Varia Ventures Management Company, LLC (collectively with its affiliates, subsidiaries, managers, members, personnel, advisors, partners, related parties, officers, employees, consultants, representatives, successors and assigns, and their respective affiliates and related parties, the “Manager”), provides a website (the “Website” or “Platform”) where entrepreneurs and companies with exciting business opportunities (each, a “Startup” and collectively, “Startups”) have the opportunity to meet investors (each, an “Investor” and collectively, the “Investors”), institutions, strategic partners and service providers (institutions, strategic partners and services providers are sometimes referred to individually herein as a “Partner” and collectively herein as “Partners”) who offer capital and other critical resources. Each of the foregoing persons or entities, the general public, and each person that such persons allow to access the Website through their respective accounts, is sometimes hereinafter sometimes referred to as “you” or a “user”.
The information that the Manager provides on the Website is for your information only. Some information provided may not be current, or may have changed since the last time you viewed or downloaded it. All information is subject to change without notice. The Manager does not in any way represent or warrant the accuracy or reliability of any of the information provided, and all information is provided subject to the disclaimers and limitations of liability set forth below.
In order to access or use services on the Platform, you must become a registered user by creating an account and choosing a password that you will use to access your account. By registering, you represent and warrant to the Manager that all registration and other information you submit to or through the Website is true and complete, and you agree to immediately provide corrected information if any of the submitted information shall no longer be true and complete. You confirm that you are at least eighteen (18) years of age.
You are solely responsible for safeguarding the confidentiality of your password and for use of your account and password, whether or not authorized by you. Although the Manager will not be liable for any of your losses that are caused by any unauthorized use of your account, you may be liable for the losses of the Manager or others due to such unauthorized use. If you suspect any unauthorized use of your account or unauthorized access to your password, please contact the Manager immediately at email@example.com. You do not have the right to transfer your account to any individual or entity and the Manager reserves the right to remove or reclaim your account if the Manager determines, in its sole discretion, that such action is appropriate under the circumstances. You agree that you will not create an account for any individual other than yourself (or, if applicable, the entity you represent).
As a registered user, you agree that the Manager may electronically provide you (via email or postings or links on the Website) with invoices, documents, notices, reports, statements, Form K-1s and other information required or permitted to be provided to Investors pursuant to any law or regulation or written agreement with the Manager, and other communications regarding the Website, the services and/or your use thereof, your investments, as well as special offers, promotions, commercial advertisements, marketing materials, etc. You agree that the Manager may send the
foregoing communications to you via your account or any email address(es) which you provide to the Manager as part of your account registration or otherwise.
You agree to comply with all Platform Rules (as defined below) at all times.
Users of the Website may open an account as (1) a “Startup” (who is looking for services and/or introductions to potential Investors and Partners), (2) an Accredited “Investor” (who is looking to invest in a Startup on our Platform, and must complete our Accredited Investor questionnaire and submit certain documents verifying such status), and/or
(3) a “Partner” (who provides information about its business and resources) and/or they may view Content (as defined below) made available to the general public.
Startups. If you are a Startup, you are welcome to apply for funding and access to the other resources on our Platform by registering as a “Startup,” uploading information about your business, including confidential information, which you are prepared to make available to Partners and Investors on the Website and/or taking our “QuikVet™” phase one of due diligence (discussed in more detail in Section IV, below). Company Information (as defined below) that you provide in the “Startup Profile” will be shared with Partners and Investors on the Platform and certain of that information, including but not limited to, an executive summary of your business, key highlights regarding your business and finances, the identify and credentials of your management team, the identify of your lead investors, and the size, type and valuation of a current offering, etc., may be made publicly available. Company Information that you provide during the diligence process may be shared with Partners or Investors on the Platform who have expertise in your business or industry or provide services that you indicated you need in the registration process and/or in connection with capital raising activities. We cannot guarantee that Partners and Investors who see your Company Information do not distribute that information. We also cannot guarantee that there will never be a software bug or a hacker attack that allows unauthorized viewing of Company Information or that Investors or Partners actually fit within the categories they have identified themselves under.
You understand and agree that, at a minimum, you must meet the Manager’s investment criteria available here in order to be eligible to continue to the Manager’s later stages of diligence and, eventually, funding on the Platform (discussed in more detail in Section IV, below). We strongly encourage you to review this criteria before you submit your application with the $100 application fee, which is non-refundable.
