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Capital Window Fund Will Focus On Alternative Asset Classes for 2013

Thomas Carter — Mon, 07 Jan 2013 05:04:08 +0000

SEC not be able to meet deadline to issue regulations allowing advertising for Rule 506 investment offerings

josh — Fri, 29 Jun 2012 13:51:54 +0000

The SEC has announced that it will not be able to meet the deadline to issue regulations allowing advertising for Rule 506 investment offerings. The SEC said that it would take action “in the very near future” but gave no dates.

As part of the JOBS Act signed April 5 by President Obama, the SEC was supposed issue regulations allowing advertising for Rule 506 offerings on or before July 4. Until those regulations are issued, advertising is not allowed. For more details see http://mobile.reuters.com/article/idUSL2E8HRFZO20120627?irpc=932.

Halo Report Illuminates Angel Investor Trends

josh — Fri, 09 Mar 2012 23:28:56 +0000

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Now is a good time to be a startup looking for funding, suggests the Halo Report, which provides data and identifies trends affecting early stage entrepreneurs and investors. Angel Resource Institute, Silicon Valley Bank and CB Insights collaborated in the development of the report.

Most notable among its findings: The median round size for angel group investments grew to US$700,000, an increase of 40 percent over 2010. In fact, the Halo Report found that many deals were syndicated among investors, giving companies access to even larger amounts than in the past.

“The increase in round sizes is mirroring what is happening with venture money, which is focusing on early seed investments,” Anand Sanwal, CEO and cofounder of CB Insights, told the E-Commerce Times.

The most active angel groups, according to the report, were Tech Coast Angels, Band of Angels, Golden Seeds, Central Texas Angel Network and Launchpad Venture Group.

A Good Week

One company that benefited from the trend toward larger round sizes is Social Rewards, developer of a social loyalty platform. Last month, it closed on an oversubscribed seed round totaling $600,000 — and at the end of the process was turning away investors, according to CEO Joseph Morin.

“Needless to say it was a good experience,” he told the E-Commerce Times, particularly as the bulk of the seed round was comprised of funding by members of Tech Coast Angels. One of the company’s funds has a seven-day policy — that is, it will approve or reject an applicant in seven days.

“We made our pitch on a Monday, and the next Monday they notified us that we had been unanimously approved,” Morin said. It secured $100,000 alone from that one fund.

Geographic Diversity and Other Trends

There were, in fact, a number of trends in the report that may be surprising to the angel investment community, CB Insights’ Sanwal said.

“The increased funding round size was one,” he said. “Another was the geographic diversity in the investors.”

California led in deals and dollars among the individual states. However, 79 percent of angel group investments were in companies outside of California, and 70 percent of total funding was invested outside of California.

“A lot of markets where these groups are active aren’t traditional hubs for venture capital,” Sanwal said. “The southeast did pretty well — and from a venture capital standpoint, it is not a place where we usually see a lot of activity.”

Healthcare Tops Tech

Another surprising finding is that the healthcare sector received more angel funding than technology, Sanwal said.

Sixty percent of healthcare investments were in medical device and equipment companies.

That’s due to a growing number of angel investors with backgrounds in the healthcare space, either as former executives or doctors, he explained. “They tend to invest in things they know.”

There’s an emerging trend among angel investors not only to achieve a financial return, but also to pursue positive societal goals, Sanwal has noticed.

The Halo Report analyzed investment activity by angels and angel groups, examining trends in round sizes, location and industry preferences. It is based on 573 deals totaling $873.3 million dollars invested.

Favorable Stock Gain Tax Provisions for Entrepreneurs & Investors Ending Dec 31, 2011

josh — Tue, 20 Dec 2011 22:56:52 +0000

We are wrapping up 2011 and I wanted to make sure everyone knew about a tax provision that is going to be ending on Dec. 31, 2011. In a nutshell it allows any investment into a Qualifying Small Business (see below) and held for 5 years to be 100% excluded from Capital Gains Tax. This is huge potentially saving an investor $100K’s and Millions of dollars in taxes on profits made from their small business investments.

Please read the summary below. I have listed several resources that confirm. IT IS ONLY GOOD THROUGH THE END OF 2011.

Summary:

To encourage investment in new ventures, small businesses, and specialized small business investment companies, Section 1202 of The Internal Revenue Code grants relief to investors who risk their funds in these businesses.
The Small Business Jobs Act of 2010 was enacted, further amending Section 1202 to exclude 100% of qualifying gain from gross income for investments made before December 31, 2011.
For Qualifying Small Business (QSB) stock purchased between September 27, 2010 and December 31, 2011, a zero percent effective income tax rate will apply to at least the first $10 million of gain upon its ultimate sale if applicable requirements are met.
A “Qualified Small Business” (defined roughly as any business that isn’t a real estate or investment firm that has less than $50 million of gross assets that actually tries to make something or build a product/ service
The stock must be held for a minimum of 5 years before redemption. However if, there is a liquidity event within 5 years from purchase, the investor can roll those dollars into another QSB Investment tax free (similar to a 1031 exchange)
Section 760, Temporary Exclusion of 100% of Gain on Certain Small Business Stock, of the Tax Relief Act of 2010, extended the exclusion for qualified small business stock acquired before January 1, 2012.

