Cathie Wood and Titan are teaming up to give small investors the chance to get into the venture capital game for around the price an IKEA sofa.
This week, Wood’s ARK Invest announced the launch of the ARK Venture Capital Fund, which is exclusively available to retail investors on the Titan investment platform. Billed as a “one-of-a-kind exclusive partnership”, the deal allows accredited and non-accredited investors to participate in venture capital and invest in private and public companies ahead of the IPO for a minimum of $500 .
The news comes just a week after Titan, an investment app launched in 2018 by New York-based Titan Global Capital Management, has reintroduced itself to advisors and investors with a redesign focused on delivering a personalized private wealth management experience. Titan currently serves over 55,000 clients on its app with over $750 million in assets under management and an average account size of $12,500.
Clayton Gardner, co-founder and co-CEO of Titan, said the mainstream investor has historically been shut out of venture capital due to accreditation requirements, high investment minimums and lack of access to companies. leading venture capital.
“By giving Titan investors exclusive access to the ARK venture capital fund, we are unlocking venture capital for most investors, another step in our mission to democratize investing,” Gardner said in a statement. . “We are delighted to be working closely with Cathie Wood and the ARK team to launch this fund, especially in the current market environment where attractive investment opportunities abound.”
For Wood, giving investors with less money to spend the opportunity to invest in companies in their early stages of growth levels the playing field. She believes that retail investors willing to take on the inherent risk have increased potential for see positive returns on investment while taking advantage of market opportunities with no accreditation required.
“ARK Invest focuses exclusively on technologically enabled disruptive innovation, not only in our research and investment strategies, but also in our products and services,” Wood said in a statement. “By launching the ARK Venture Capital Fund, we seek to increase venture capital, providing all investors with access to what we believe to be the most innovative companies throughout their life cycle in the markets. private and public.”
According to ARK officials, the actively managed Ark Venture Fund intends to invest 70% in early-stage and development-stage private companies and 30% in public technology stocks. There will also be selective investments in other venture capital funds.
The actively managed vehicle charges a management fee of 2.75%, with an estimated total expense ratio of 4.22%.
Bloomberg reported that the ARK Venture Fund has been in the works for February when a first deposit revealed plans for a closed “gap” product that would turn Wood’s flagship strategy into less liquid assets. Interval funds are structured to give investors less control over how and when to withdraw their money. Up to 5% of the venture capital fund’s net asset value may be redeemed by investors each quarter.
Max Friedrich, research analyst at ARK, said in an interview that a key aspect of the fund will be its time horizons. Unlike many venture capital funds, it will not be forced to sell a position after an IPO.
“We can keep our companies private once they go public, and we can benefit from value creation throughout the life cycle of a private company,” Friedrich said. “With the initial feedback we’re getting from private companies, we’re hearing that this is a compelling value proposition to be a true long-term partner.”
He added that ARK was excited to move into “social distribution” with Titan. The low minimum investment means that any individual investor can potentially invest “without meeting qualification or accreditation thresholds”. ARK also intends to expand beyond Titan to offer the venture capital fund on advisory platforms, but the timeline remains unclear.
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