Emerging Pre-IPO Fund
A fund targetting interests in 30 compelling private companies that have pre-IPO or unicorn potential
Fund targets interests in 30 exceptional companies in compelling growth industries and provides key return enhancements
CrossWork Emerging Pre-IPO Fund
Summary
- For accredited investors and institutions 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)
- We take positions in 30 growth companies that generally have $1-$100 million in revenues and are interested in a potential exit
- Formed by ex Goldman Sachs bankers with an extended team of 30 professionals, advisors and consultants from hedge funds to Fortune 500 companies
- First opportunities have been closed with exceptional companies. Additional offers have already been made to more companies.
- Track record of billion dollar investment results: Facebook, Twitter, Cvent etc. We also have our fair share of losses and view them as learning opportunities
- Very basic summary information is presented here. Schedule a meeting to learn more at meetings.crosswork.us
-
Very basic summary inform-
ation is presented here.
Schedule a meeting to learn
more at https://meetings.hubspot
.com/steveo1
Our Approach
- You must be an accredited investor (i.e. annual income over $200k ($300k combined with a spouse) or net worth of $1 million alone (or combined with a spouse). Also includes certain family offices, trusts, entities and institutions with more than $5 million in assets
- We walk you through our approach regarding both pre-IPO companies and emerging pre-IPO companies
- The goal of the call is to share information. There is no requirement or expectation of any action or committment after the call
Feel free to schedule some time to chat with a senior professional and learn more about our approach
Emerging Pre-IPO Fund Strategy : Scenario Models
10x
- Out of 30 companies if one company reaches a $2 billion valuation:
- Then CrossWork’s interest (assuming 3% average) is worth $60 million
- A $1 million interest would return $10 million on just this company without counting 29 remaining companies
2x
- Out of 30 companies if two companies reach $200 million each in valuation:
- Then CrossWork’s interest (assuming 3% average) is worth $12 million
- A $1 million interest would return $2 million on just these two companies without counting 28 remaining companies
Private equity investments including ours are risky, illiquid and carry the risk of loss of all capital
Emerging Pre-IPO Fund Vs. Other Private Company Structures
Emerging Pre-IPO VC Fund Approach
Diversification reduces risk
Return enhancement allows fund to add companies to investor portfolio to target higher returns
Aims to produce similar returns to a VC fund at lower risk but;
Can not put as much capital to work as a traditional VC fund
Typical VC Fund Approach
Diversification reduces risk
Risk of loss of investment with no way to make up loss when investment capital expended
Takes on higher risk to produce higher returns
Can put more capital to work
Typical Single Company Investment
Lacks diversification
Emerging Pre-IPO Fund
Our Core Investment Process Allows Us To Enhance Returns Through CrossWork’s Accelerator Program
Deal Flow Due Diligence
20-40 Accelerator Companies
+ Potential Investment
10-20
Investments
- Many companies do not pass our due diligence processes, tests and filters
- Compelling companies, meeting strict criteria. Excellent performance and strong management teams that our advisor network can help scale
- Investments that pass a VERY high hurdle. Clear pre-IPO companies + mid/late-stage companies with the best management teams and hands-on co-investors with strong niche track records.
Equity Enhancement
IBM and Amazon have agreed to provide CrossWork accelerator and fund companies a high level of complementary cloud hosting services and credits
IPO Market
2020 IPO Performance Was Strong Despite Covid
- >50% return in major IPO index returns as of Sep. 2020. That being said, IPO's also have negative performance as well
- But CrossWork targets investments at pre-IPO price further enhancing potential return. Still past performance may not be reflective of future performance
- CrossWork believes timing is of the essence
IPO Market
Increasing IPO Sizes
- 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. Past performance is no indication of future performace and some IPO stocks do not do well
- These immediately popped on the first day of trading, ending up by as much as 111% at $245 per share
- Raised $3 billion, the most ever for a software firm at IPO.
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 a fund founded by a former Goldman Sachs colleague
As of August 2020 ranked top 10 among enterprise software companies in USA
Not all investments do well and we have had our fair share of failures. We learn from our successes and failures
“In addition to completing an equity investment in our company, Steven helped us complete our overall round of equity financing and has provided us with significant strategic input and guidance that has helped our overall strategy;”
– Chairman and CEO, Cvent, Inc.
Deal Flow
In Numbers
20+
Contracted high level advisors and consultants with wide industry coverage
1,000+
VC + PE contacts with whom CrossWork has had communications over the last 5 years
100+
Years of combined investment experience of team
50,000+
Investors, executives, lawyers & accountants in CRM
Deal Execution
CrossWork Deal / Investment Process
Deal Flow
Leverage contracted infrastructure of advisors, consultants and relationships at over one thousand VC funds
Investment
Decision
Target, with some exceptions, opportunities that fit core criteria:
(1) High gross margins
(2) Thousands or millions of customers or users
(3) High growth
(4) High switching costs
Investment
Execution
Utilize smart securities and other structures to maximize returns and reduce risk
On-Going
Performance Monitoring
Review frequent financial and other business information. Frequent executive meetings. Require or seek board appointments
Shareholder
Value
Development
Provide strategies and transactions that can significantly increase portfolio company value e.g. inexpensive acquistitions, targets partnerships, etc.
Investment
Realisation /
Exit Strategy
Orchestrate or influence the ultimate sale/IPO of the company or other means of generating shareholder returns such as recapitalizations