References:

Section 1202: Small Business Stock Gain Tax Exclusion - http://www.groco.com/readingroom/sec1202_gain.aspx

Small Business Jobs Act of 2010 Tax Provisions - http://www.irs.gov/businesses/small/article/0,,id=230307,00.html#2011

Two Millions Reasons to Start (or Invest) in a Company Today - http://www.huffingtonpost.com/mobileweb/jason-finger/two-million-reasons-to-st_b_1146030.html

Don’t Launch A Company, Launch A Fund

josh — Thu, 10 Nov 2011 12:34:50 +0000

TechCrunch.com Article:

Every investor and entrepreneur knows there is something scary about the current startup economy. There is an enormous amount of angel capital available, while at the same time there is a small amount of Series A and a large and concentrated amount of late stage capital. Industry insiders have affectionately dubbed this situation “the Barbell”, and it has become the most serious threat to the progress that startups have made — since 2008.

At least nine out of ten high-quality angel-funded startups face an unnecessary death, because there is no Series A money to help them survive critical expansion. (See Rip’s post on the rise in late stage capital here.)

In the last boom ending in 2008, there was approximately $30 billion in angel investments and another $30 billion in venture investments done every year. By most estimates, there is now as much as $80 billion in angel versus just over $10 billion in all stages of venture. Just 1 in 100 angel deals may get funded by venture capitalists today, yet there are probably at least 10 strong startups in a 100, if not more.

As if this were not bad enough, estimates are that 70% of angel deals across the United States and a growing number of investments in other countries are structured as convertible debt. The debt needs to convert into Series A equity within a year, or the debt needs to be paid back. Investors regularly extend the debt that has come due for another year, since asking the startup to pay back the loan would bankrupt the business. With 10 or 20 angels of varying levels of sophistication in a deal, it only takes one angel to request a payback, and the company will go down. (Elad Gil has a smart post on TechMeme today that also analyzes this series A crunch.)

The solution to this structural problem in the startup economy is simple: we need more venture funds. Unfortunately, thousands of funds around the world have been killed off since 2007. Just in the last three months, 1 of 4 of the top-rated venture capitalists on TheFunded have left their firm or the field altogether, so further declines in Series A investments are on the horizon. At this pace, the venture industry won’t hit bottom until 2014, after which turnover cycles in limited partners and growing returns from secondary markets should support new interest in the asset class. In the end, more funds will save the good companies and balance out the infamous barbell.

All of this means that it is precisely the right moment to launch a fund. First, you have a large number of high-quality companies that need capital, while the competition to provide capital is decreasing. Second, you have a pool of frustrated limited partners looking for new managers. Finally, there are new forms of liquidity that are starting to drive returns, most notably the active secondary markets. It probably won’t get much easier to launch a new fund than it is right now, and the startup economy needs the help.

A great source of these new fund leaders may be the hundreds of people setting up Y Combinator clones around the world. These seed-fund/ incubators require two to three million dollars per year to run, producing between 10 and 20 angel funded companies. Many of these will fail due to the high cost of annual operations without a functioning Series A market. The people that set these incubators up have already raised capital, so they are in a good position to set-up a fund. If you are really bold, like Dave McClure, you can run both an incubator and a fund, though there are some obvious conflicts of interest.

Running a fund is not for everyone, but, if you think you have it in you, go for it. Now is the time.

Another important note: There is the upcoming Founder Showcase on November 8th, where TC’s founder Mike Arrington will be the keynote speaker, and I am sure he will talk about the issue on stage at the event.

Article URL: http://techcrunch.com/2011/11/04/dont-launch-a-company-launch-a-fund-or-the-series-a-will-die/

Summit Trust Showcasing Capital Window Fund at 2-Day Executive Briefings in Philadelphia, Las Vegas, & Miami in November

Thomas Carter — Sat, 22 Oct 2011 22:18:11 +0000

Summit will be introducing 5 new innovative SMA products including The Capital Window Fund that they helped underwrite and which provide investors with proper exposure to alternative asset classes needed to properly balance their portfolios. These products will be offered first and only by Summit Trust, who has negotiated a direct placement deal for Summit clients and partners.

The two-day event will be held in Philadelphia, Las Vegas, & Miami allow the Summit Trust team to educate and motivate insurance & investment professionals on all the new products & services being offered to make their business stronger. The goal of the program is to enable you to say, “By working with Summit Trust, I was able to offer my clients more than I could have ever imagined. Working with like-minded, trusted professionals that have the necessary knowledge and expertise helped take my business to a whole new level.”