As a condition to receiving investments on the Platform, and in order for the Manager and the Platform to comply with applicable securities laws, rules and regulations, you agree that if you seek and obtain investments from Persons who are not Investors registered on the Platform, you will immediately notify the Manager of the identify of each such outside investor and provide written proof to the Manager, in a form acceptable to the Manager in its sole discretion, that such Person is an Accredited Investor (as defined below). You are solely responsible for verifying the Accredited Investor status of outside investors and you agree to indemnify, defend and hold harmless the Manager and its affiliates from and against any and all claims, suits, proceedings, losses, damages, costs, expenses, etc. that it or they may incur in connection with your failure to verify the Accredited Investor status of any outside investor or if an outside investor is not an Accredited Investor. For purposes of clarity, Startups that do not receive an investment (in cash, services or other assets or properties) from Partners or Investors on the Platform, do not need to comply with this provision.
Investors. The only people who are authorized to create Investor accounts on the Website are Accredited Investors who personally, or in conjunction with their advisors, are capable assessing the long-term business prospects of early- stage private companies. Investors must qualify as an Accredited Investor (as defined below) and understand the myriad of risks of investing in private companies, particularly early-stage companies, including the high likelihood of loss and long period of illiquidity. You agree to carefully review, with your counsel and other advisors, the Risk Factors set forth below before making an investment in any Startup.
Investors may register as such on the Platform by providing basic personal information regarding their identity and investment interests, as well as their contact information. Additional information and documentation to verify your identify and ensure that you qualify as an Accredited Investor will be requested at the time you wish to invest in a Startup. This information may include your or your affiliated entity’s legal name, EIN number, place of residence or incorporation, information concerning your status as an Accredited Investor, etc. We may use a third party service provider to obtain this information from you. The Manager reserves the right to terminate your use of the Platform at any time should you fail to provide it with any requested documentation in order to ensure that the Manager remains compliant with applicable securities laws, rules and regulations at all times. You will also have the opportunity to select what kinds of Startups you would like to see. We do not promise to offer as investment Startups that meet your criteria, nor can we promise that all Startups we introduce you to will actually satisfy your criteria, but we will try.
In the course of participating in investment opportunities through the Website, you may receive Company Information. You agree to keep confidential and not disclose, or use for any purpose other than evaluating an investment opportunity, non-public Company Information that you receive through the Website or from the Manager.
Partners. The only people who are authorized to create Partner accounts on the Website are those who are invited to do so by the Manager. We have three categories of partners: Strategic Partners, Institutional Partners and Resource Partners.
Strategic Partners. Our Strategic Partners have expertise in a variety of industries, including medical devices, hospitality, technology, life sciences, women-owned businesses, minority-owned businesses, etc. Depending on their particular industry, expertise and interest, they work closely with us and our Startups, using their platforms to provide support in a variety of ways, such as insight into potential improvements, market dynamics, strategy, introductions to third parties, etc. Through their participation on the Platform, Strategic Partners are able to (1) forge early relationships with companies that might, in turn, develop into promising investments, joint ventures, acquisitions and other forms of collaboration, (2) participate in and support our 10-step due diligence process on companies that fit within their business criteria, (3) drive brand awareness through advertisement of their business on the Platform, (4) host industry events to gain significant presence within the local entrepreneurial ecosystem, and (5) have the opportunity to co- invest with us and other investors in exciting companies, both inside and outside of their industries.
Institutional Partners. Our Institutional Partners provide relevant expertise to support our Startups by tapping into their faculty members, students, donors, alumni, emerita, researchers (including in fields such as business, law, engineering, etc.) and others as they work closely with us and our Startups. In addition, many of our Institutional Partners have important technologies, equipment and resources that also help benefit our Startups. Through their participation on the Platform, Institutional Partners are able to advance their non-profit missions by (1) leveraging our partnerships and resources to help identify ideas or companies that meet the Institutional Partner’s investment or grant criteria, and (2) building collaborations between our partnership network and their own in-house resources, to provide capital, support such as R&D capabilities, management, legal, regulatory, etc., mentorship and educational resources to Startups or otherwise position select technologies for licensing opportunities. Institutional Partners also benefit by enhancing their brand awareness in the Western New York and Southern Ontario entrepreneurial ecosystems as well as highlighting their own educational offerings, including through links to educational modules, resources, and helping to host events.
