Frequently Asked Questions

  • We invest in SaaS or tech enabled businesses, with proven revenues, with valuations between $2M and $10M. We sometimes invest outside of those constraints, but that’s our focus.

  • No, SSV is an industry agnostic investor. Historically, tech is where we are most comfortable and have the most of experience. However, that does not mean that non-tech industries are excluded.

  • We tend to focus on early stage (preseed and seed), but are open to any interesting investment opportunities no matter the investment stage. 

  • Most venture groups charge some form of fees to do what they do. A typical fund would charge 2/20, or stated another way 2% and 20%. What they are referring to is 2% fees on capital invested, and 20% of any returns the investment earns. Some groups charge actual expenses instead of fees, and just pass them through at cost. Some firms charge both fees and pass through expenses. Some angel groups also charge an annual membership fee. 

    At SSV, we charge no membership fees, and we only charge a 1/10. The 1% fees are calculated as 1% of the amount you invested - for a maximum of 5 years. Said another way - 5% of your invested capital on a given deal. So if you invest $10k, we'd also assess an additional $500 for management/expense fees. We use this money for (tax, legal, software, etc.) related to that deal. If the SPV lasts more than five years (and many will) and we run out of money collected via fees, the SSV team is committing to cover those costs ourselves. 

    The 10% in carried interest “the carry” is only on actual returns to you as an investor, and it's after your return of capital invested. For example, let's assume you made a $10k investment in a company, and that company eventually returned $100k. First we would return your original $10k invested capital, leaving $90k in returns. Our success fee would be 10% of the remaining $90k - for a total of $9k. You'd receive a check for $91k (your original $10k, plus the $81k after our carry). If there are no returns, we only ever collected the 5 years worth of fees - which we likely spent on taxes. You win, we win. You lose, we lose. And - of course - we are never showing you a deal where we don't have our own capital invested alongside yours. 

    For reference, we have three different fee structures: 

    • 1/10 = 1% fees (for five years), 10% carry — this is our default 

    • 0/10 = 0% fees, 10% carry — no VCI passthrough

    • 0/0 = 0% fees, 0% carry —  we use this if we founded/operate the company

  • VCI approval refers to companies that are eligible for the Indiana Venture Capital Investment Tax Credit (https://iedc.in.gov/indiana-advantages/investments/venture-capital-investment-tax-credit/overview). If a company is approved to participate in the VCI program, it means we as investors are (likely) eligible to receive Indiana tax credits for our investment. Indiana now has a transferrable tax credit program, so in cases where SSV is eligible to receive those tax credits, we sell them in the market and receive cash for those credits. SSV then uses that case to cover expenses related to running that investment (tax, legal, software, etc). What this means for you as an investor, is that you are not charged up-front fees from SSV (you will still have the 10% carry). But it also means you won't personally get the passthrough of those VCI credits.

  • SPV stands for Special Purpose Vehicle. It's a fancy way of saying we set up a new LLC for each investment by SSV. You invest in the new LLC operated by SSV, and that LLC invests in the company we are looking to invest in. We do this for a handful of reasons: 

    • This way the company we are investing in doesn't get 50 individual investors on their cap table, who they have to run down for signatures, approvals, etc. They just get the SSV LLC on the cap table, and I (or one of the other SSV partners) represent that LLC on behalf of all investors. 

    • You can remain anonymous. Many of our investors view this as a feature. They don't want everyone in the market to know they are an active investor, they don’t want calls from founders asking for random introductions, etc. In some cases we do have SSV investors offer to assist the company in situations where the SSV investor has domain relevant domain expertise, relationships or is just interested in providing advice to the team. Providing this “value added” resource to the companies we invest in is an added bonus for the company when it happens.    

    • The SPV structure allows us as a group to pool our investments to clear investment minimums in the round. If a round has a $100k investment minimum, and none of us individually want to write a $100K check, we can add up ten $10K checks or twenty $5K checks to reach the minimum. 

    Want to dig deeper on SPVs? A good resource is: https://www.vcstack.io/blog/what-is-a-special-purpose-vehicle-spv

  • It's important to recognize that almost none of the investments we offer through SSV should be considered liquid assets. These are not publicly traded companies, and these investments have no (to seriously limited) marketability. You should not make an SSV investment unless you are comfortable with that money being tied up and unavailable for anywhere from five to fifteen years. This is the nature of “early stage” (angel, pre-seed, seed stage) investing. We (SSV) often have little to no say in when we get our money back. When we invest, we are along for the ride. 

    That said, here are the scenarios when you can/will get your money back: 

    • The company does distributions to equity (dividends). In this scenario, you get money back slowly over time. The other exit options below would all still be in play. 

    • The company has an exit / liquidity event and there's a return to investors. This could happen all at once, or over an earnout period. In some cases an exit could also include debt financing of some sort, or other company stock. So there may be multiple milestones over time for payment/returns.  

    • The company agrees to do a share buy back / redemption of some sort (either partial or total) before a liquidity event occurs. 

    • An investor in a later stage round (Series A or B for example) offers to buy out earlier angel investors at some sort of agreed-upon premium.

    • We (SSV) agree to engineer a private sale inside of our SPV between a party that wants to sell and a party that wants to buy at a pre-agreed upon price; but this can be very tricky to do fairly if multiple investors want to sell more than the buying party wants to buy. We have not done this yet, and hope we will never have to.

  • SSV members must be accredited investors (according to SEC rules). SSV members typically have significant assets to invest with the objective of building a portfolio of angel investments.

    If you’d like to explore membership, shoot us an email at info@startsomethingventures.com and one of the partners will connect with you to explain how SSV works and assess fit.