What Is the Appeal of iSelect to Investors?

I spent my career representing companies that were raising capital and funds that were investing capital in those companies.

And, I think the key thing that was the light bulb that came on for me, for iSelect, and what was the fundamental discovery that gave rise to our company, was that instead of focusing on the people who were trying to raise money, instead of focusing on the people that already had money to invest and were already investing that money, the way to really grow this area was to focus on the investors who never had access to this asset class. Who never had the opportunity for these types of investments that have asymmetrical growth opportunities, but who have the money and the capability to actually make the investments if you made it available to them.

So, when you have a background in venture capital, one thing that’s obvious is that it’s not easy. Doing the diligence on a company, 120 hours of diligence is a number, but it’s a lot of work. And it means that you have to have the time, and the effort, and the resources to really get in and understand what a business is about, or else you have a substantial likelihood of losing your money.

I don’t want to minimize it and say, “You can’t lose money in our portfolio,” too, but if you don’t do diligence on a company and make an investment, it’s almost the surest way possible to lose that money.

So, we had to package that process up and make it where it could be something that could be repeated in a way that made this available just to your average investor. And that was the magic, the science of iSelect, was the effort that we put into building a platform that can do this sophisticated level of diligence using modern technology, using modern resources to information, using the internet and databases, and everything else we could to streamline the process and make it where it’s easier to do and easier to access for the investor in a way that they can really come in and have a chance to get into this asset class.

The other thing we had to do was come up with a legal structure that enabled them to get into this in a way that made sense financially for them. So, if you typically want to go into venture capital, you’re looking at, to get into a capital venture fund, anywhere from a $250,000 to $1,000,000 or more investment just to get into one fund. If you’re looking at building a diversified portfolio of companies that are startup stage companies, you’re probably at a $50,000 minimum investment in each one. So, if you want ten companies, a reasonably diversified portfolio, that’s $500,000 of investment.

Most people don’t have the time or the money to go and invest in this asset class, but they would if you made it easier for them and gave them bite sizes they could actually get real diversification under.

That was the magic of iSelect. We came up with a diligence process that was easy for people to access, and see what we’ve done, and understand our companies, and that also is comprehensive in a way that eliminates all of the risks that you would have, all of the risks you can eliminate in investing in a company at this stage of investment. It also allowed people to take investments as low as $5,000 and put those in. So that for $50,000 to $100,000 you could create a diversified portfolio.

And, so by focusing on those investors needs, and figuring out the structure, and the systems, and the processes to address those concerns, that’s what’s truly unique about iSelect and it’s what makes our fund different. If we focus on the smaller investor like that versus the large funds, the large institutional investors, we’re focusing on bringing venture capital down just to ordinary accredited investors.

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.