Service Partners. Our Service Partners have deep expertise in law, accounting, finance and staffing/human relations. They work closely with us and our Startups in areas of their respective expertise and interest, using their platforms to provide critical professional services support. Through their participation on the Platform, Service Partners have the opportunity to (1) forge early relationships with companies that might, in turn, develop into promising business opportunities, (2) participate in and support our 10-step due diligence process on companies that fit within their business criteria, (3) drive brand awareness through advertisement of their business and service offerings on the Platform, and (4) have the opportunity to co-invest with other investors in exciting companies.
Partners who have been invited to participate on the Website may create profiles identifying their business interests, service offerings, past projects and other information that may be relevant and of interest to Startups. Profiles created by Partners will be publicly available. Partners will also have the opportunity to select what kinds of Startups they would like an introduction to. We do not promise to make introductions to all Startups, nor can we promise you that any Startups we introduce you to will be interested in working with you. In addition, we cannot promise that all Startups we introduce you to will actually satisfy your business criteria, but we will try.
In the course of participating in investment opportunities through the Website, you may receive Company Information. You agree to keep confidential and not disclose, or use for any purpose other than evaluating a business opportunity, non-public Company Information that you receive through the Website or from the Manager.
You agree to carefully review, with your counsel and other advisors, the Risk Factors set forth below before registering as a user on the Platform, entering into any business or other relationship with a Startup or making an investment in any Startup.
General Public. Certain portions of the Website will be visible to users who have not signed up as Startups, Investors or Partners. Those users, nevertheless, are bound by this agreement. Startups should be aware that information they provide in the “Startup Profile” will be visible to everybody.
Definitions. “Content” means any information, text, graphics or other materials uploaded, downloaded or otherwise available on the Platform.
User Content. You retain the ownership of all Content you submit, post, and display or otherwise make available on the Platform. By providing Content to or via the Website, you grant the Manager a worldwide, non-exclusive, royalty- free, fully paid right and license (with the right to sublicense) to host, store, transfer, display, perform, reproduce, modify for the purpose of formatting for display, and distribute your Content, in whole or in part, in any media formats and through any media channels now known or hereafter developed. By providing Content to or via the Website to other users of the Website, you grant those other users a non-exclusive license to access and use that Content as permitted by this User Agreement and the functionality of the Website.
Requirements related to User Content. By accessing the Website as a user, you make the following promises to the Manager: (1) that you will only provide us with Content that you have a right to provide us and to allow us to display on the Website; (2) that you have sufficient legal rights to all copyrights, trademarks, trade secrets, intellectual property or other materials provided by you for display on the Website; (3) that you understand that any other Content you find on or with use of the Website is the sole responsibility of the person who provided such Content and not of the Manager, who will have no liability or responsibility therefor; (4) that you understand the Content you provide may be republished and if you do not have the right to submit Content for such use, you may be subject to liability, and the Manager will not be responsible or liable for its use of any of your Content in accordance with this User Agreement; (5) that you understand that we do not provide endorsement, support, representation or guarantee the completeness, truthfulness, accuracy or reliability of any Content or communications posted on the Website or endorse any opinions expressed via the Website; (6) that you understand that by using the Website, you may be exposed to Content that potentially could be offensive, harmful, inaccurate, or otherwise inappropriate, and that you shall have no claim against the Manager for any such material; (7) that you understand that the Website may include advertisements or other similar marketing items, which may be related to Content, or other information, and that you have no claim against the Manager for the placement of advertising or similar content on the Website or in connection with the display of any Content or other information on the Website; (8) that you will not claim any ownership rights in any material, software or other intellectual property displayed on, published by or otherwise available through use of the Website, other than Content, software or intellectual property that you own or otherwise have rights to; (9) that you will not copy or distribute Content except as specifically allowed by this User Agreement; (10) that you will not use any Content, or other information acquired through your use of the Website, for commercial or investment activity outside of the Platform; (11) that you will not claim any right to access, view or alter any source code or object code of the Manager; (12) that you will keep confidential and not disclose any Content that you receive through the Website that the Manager has provided in connection with a potential business or investment opportunity; (13) you understand that the Manager is under no obligation to edit or control Content that you or other users post or publish, and will not be in any way responsible or liable for Content; and (14) you understand that the Manager may at any time and without prior notice, screen, remove, edit, or block any Content that in its sole judgment violates this User Agreement or is otherwise objectionable.
