Venture capital funds usually draw their cash from pension funds, university cash, and other institutional sources, but London fund Venrex is turning to ordinary savers to raise its latest pot of investment cash.
Venrex is hoping to raise £1 million on crowdfunding platform Seedrs for its seventh venture fund. Investors will be able to buy a chunk of the fund and share a portion of the return once the cash is invested. The fund has already raised 51% of its total in just over two weeks.
Venrex has invested £26 million into 54 companies during its 12 years of operation, backing the likes of online takeaway service Just Eat, Notonthehighstreet.com, swimming trunk brand Orlebar Brown, and burrito chain Chillango. Venrex claims to have a 20% internal rate of return over the period, the key measure of a private equity fund’s performance.
Crowdfunding in many ways cuts out the VC middlemen when it comes to funding businesses, letting startups access investors’ cash directly. But Venrex targets very early stage startups, which can often struggle on crowdfunding platforms due to low profiles and lack of track record.
Tom Fleming, a partner at Venrex, said in an emailed statement: “We are on a mission to democratise the venture capital investment business and make exciting early-stage investment opportunities available to a much wider investment audience.”