FUNDS
For all the talk about how the new economy is empowering individuals, so far the megabucks IPO spoils have gone mostly to the fat cats who put up venture capital. The rest of us must wait until after a company goes public to get in on the action.
But soon you won't need a Stanford MBA or an address on Sand Hill Road to play the VC game. Through meVC, scheduled to launch this spring, small-fry investors can finance startups, thanks to a $500 million mutual fund and Web site.
In the past, regulations have limited VC investments to high-net-worth individuals ($1 million-plus). meVC routes around the law by pooling investors' dough into a fund called meVC Draper Fisher JurvetsonFund I.
The idea of venture capitalism for the masses would have been laughable a few years ago, but meVC's association with Draper Fisher Jurvetson, one of Silicon Valley's hottest VC firms, gives it a shot of Street credibility. DFJ, which has backed a string of successful startups including Hotmail and GoTo.com, has put $4.5 million into meVC, and DFJ founder Tim Draper will serve as an adviser. The meVC fund will mirror DFJ's investments, so it will benefit from the VC firm's high tech savvy.
Investors with an annual income and net assets exceeding $50,000, or simply net assets over $150,000, can buy into the fund with as little as $5,000. Shares, which will debut at $20, will be converted into a closed-end fund that will trade on the New York Stock Exchange. Individuals can invest through traditional brokers and online trading outfits. meVC's Web site will track the fund and provide information about portfolio companies.
Before you cash out your retirement savings, though, it's worth noting that only 1 in 10 VC investments sees a return. It's the big hits that make firms like DFJ outpace Standard & Poor's index by a wide margin; market watchers will recall that Draper's $3 million investment in Hotmail grew into a whopping $400 million. Also, as a small-timer, you'll miss out on traditional VC fringe benefits like corporate boat rides and exclusive IPO parties.
meVC: www.mevc.com.
NEW MONEY
Small-Time Angels
Dot-Commodity Exchange
Sighs and Whispers
