Understand the data that drives the Access EIS model
SyndicateRoom began its analysis of venture returns back in 2016, looking into patterns within the market that could boost investment strategies.
In 2019, after years of development and data analysis, we launched our first fund based on this market approach to portfolio building. That fund is called Access and we have invested in over 75 companies using this novel approach.
This white paper aims to explain how we threw out the rulebook when it comes to venture capital investing.
We wanted to build a fund from first principles. We used empirical evidence to design almost every aspect of the fund, seeking to reinvent venture investing to create more consistent, market beating returns in a structured manner.
What's in the white paper?
The venture industry has historically been typified by oracle-style investors. These are investors who raise capital on the basis of their ability to find and pick the top performing early stage companies, investing in just a few per cycle, then doubling down on the winners. Much like the pre-ETF listed equities space, these actively managed funds dominate the landscape – despite their highly variable results that could be the result of luck.
VCs only pick winners in 2.5% of their investments.
In this white paper, Syndicate Room CEO Graham Schwikkard explores an alternative approach to venture investing, one which attempts to consistently capture the returns of the entire market. This approach is built on four important elements that we have derived through various analyses, including a statistical Monte Carlo approach:
- The venture market has shown consistent growth year on year.
- A portfolio of 50 investments a year can replicate this growth, minimising variation.
- Access to the top 20% of the market has a marked impact on portfolio growth.
- On average, fixed ticket investments show better returns than variable tickets.