Manager Content. This Website is owned and operated by the Manager. Any claims or concerns regarding the Website should be addressed to firstname.lastname@example.org. You acknowledge and agree that the Website contains information, data, software, photographs, graphics, text, images, logos, icons, typefaces, audio and video material, and/or other material protected by copyrights, trademarks, or other proprietary rights, and that these rights are valid and protected in all forms, media, and technologies existing now or hereinafter developed. The Content is our property or that of our Startups, Partners or licensors and is protected by U.S. and international copyright laws, which you agree to comply with.
DMCA Notification. If you are a copyright owner or an agent thereof and believe that any Content made available via the Website infringes upon your copyright, you may submit a notification pursuant to the Digital Millennium Copyright Act (“DMCA”) by providing the Manager with the following information in writing: (1) identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works are covered by a single notification, a representative list of such works; (2) identification of the claimed infringing material and information reasonably sufficient to permit us to locate the material on the Website (providing the URL(s) of the claimed infringing material satisfies this requirement); (3) information reasonably sufficient to permit the Manager to contact you, such as an address, telephone number, and, if available, an email address; (4) a statement by you that you have a good faith belief that the disputed use is not authorized by the copyright owner, its agent, or the law; (5) a statement by you, made under penalty of perjury, that the above information in your notification is accurate and that you are the copyright owner or are authorized to act on the copyright owner’s behalf; and (6) your physical or electronic signature. The contact information for the Manager to receive notifications of claimed infringement is: Varia Ventures Management Company, LLC, 50 Fountain Plaza, Buffalo, NY 14202; email: email@example.com.
Links to Third Party Sites. The Website may contain links to independent third-party websites and/or services (collectively, “Linked Sites”). The Linked Sites are not under the Manager’s control, and the Manager does not endorse, is not responsible for and shall have no liability to you with respect to the business practices, privacy policies or content, materials, information, merchandise, products or services displayed, featured, mentioned, advertised, distributed or sold on or through such Linked Sites. By accessing a Linked Site, you may be disclosing your private information and be exposing yourself to content that you find disturbing. It is your responsibility to read and understand the privacy, membership, payment and other policies of the Linked Sites and to determine on your own whether or not you will have any interaction with any of the Linked Sites. The Manager encourages you not to provide any personally identifiable information to any Linked Site unless you know and are comfortable with the party with whom you are interacting. You agree that the Manager is not responsible for and shall have no liability to you, with respect to merchandise, products, and/or services advertised, featured, mentioned, sold, distributed, displayed or linked on or through the Website or the services.
V. Investment Process
The Platform has been designed to function through the following 10 Step Investment Process, which the Manager reserves the right to modify at any time, and from time to time, without notice:
Step 1 (Submission): A Startup applies for investment capital, and potentially other resources, by submitting certain required information, including its pitch deck through a portal on the Website. The cost for submitting an application is $100. Applicants must “check the box” indicating their agreement to this User Agreement.
Step 2 (Automated Diligence): The Startup’s application is initially diligence through an automated diligence process developed for the Platform, which we refer as the “QuikVet™.” Such process is designed to provide a baseline evaluation of the Startup’s investment potential based on an assessment of the basic business opportunity, financials and the Startup’s founder(s) or management team. Our automated diligence process incorporates a scalable, turn-key Cloud software solution that uses artificial intelligence informed by modern behavioral science and predictive analytics to identify high-potential entrepreneurs for success and team fit, which the Manager has licensed from Plum, Inc.
Step 3 (Review): The Manager reviews all completed applications that satisfactorily meet the QuikVet™ criteria, which has been designed to assess whether the Startup meets the Manager’s investment criteria, available here (“Investment Criteria”) and evaluates whether the Startup merits additional diligence as described below.
Step 4 (Industry Expert Review): Applications selected by the Manager are provided to an industry expert, who may be Partner or Investor, for further review and feedback.
Step 5 (Meeting): If the industry expert’s feedback is sufficiently positive in the Manager’s discretion, the Manager will seek to meet with the Startup to gain additional perspective on the investment opportunity and to (1) discuss the requirements for the Manager’s second phase of diligence (standardized diligence), and (2) confirm that the Startup’s agreement to the Manager’s standard investment terms and conditions generally in the form available here (“Standard Investment Terms”) (excluding valuation which will determined through the Manager’s standardized diligence process, described below).
Step 6 (Standardized Diligence): The Startup is asked to deliver responsive documents and other information to allow the Manager to complete its standardized diligence of the Company. This standardized diligence may include an assessment by the Manager of the following (among other things):
- Financial pro formas
- Customer traction and pricing model
- Strategy (which may include (1) assessing patent protection, (2) reviewing barriers to entry, (3) reviewing competition, and (4) etc.)
