Understand Venture

Venture capital plays a special role in modern investors' portfolios because it offers returns that do not follow the broad stock markets, thus providing strong diversification.

In recent years, venture has been the driving force behind the creation of the most valuable companies in the world, the so-called "Magnificent 7". These are all venture funded. In comparison, only one of these companies (Microsoft) was represented on that list 20 years ago.

For investors, venture is therefore about risk assessment, but also about finding the best funds and becoming part of the next big growth story.

Read more in our White Paper.

Some of the world's most successful investors are the American university endowments - the so-called Endowments. Yale pioneered and is today known for its unique model where venture capital is considered a separate asset class. Here, venture funds are given a permanent place in the portfolio because they contribute low correlation to the broad equity markets and thus increase diversification. At the same time, venture funds provide access to early exposure to the technology companies of the future.

The Yale model has set the standard for how institutional investors can create strong, long-term returns through the strategic use of venture capital.

Venture capital is riskier and more illiquid than traditional investments, but it is also a gateway to top-level innovation. 

Venture funds spread their investments across hundreds of companies and focus particularly on early-stage technology and life sciences. This is where the potential lies. 

Today, much of the value creation happens before companies reach the stock exchange. Recent legislative changes in the US have even allowed companies to remain private for longer, meaning that investors via venture funds can access growth and innovation long before companies go public.

Read more in our White Paper.

The challenge is that not all funds deliver strong results. This means it's crucial to access the most coveted funds, where talented teams have repeatedly proven they can spot and develop future winners. 

Behind each breakthrough are thousands of reviewed cases, but only a fraction make it through the eye of the needle.

"Persistence of performance" is a key term in the industry that refers to the phenomenon where the best performing funds deliver superior returns over quite long periods of time. These funds attract the most promising entrepreneurs and are known for their ability to deliver high returns again and again.

By looking at returns over time, it becomes clear that venture funds can outperform the rest of the market. Analyses show that over the past 20 years, the most attractive risk-adjusted returns in private equity investments have been achieved in the top quartile of fund-of-funds, even ahead of the best private equity funds.

In Nordic Blooms White Paper you can find in-depth graphs and analyses that explain this development.

Investing in venture funds naturally carries a higher risk, especially when it comes to early stage-funds where uncertainty is greatest. An effective way to deal with this is through a fund-of-funds structure that spreads investments across multiple funds. This gives access to a broader portfolio and reduces risk while increasing the chance of attractive returns.

At the same time, it opens the door to funds that are usually difficult to get into on your own - either because the minimum investment is very high or because access is limited to institutional investors.

Nordic Bloom offers a cost-effective fund platform designed to give investors access to some of the world's leading venture funds. The platform is AIFM authorised and EU/EEA compliant.

For more than 12 years, we have opened the door for over 100 investors to both single funds and fund-of-funds, combining experience with unique access to the market's most attractive opportunities.

Are you curious how we can help you enter the world of venture capital?

Use the contact function on this page - we look forward to the dialogue.