Summit Trust is also offering a way to plan and integrate these new alternative asset allocation products directly into the accounts of Traditional Trust accounts, Charitable Accounts, & Dynasty Trust portfolios. These types of investor accounts have rarely had the opportunity to easily invest in Private Equity or Hedge Fund allocations until now! Due to the innovative nature of the Summit Trust product lines & SMA buying method the investors are able to allocate among these groupings.

November 1-2: Philadelphia
Nov. 9-10: Las Vegas
Nov. 17-18: Miami

CWF attends Alternative Asset Summit in Las Vegas

josh — Sun, 16 Oct 2011 18:56:12 +0000

CWF attended the industry’s premier event, the Alternative Asset Summit, at the unforgettable Palazzo in Las Vegas from Oct, 12-14, 2011. The Summit is a unique experience designed for the Industry Professional to efficiently accomplish their informational and networking needs. Most attendees are predominantly Investors, Managers, and the only the most expert of Service Providers in their respective fields. The Summit brings together the highest concentration of leading hedge fund managers, institutional investors, and Family Offices to one venue. Given the smaller and selective attendance comprised larger of friends and friends of friends, the Summit generates 3 days of hyper-networking and concentrated open and insightful discussions generating more take aways than larger, less personalized conferences.

The Capital Window Fund is supporting local LA charities through a sponsorship of the 1st Annual LA Suitcase Party on Friday, 11/11/11

Thomas Carter — Thu, 06 Oct 2011 15:00:14 +0000

The event will be held at the Van Nuys Airport in a luxury private hangar. guests will bring a packed suitcase to the event, walk the red carpet, and enjoy an evening of drinking, dancing, and food samples from local LA restaurants and caterers. At approximately 9:00 PM, a private jet will taxi to the far side of the hangar and the evening’s main opportunity drawing will take place.

The winning ticket will entitle its owner, plus a guest, to grab their packed suitcases and board the private jet which will leave immediately for Sonoma Valley, cA. over the weekend, the winners will enjoy 5-star accommodations, private tastings, massages, gourmet meals, and full day tours of the region in their private, chauffer-driven car before their private jet returns them to Los Angeles late sunday afternoon.

Those not fortunate enough to win the trip to Sonoma Valley will be eligible for other vacation prizes, including a stay at the Montage location of your choice, or the brand new downtown Ritz Carlton, which will also be drawn and awarded that night. those winners will be taken by limousine, directly from Van Nuys Airport, to local resorts for a weekend get-away. everyone will have the option of pre-reserving a weekend trip at a big discount to one of several local 5 star hotels like Peninsula Beverly Hills, St. regis Monarch Bay, or the San Ysidro ranch, each with special goodies and discounts thrown in.

See www.lasuitcaseparty.com for tickets & more details.

Benefitting LA charities include the Children’s Hospital of LA, A Good Night Sleep, Wells Bring Hope, Cloud & Fire, & The Todd White Project.

Capital Window Fund Sponsors Opus Connect OC “Family Offices” Luncheon

Thomas Carter — Thu, 06 Oct 2011 14:58:57 +0000

Opus Connect hosted a monthly luncheon titled “The Continued and evolving role of family offices in Private Equity” on Tuesday, 9/27/11 in Irvine, CA. Increasingly, family offices are looking to invest in Private Equity Funds and/or directly in PE backed companies and are, more and more, viewed as an important source of capital for operating businesses. With new investment mandates and an increasingly sophisticated platform from which to make investment decisions, family offices are becoming more prominent players in the investment industry. The luncheon touched on how family offices go about navigating their roles are investors in Private Equity Funds, co-investors with Private Equity Funds and capital partners for operating businesses.

The Capital Window Fund was received extremely well by all the Family Office participants and has several scheduled follow up meetings to discuss the advantages of our investment thesis and model.

Capital Window Fund to Sponsor Chilean Investors Forum on Fri, 9/9/11

pcharles — Thu, 01 Sep 2011 17:05:33 +0000

Link: http://www.latinmarkets.org/index.php?acao=pasta&valor=76&pg=0

The Chilean Investors Forum, organized by Latin Markets, is an international meeting of hedge, real assets, and private equity fund managers and investors. The Forum brings together 200+ investors, funds and advisors to discuss investment strategies, due diligence, asset allocation and alternative investment opportunities in Chile and around the world.Chile is home to Latin America’s 2nd largest pension fund system and is the 3rd largest economy in South America. Unlike other South American countries facing political change, Chile has a long history of stability, a diversified industry, a well-educated work force, wealth and reserves. The Chilean Investors Forum will examine the current environment in Chile and areas ripe for investment.

The Capital Window Fund is proud to be sponsoring the event along with companies like LarrainVial, Morgan Stanley, & Deutsche Bank.