- Stage of product development
Step 7 (Initial Valuation): Following the Manager’s review of all responsive documents and other information, pursuant to which it will confirm that the Startup meets the Investment Criteria in the Manager’s discretion, the Manager will determine an initial valuation of the Startup, and seek the Startup’s agreement to such valuation, together with the other Standard Investment Terms.
Step 8 (Launch on Website): The Manager will generate a report in respect of the Startup and post it on the Website to seek investment interest in the Startup. This post may also include information provided by the Startup to the Manager in the diligence process. Each Investor that, in its sole discretion, is interested in investing in a Startup, may submit a non-binding commitment of an amount to be determined by such Investor (but not less than $10,000 net) to invest in the Startup, contingent on the satisfactory completion of the Manager’s third phase of diligence (validation), in the Manager’s discretion, and the Manager’s and the Startup’s agreement on a final valuation and other investment terms and conditions.
Step 9 (Validation): Provided there is sufficient investment interest under Step 8, above, the Manager will complete its final stage of diligence (validation). This phase may include customer and other third party validation, tours of manufacturing facilities, discussions with buying agents, quality assurance, etc. Following the completion of this diligence phase, the Manager may post an updated report that will be available for review by Investors and Partners. If the results of the Manager’s phase three diligence and the final valuation are satisfactory to the Manager, the Manager will prepare the documents to complete the investment based on the Standard Investment Terms and the final valuation, generally in the forms available here (the “Investment Documents”).
Step 10 (Closing): The Manager will form a separate investment vehicle (an “Investment Vehicle”) for the specific purpose of investing in the Startup. The Manager intends to structure the Investment Vehicles as limited liability companies, pursuant to a limited liability agreement, generally in the form available here. Each Investor that is participating in the investment will be instructed to sign the Investment Documents and forward their capital contributions directly to a bank or other financial institution at which the Investment Vehicle maintains an account. Offerings by Investment Vehicles will generally remain open for a period of ninety (90) days following launch on the Website, however the Manager will have the option to shorten or extend that period in its sole discretion.
Investment Criteria. In general, investments posted on the Website will meet the Investment Criteria available here; however, the Manager may post investments that do not meet the Investment Criteria in its discretion.
Investment Minimum. Investors have the ability, but not the requirement, to select companies that interest them and may make investments one at a time. Investors are under no obligation to invest in any company on the Platform, however, should an Investor choose to do so, the minimum investment is $5,000 (net of the Investor’s pro rata share of Expenses described in Section VII below) in any company financing, and subject to the Manager’s right to require a larger investment minimum or smaller investment minimum with respect to certain Startups, in its sole discretion.
Investment Opportunities. While the Manager will endeavor to post five (5) to fifteen (15) investment opportunities per year, it may post fewer (or no) investments or more investments, as it may determine in its discretion.
Investment Vehicles. The Manager intends to form a separate Investment Vehicle for each investment in a Startup in order to ensure the Manager’s and Platform’s compliance with applicable securities laws, rules and regulations.
Allocation of Investments. In general, all Investors who select a company in which to invest will have the right to invest their desired investment amount, however, if an offering is over-subscribed, Investors will have the right to invest their pro rata share in proportion to their respective desired investment amounts. No more than 100 Investors will be permitted in any one Investment Vehicle in order to ensure that such Investment Vehicle will be exempt from registration under Section 3(c)(1) of the Investment Company Act of 1940, as amended from time to time (the “Investment Company Act”).
Investment Terms and Conditions. The terms and conditions of each company financing will be governed by the terms and conditions set forth in the Investment Documents for the applicable Investment Vehicle and Startup, which may vary depending on the stage of the company and the type of financing (i.e., seed, series A, etc.), template forms of which are available here. You understand and agree that while the Manager has tried to standardize the terms and conditions of its Investment Vehicles and the terms and conditions pursuant to which such Investment Vehicles invest in Startups, it may modify such terms and conditions for a variety of reasons, in its discretion. As a result, prior to making any investment, you agree, together with your own legal, financial, investment, tax and other business advisors, to carefully review and assess the terms and conditions set forth in the documents that are delivered to you by the Manager in connection with the closing of such investment, which such terms and conditions shall supersede and control in all respects over those set forth in the template Investment Documents that are publicly available on the Website.
