How many startups should you invest in?

James Sore, Chief Investment Offi cer, SyndicateRoom

Investment Opportunities 17

Early-stage investing has a repu- tation for being highly risky, and for good reason: the majority of startups fail in their fi rst fi ve years. But industry data shows that investing in startups can also be highly profi table — if you’re smart about it. According to T e Invest-


liquidity, sectors, sizes and types has a reduced chance of containing highly

correlated Fund Twenty8 investments,

where macro factors such as housing market changes, unemployment or general market


is currently open and will close to investment on the 25 September 2018

ment Report by NESTA and Intelligent Partner- ship, an early-stage portfolio should contain at least 28 invest- ments in order to have a 95% chance of securing at least one 10x invest- ment. But that’s not all you can do to maximise your chances of bagging a successful exit.

The only free lunch in fi nance A broad portfolio of investments spanning diff erent stages, levels of

can aff ect all invest- ments in one fell swoop. By building a portfolio of uncorrelated invest- ments across multiple sectors, you reduce your chances of a single sector

experiencing a negative change and it bringing down your entire portfolio; think, for example, of how a shift in oil prices can aff ect a vast number of investments within that sector. SyndicateRoom has combined

this diversifi cation principle with NESTA’s magic number to bring you a new kind of invest- ment fund.

Fund Twenty8 Fund Twenty8 is the fi rst and only fund to automatically build you a diversifi ed portfolio of at least 28 EIS-eligible early-stage investments, across a broad range of sectors, targeting a return of over 20% IRR including up to 30% EIS tax relief. • 28+ EIS-eligible investments per fund • Up to 30% EIS tax relief • Unparalleled cross-sector diversifi cation

• Targeted IRR of 20%+

Nested within SyndicateRoom, the UK’s premier equity investment plat- form, Fund Twenty8’s algorithmic approach draws on data from the investment decisions of thou- sands of

sophisticated and high-

net-worth investors to determine which companies to back. T e fund has raised a total of £7.9m from 377 investors to date.

Risk warning: Investing in early- stage businesses involves risks, including illiquidity,

lack of divi-

dends, loss of investment and dilu- tion, and it should be done only as part of a diversifi ed portfolio. Syndi- cateRoom is targeted exclusively at sophisticated investors who under- stand these risks and make their own investment decisions. Tax relief depends on an individu-

al’s circumstances and may change in the future. In addition, the avail- ability of tax relief depends on the company invested in maintaining its qualifying status. Past performance is not a reliable

indicator of future performance. You should not rely on any past perfor- mance as a guarantee of future investment performance. Full risk warning available at risk-warning. T is page has been approved as

a fi nancial promotion by Syndicate Room Ltd, which is authorised and regulated by the Financial Conduct Authority (No. 613021). Invest- ments can be made only on the basis of information provided in each respective investment opportunity.

“I wanted to get exposure to

early-stage equities, but was unsure how to go about diversifying my investments and which companies to choose. I invested in Fund Twenty8 because it allows me to invest in EIS-qualifying opportunities while spreading the risk across lots of companies,” said Emma Collins, who invested in Fund Twenty8 in 2016.

Fund portfolio Last year’s Fund Twenty8 built a portfolio of 32 EIS investments span- ning 10 sectors. • 233 investors took part • Invested a total of £4.55m • Diversifi ed over 32 investments • Across 10 sectors

I wanted to get exposure to early- stage equities, but was unsure how to go about diversifying my investments and which companies to choose. I invested in Fund Twenty8 because it allows me to invest in EIS-qualifying opportunities while spreading the risk across lots of companies Emma Collins, Fund Twenty8 investor

Get the ultimate in

startup diversifi cation:

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