Frequently Asked Questions (FAQ)

What are the terms for the startup receiving an investment?

Each investment is negotiated separately and uniquely based on the facts for each company, Generally though – 1.) investments are made with YC style SAFEs; 2.) companies must join the StartUpNV non-profit accelerator program, which includes a commitment to donate equity (up to 1%) to the non-profit; 3) common SAFE or side letter terms include a.) information rights, b.) pro-rata rights, c.) MFN, d.) require quarterly board meetings with proper governance, and e.) valuation (cap) that allows for a 50x return (including expected dilution).

What are the LP (investor) terms for FundNV?

FundNV is on our second fund – a $2M pre-seed funding, investing $100k each in 20 promising startups. Our investor terms are industry standard “2 and 20”. Fees are invoiced annually, separately from LP capital contributions, and are donated to the StartUpNV non-profit that provides back-office services.

Who can invest in the fund?

Accredited Investors as defined by the US Securities and Exchange Commission and Nevada Certified Investors as defined in NRS 90.257 in intrastate offerings further defined in NRS 90.530 (Subsection 22).

What is a Nevada Certified Investor?

In the 82nd Legislative Session (2023) the Nevada Legislature passed and the Governor signed AB-75, the Nevada Certified Investor law. It is regulated by Nevada’s Secretary of State.

A Nevada Certified Investor (NCI) is any Nevadan who earns

W2 income at above the Nevada median wage or $100,000 ($150,000 for a couple), whichever is greater – OR –
Has gross sales (1099 or Schedule C) in a business of 2.5 times the Nevada median wage or $200,000, whichever is more.

NCIs may invest up to 10% of their net worth in Nevada startups and other private businesses.

Why is SNV creating an Early-Stage Venture Fund (FundNV Venture)?

The first and successive fund(s) were created to support the StartUpNV mission to create and grow a robust startup ecosystem in Nevada as a means for economic diversification. Providing capital to promising Nevada startups is key to the mission. Supporting fund creation and ongoing administration and expertise to investors promotes investment in our most promising local startups. All administrative fees collected from LPs are donated to the non-profit.

What is the Fund’s Investment Thesis?

FundNV will invest in StartUpNV Member companies in good standing with at least 1 to 2 quarters of performance that meet and/or exceed established goals, with positive sponsor and mentor feedback on coachability, continued scalability and their recommendation to apply for funding. FundNV will generally expect an MVP or beta to be well under way or successfully completed for a member to be considered for an investment.

How will FundNV source deal flow?

FundNV expects that the extensive statewide network of SNV will provide sufficient deal flow.

How big will the fund be?

FundNV 2 will be $1.5M to $2M with first investments in early 2024 and final investments targeted in early 2028.

Who will manage FundNV?

An Investment Committee (IC) selected annually by SNV will act as Fund Lead and make all investment decisions. Administrative support is provided by StartUpNV, including tax preparation, due diligence, software platforms / portals, etc.

How much can I invest?

Member units are priced at $5000 each, with a minimum investment of $10,000 per Limited Partner. Foundation LP’s may invest up to $400k and participate in the Investment Committee.

How much risk is involved?

This segment of Asset Class, early stage startup companies, is considered to be very risky and it is possible for you to lose your entire investment given the very high risk. Prospective investors should give careful consideration to actual and potential risk factors and conflicts of interest discussed in the PPM in evaluating the merits and suitability of an investment in the fund. An investment in the fund, and the portfolio companies securities, involves considerable potential risks including the possible loss all or a material portion of your investment. You should closely review the written FundNV “Risk Factors” noted in the PPM when considering an investment in FundNV.

Why should I invest in FundNV?

First and foremost, we believe our investment thesis, low cost, and risk mitigation will produce an competitive return over time. Additionally, FundNV provides an opportunity to help develop a sustainable startup ecosystem throughout the state of Nevada that historically has been neglected by the venture industry. It is also an opportunity to attract scalable startup business and founders with big ideas to the state and build a more resilient state economy.

What is the maximum initial investment by FundNV that will be allowed per SNV member company?

The maximum total investment from FundNV will be $100,000 per company.

What type of startups will the fund invest in?

FundNV will only invest in StartUpNV member companies working closely with their sponsors and mentors to define and accomplish specific, measurable, relevant and time-limited growth objectives focused on revenue growth through the sale of a product or service. StartUpNV member companies become eligible to pitch to FundNV after a minimum of 1 quarter (90 days) of meeting or exceeding program goals. FundNV expects most investments will be made in companies meeting or exceeding objectives for 2-3 quarters (180 – 270 days).

Where can I find information about this type of investment?

Typical sites that contain information about risks, returns, etc., are the Kauffman Foundation, Angel Capital Association and the National Venture Capital Association. You can find out detailed information about FundNV in FundNV’s Private Placement Memorandum (PPM) on Glassboard. (request access by email)

Once I invest, may I withdraw my funds before the fund is terminated?

No. You should only consider investing if you are comfortable with potentially losing all of your investment — or not seeing any return for at least 7 years — and possibly closer to 12 years. Our clear objective is to earn a substantial return, however investments in early stage companies are risky. While we seek to mitigate that risk by investing in many companies that are known to StartUpNV to have shown a track record of meeting and achieving goals for some time, the investment risks remain very high.

What is StartUpNV(SNV)?

StartUpNV (SNV) is a NV statewide Incubator that helps Founders/Startups to Create, Collaborate on and Capitalize their businesses by providing mentoring and support services.

Can I invest with IRA assets?

Yes, so long as your IRA documentation and Institution allow such an investment.

What type of legal entity is the fund?

It is a Nevada series LLC. Investors are members of the series LLC.

What kind of reporting will I get?

The fund provides quarterly updates.

Can I invest additional money as a Limited Partner with the fund?

Yes, to the extent the Member company seeking funding via the Fund requires additional capital and that Member company allows additional investment for the funds LP’s via a “sidecar” SPV mechanism via Glassboard.

What are the Fund’s fees?

Management fees are 2% and a Carried Interest of 20%. Fund administration is provided by StartUpNV, a partially grant-funded 501(c)3, that engages in economic development and education for entrepreneurs/investors to create and grow a startup ecosystem to diversify Nevada’s economy. All administrative fees are donated to StartUpNV.

What kind of returns can I expect?

As stated, risk in these types of investments are very high and as such returns could be a total loss or in the historical range for early stage ventures of 3x to 5x. Past historical returns for this category of investing are no guarantee of future returns and you should invest only with this understanding.

What if I’m unable to meet a future capital call?

If you do not meet your commitment to future capical calls (including fees) your equity stake will be forfeited. The partnership agreement addresses in detail the terms and conditions of capital calls and investors should be familiar with these terms prior to making an investment in FundNV.

What is the relationship between FundNV and StartUpNV

StartUpNV provides administrative support to FundNV, but they are separate legal entities. StartUpNV is an IRS approved 501(c)3 non-profit. FundNV is a for- profit venture fund formed as a Nevada series LLC.

Equity donations from startups and administrative fees paid by LPs flow to the 501(c)3 nonprofit to support its economic development and education mission, which aims to diversify Nevada’s economy by creating and growing a robust startup ecosystem.