Distributions. In general, and subject to the terms and conditions contained in the final Investment Documents that you receive in connection with the closing of an offering, including the Manager’s right to first recoup certain expenses as described in more detail in Section VII, below, distributions will be made at the termination of an Investment Vehicle (contemplated to be upon the occurrence of a liquidity event of the underlying Startup) pro rata in accordance with an Investor’s capital contributions to such Investment Vehicle until each Investor has received cumulative distributions in an amount equal to such Investor’s capital contributions to such Investment Vehicle, after which distributions will be made 80% to the Investors that invested in such Investment Vehicle(s) pro rata in accordance with their respective capital contributions in respect of the Investment Vehicle(s) giving rise to such distribution and 20% to the Manager (its “Carried Interest”).
Responsibilities as an Investor. Notwithstanding any diligence or investment reports issued by the Manager on the Platform, you are a self-directed investor who is individually responsible for determining the suitability of your investment decisions. The Manager is not responsible for the investment decisions made by you or on your behalf. The Manager is not responsible for the strategies, actions or inactions taken with respect to your investments on the Platform. The Manager is not responsible for the gains or losses you incur. You assume individual responsibility for determining the suitability of all investment decisions and strategies you make or implement. You must base your investment decisions upon all information reasonably available to you and your own assessment of risks and rewards. You are solely responsible for knowing the rights and terms for all investments you make in any investments on the Platform.
Requirements related to Investments. By accessing the Website, you make the following promises to the Manager: (1) that you will only invest in an investment vehicle through the Website after carefully reviewing and assessing the terms of the investment, including the related private placement memorandum (if any), the Investment Documents, generally in the template forms available here, as finalized as described above, as well as any other information provided to you by the Manager, together with your own legal, financial, investment, tax and other business advisors; (2) that you will use your personal judgement before making any decision to invest or to accept an investment involving what you consider a material amount of money; (3) that you will retain sole responsibility for complying with applicable laws, rules or regulations regarding any transactions, including, and without limitation, the determination of whether you are an Accredited Investor (as defined below) and whether any investment complies with the terms of local law (whether the law of a U.S. state or of any foreign government with jurisdiction of you or any other Investor); (4) that you will not misrepresent your Accredited Investor status; (5) that you will obtain professional advice as is appropriate to protect your interests, including legal, tax, investment, accounting and any other advice; (6) that you have reviewed in detail and have full understanding of the discussion of risks set forth below, and that you are otherwise aware of the risks of making investments; (7) that you will not treat any Content, email or any other information you receive as a result of your access to the Website as a recommendation or representation of any kind by the Manager on which you should rely; and (8) that you will not expect that we will provide evaluations or confirmation or otherwise stand behind any user’s statements or provide recommendations for any investment.
Prohibitions On Investing In Startups Outside the Platform. You agree that you will not use any information or Content acquired through your use of the Platform for any business or investment purposes other than investing through the Platform. More specifically, you agree that you will not invest in an opportunity outside of the Platform while it is seeking funding on the Platform or thereafter.
Risk Factors. Registering on the Platform as an Investor and making an investment in a Startup through an Investment Vehicle involve significant risks, including, but not limited to, those risks set forth below. Each prospective Investor should carefully consider and evaluate such risks prior to subscribing to the Platform as an Investor and making an investment in a Startup through an Investment Vehicle.
Startups. The following fees are applicable to Startups:
- A $100 non-refundable application fee to submit an application for investment through the Platform. We strongly encourage you to review our Investment Criteria to determine if you meet it before you make payment.
- A Startup may elect to engage the Manager to provide certain services to the Startup pursuant to a separate written agreement to be agreed upon by the Startup and the Manager, in their discretion, which may contain an additional fee arrangement between them.
Investors. The following fees are applicable to Investors:
- $5,000 (net of an Investor’s pro rata share of Expenses described below) is the minimum investment in any Startup through an Investment Vehicle, subject to the Manager’s right to require a larger investment minimum or smaller investment minimum with respect to certain Startups, in its sole discretion. You are under no obligation to invest.
- 3% of invested capital, which is drawn down at the time of investment, to satisfy, and to provide a reserve against, your pro rata share of Expenses (as defined below).
- For example, if you elect to invest $10,000 in a Startup, we will require you to fund $10,300 ($10,000 will be allocated to the investment and $300 will be allocated to the Expenses).
- Expenses include but are not limited to, legal and accounting fees and expenses; expenses associated with the Investment Vehicle’s reports; the Investment Vehicle’s tax returns and K-1s; expenses of any litigation or indemnification; any taxes, fees or other governmental charges levied against the Investment Vehicle; and all costs incurred in connection with its organization and offering of membership interests of the Investment Vehicle.
