Venture Capital Funds and Venture Capital Trusts
Venture capital funds like Grovest provide individual investors with the opportunity to invest in company’s where there is opportunity for explosive growth. In the past, venture capital investments were only accessible to professional venture capitalists. A diversified Venture Capital Investment structure like Grovest has implemented, diversifies the risk of a Venture Capital Interest and provides more likelihood of superior returns typical of Venture Capital Investments both Globally and locally.
Grovest further diversifies its investments in Private companies by investing across various stages in businesses in different sectors and business life cycles. According to the Grovest Mandate Grovest VCC can only invest up to 20% of its portfolio in early stage investments.
Early stage investments typically are seen as riskier than post revenue investments and hence the reason that Grovest Investment Committee has implemented this criteria in the investment mandate. That being said, Early Stage investments have returned in excess of 10 times money for international Venture Capitalists in the Silicon Valley, USA, Boston, New York and London.
In fact the Section 12 J legislation was implemented as a result of its great success in the United Kingdom. Section 12 J structures are similar to the structures implemented in the UK to stimulate the economy and propel economic growth through job creation and synthetic industry and sector stimulation. VCT’s (Venture Capital Trusts) in the UK (united Kingdom) have developed into a massive market.
A Venture Capital Trust or VCT is similar to what is know in South Africa as a Venture Capital Company. A VCT is an extremely efficient United Kingdom collective investment implemented to provide private equity capital for expanding companies and capital gains to investors in a tax efficient manner. Venture Capital trusts in the UK have become a form of private equity which is publicly traded via the London Stock Exchange. Through VCTs people can invest in underlying investment companies typically not accessible to them. VCT’s in return invest monies in private companies which are not listed. Venture Capital trusts have proved to be very successful.