Star Wars Imperial March x Carol of the Bells
FAQ on Project Voice Capital Partners Rolling Fund
Came in a pack.
All blasters shoot.
making them crash.
Rebels are down. Empire's in. Princess must hide. They cannot win.
One more Substack.
This one’s a FAQ.
Our new VC fund,
from front to back.
We have been asked many questions about Project Voice Capital Partners Rolling Fund, which officially launches January 1.
I have compiled a majority of the questions we’ve regularly received and am listing them here. Even more information is provided on the PVCP Rolling Fund page itself.
Q. What is a rolling fund?
A. In essence, a rolling fund is a quarterly sequence of individual limited partnerships. Each quarter, a rolling fund like PVCP Rolling Fund will invest in a minimum of 3 companies that fit its thesis (in our case, early stage conversational AI / voice tech) using the deployable capital available. For Q1 2023, we have announced 2 of the 3 companies we intend on investing in, Applied Brain Research and Aug X Labs, and have not announced the third. Investors who have committed to the rolling fund and "subscribed" by January 1 will participate in the Q1 2023 "vintage" of the rolling fund, i.e. the specific investment portfolio belonging to that quarter, as well as the subsequent quarters in which you participate.
(You can read a FAQ about rolling funds here and about the innovation they have brought to VC markets here.)
Q. What is Project Voice Capital Partners?
A. A new legal entity, which sits outside of Project Voice itself, having the mission of investing in venture-grade, early-stage conversational AI and/or voice technology companies.
Q. What is Project Voice Capital Partners Rolling Fund?
A. A specific investment vehicle, created by Project Voice Capital Partners, which provides investors with access to PVCP’s deal flow but with a smaller capital commitment than typically required by more traditional venture capital funds.
Q. Who can participate in Project Voice Capital Partners Rolling Fund?
A. Accredited investors ($200k solo income over last 2 years or $300k joint income with spouse over last 2 years). Upon applying to invest via PVCP's AngelList portal, you will be asked about this.
Q. How are you allowed to promote the fund? Aren’t venture capital funds prevented from doing this by SEC rules?
A. Project Voice Capital Partners Rolling Fund is an IRS 506c vehicle which has the unique and specific ability of allowing promotion to the general public, with the understanding that only accredited investors will be able to financially participate.
Q. Why 3 companies per quarter?
A. This has to do with the unit economics of being on the AngelList platform as well as the philosophical importance of providing diversification to investors. 3 companies per quarter means 12 companies (at minimum) over a 4 quarter time horizon, which should provide ample diversification for investors especially relative to being a solo angel investor on your own.
Q. You keep mentioning AngelList. Can you provide more information on them?
A. Read this.
Q. Why not just do a more traditional, closed-end fund?
A. For emerging managers (i.e. people with little to no previous experience running a VC fund, like me) getting the requisite number of investors to meet large dollar amount hurdles to begin such a fund can be challenging. A chicken/egg problem exists where emerging managers need to establish a track record, but can't raise funds to do so without the track record. The rolling fund format, invented during the pandemic just two years ago, has a major advantage which it enables newer VC fund managers to begin operating with much less capital than funds would typically require, thus enabling the track record to start being built easier than ever before and results to be shown which in turn attracts even more investors and so on.
Q. What types of people are investing Project Voice Capital Partners Rolling Fund?A mix of traditional venture capital investors, along with those for whom perhaps this is a first time investing in venture capital, all of which fundamentally agree with our thesis that conversational AI and voice technology are emerging technologies which will produce venture-level returns over a sustained period of time into the future.
Q. What is the minimum level of participation in PVCP Rolling Fund?
A. A minimum financial commitment of $12,500 per quarter, over a minimum length commitment of 4 quarters. Beyond this, investors can choose to invest more capital (either over the same duration of 4 quarters, or potentially over a longer duration of time) for more exposure to our deal flow. These minimums are (far) less than VC fund participation typically requires, thus opening access to more people, including those perhaps new to VC investment.
Q. What is the timeframe for financial returns from PVCP Rolling Fund?
A. Venture capital provides, as an asset class, the greatest returns of any type of financial vehicle as a tradeoff for the lack of liquidity involved over an extended period of time. As companies in the PVCP Rolling Fund enjoy liquidity events or other positive outcomes, proceeds will be returned 1x to original investors. Thereafter, 80% of proceeds are returned to original investors with 20% carried interest allocated to the fund’s general partners. This is one area in which the rolling fund mirrors almost exactly how more traditional venture capital funds operate - these are norms.
Q. Who is involved with Project Voice Capital Partners Rolling Fund?
A. Our team is listed on the fund page here.
Our friends at Boost.ai (one of many companies participating in Project Voice 2023) are doing a webinar with research firm Forrester on Thursday, discussing the measurable impacts of conversational AI.
Worth the time to check out as they will be presenting some interesting findings:
A 293% ROI over a three-year period
$19.9 million in net present value
$10.9 million in income uplift
You can register for this here.