- In addition, you may be charged your pro rata share of certain expenses of the Investment Vehicle that exceed an amount equal to 3% of your invested capital, but such amount(s) shall (1) only be paid or reimbursed from the proceeds received by the Investment Vehicle from a liquidity event of a Startup in which you are invested through the Investment Vehicle and (2) not exceed your pro rata share of such proceeds that may be distributable to you.
- 20% Carried Interest to the Manager after Investors have been repaid their invested capital.
Partners. The following fees may be applicable to Partners:
- $15,000 annual subscription fee, payable in advance. The subscription fee is non-refundable and will automatically renew on an annual basis unless cancelled in advance by the Partner. You can cancel at any time by sending an email to the Manager at firstname.lastname@example.org.
The Manager reserves the right, in its sole discretion, to modify the fees set forth in this User Agreement at any time, and from time to time, for any reason, and without notice; provided, however, that any such modification shall not affect (1) the fee agreements between the Manager and any Person to the extent set forth in a separate written agreement or agreements (such as executed Investment Documents) between the Manager and such Person or Persons or (2) any fees that have already been paid.
VIII. Use of Proceeds
Although the Manager retains the sole discretion to determine how to use the fees that it receives from Startups, Investors and Partners, in general, the Manager intends to use such fees for the following purposes:
- The formation, management and administration of the Manager, including the Manager’s contemplated registration as an Exempt Reporting Advisor under applicable securities laws and ongoing compliance therewith, technology development and ongoing administration of the Website, General Liability and D&O Insurance, personnel, educational content development, event hosting, blogging, program development, PR and marketing, Startup, Investor and Partner relations, general overhead, etc.
- The formation, management and administration of each Investment Vehicle, including all organizational costs and expenses associated with the such vehicles’ formation and investments in Startups, including due diligence; and ordinary out-of-pocket administrative expenses related to the operation, administration or liquidation of the Investment Vehicle, including reports, financial statements, tax returns and meetings.
IX. The Manager
The Manager intends to provide management services to each Investment Vehicle and the Platform. In particular, the Manager will determine whether to form an Investment Vehicle and seek investments in a particular Startup; conduct due diligence, negotiate investment terms; and may appoint representatives to serve on Startups’ boards of directors; determine, on behalf of the Investment Vehicle, when and on what terms to dispose of the Investment Vehicle’s investment in a Startup; exercise all voting rights with respect to an Investment Vehicle and to the extent it has the contractual right to do so, all voting rights with respect to a Startup; and decide whether the Investment Vehicle should distribute cash and marketable securities to Investors, subject to any lock-up agreements or similar restrictions or in kind distributions it receives from Startups. The Manager may perform these services in consultation with certain of its affiliates, Investors, Partners and/or their respective affiliates.
The Manager will also be responsible for the general management and administration of the Manager and Platform, including, among other things:
- maintaining an office and addressing inquiries from Startups, Partners, Investors and others;
- employing or engaging staff;
- Partner and Investor relations;
- continued development and upkeep of the Platform;
- providing consulting and advisory services;
- increasing collaboration among Startups, Partners and Investors;
- organizing meetings, presentations, and events;
- business development; and
- ensuring compliance with applicable securities and other laws, including in connection with the Manager’s contemplated registration as an Exempt Reporting Advisor.
The Manager may delegate certain of its management responsibilities to others, including its affiliates.
X. Conflicts of Interest
The Manager may have various conflicts of interest arising from its relationships with Startups, Investors, Partners, the Investment Vehicles formed by the Manager, and/or their respective affiliates. The Manager may have, directly or indirectly, proprietary, investment, business or other interests in, may serve on boards of, provide legal or other advise to, and/or may manage or advise, other funds, entities, managers, investors, companies, firms, non-profits, institutions, entrepreneurs and/or others which may have business, investment or other objectives similar, dissimilar or competitive to those of Startups, Investors, Partners and/or Investment Vehicles, and/or which engage in business or investments in the same target sectors or industries or of the same type as Startups, Investors and/or Partners. These are discussed in more detail in the Risk Factors set forth below. Each prospective Startup, Investor and Partner should carefully consider and evaluate such conflicts prior to registering as a user on the Platform. By accepting this User Agreement, you hereby irrevocably and forever waive all such conflicts, whether they exist today or as they may arise in the future.
