New York Stock Exchange at a valuation at over $1 billion
- Cvent was subsequently acquired for $1.6 billion by Vista Equity, a fund founded by a former Goldman Sachs colleague
- As of August 2020 ranked top 10 among software companies in USA