XI. Online Privacy
The Manager does not collect any personally identifiable information about visitors who access only the publicly available areas of the Website. If you submit an inquiry to email@example.com, the Manager may collect your name and contact information for purposes of responding only.
If you are a Startup, you understand and agree that any Company Information that you provide to the Manager may be shared with Partners and/or Investors on the Platform who have expertise in your business or industry or provide services that you indicated you need in the registration process or in connection with capital raising activities or for other reasons in the Manager’s discretion.
If you are a Partner, you understand and agree that the Manager intends to publish information that you provide to it.
The Manager is not a “broker,” “dealer,” or “investment advisor,” as defined under applicable securities laws. The Manager does not endorse any third parties, or third-party Content, including, without limitation, any Startup seeking to raise capital through the Website. The Manager merely serves as a platform for interactions between Startups, Investors and Partners. The Manager is not responsible for any investment or other decisions made by any individual or entity in connection with any opportunity posted on or through the Website.
The services and all materials and Content available through the Website are provided “as is” and on an “as available” basis. The Manager disclaims all warranties of any kind, whether express or implied, relating to the service and all materials and Content available through the Website, including: (1) any implied warranty of merchantability, fitness
for a particular purpose, title, quiet enjoyment, or non-infringement; and (2) any warranty arising out of course of dealing, usage, or trade.
The Manager assumes no responsibility for any error, omission, interruption, deletion, defect, delay in operation or transmission, communications line failure, theft or destruction or unauthorized access to, or alteration of, any of your communications on or through the Website. The Manager is not responsible for any malfunction or other problem with any telephone network, telephone lines, computer online systems, servers, internet service providers, computer equipment, software, or failure of any email or players, including, without limitation, any personal injury or property damage. The Manager does not guarantee any results (specific or otherwise) from your use of the Website or the services and the Manager makes no representation or warranty that the Website, the services, the investment opportunities or the information or other Content provided on the Website will meet your requirements or be suitable for investment.
If you are in any way dissatisfied with the Website, the services, the investment opportunities or the information or other Content provided on the Website, your sole remedy is to discontinue your use of the Website and/or the services. The Manager disclaims any and all liability of any kind for any unauthorized access to or use of any of your personally identifiable information. By accessing the Website, you agree that the Manager shall not be liable for any unauthorized access to or use of any of your personally identifiable information.
XIII. Limitation of Liability
To the fullest extent permitted by law, none of the Manager or its affiliates shall be liable to you for any direct, indirect, incidental, special, exemplary or consequential damages in any way whatsoever (including without limitation, loss of profits, data, use, goodwill, or other intangible losses) resulting from (1) your use of, or inability to use, the Website, (2) losses that you suffer as a result of an investment in any Startup, (3) errors, mistakes or inaccuracies in the QuikVet™ or the Manager’s due diligence process, (4) errors, mistakes, or inaccuracies of Content displayed on the Website or through the Website or the services, (5) personal injury or property damage, of any nature whatsoever, resulting from your access to and/or use of (or your inability to access and use) the Website or the services, including, without limitation, any damage caused to your computer or software or information stored thereon, (6) any conduct or Content of any third party obtained on or through the Website or the services, including without limitation, any defamatory, offensive or illegal conduct of other users or third parties (7) any unauthorized access to or use of the Manager’s servers and/or any and all personal and/or other information stored therein, (8) any interruption or cessation of transmission to or from the Website or through the Website or any of the services, (9) any bugs, viruses, trojan horses, or the like, which may be transmitted to or through the Website or the services by any third party, (10) unauthorized access, use or alteration of your transmissions or Content, (11) emails or other transmissions or communications made to you through the Website or the services and/or (12) any errors or omissions in any Content or for any loss or damage of any kind incurred as a result of your use of any Content or services posted, emailed, transmitted, or otherwise made available via the Website or the services, whether based on warranty, contract, tort (including negligence), or any other legal theory, and whether or not the Manager is advised of the possibility of such damages and even if a remedy set forth herein is found to have failed of its essential purpose.
The Manager shall not be liable for the conduct of third parties, including other users of the Website and operators of external websites, and the risk of the Website and external websites and of injury from the foregoing (including, without limitation, loss of profits, use, data or other intangibles) rests entirely with you. Because some states do not allow the exclusion or limitation of liability for consequential or incidental damages, in such states liability is limited to the fullest extent permitted by law. If you are dissatisfied with any portion of the Website, or with any of portion of this User Agreement, your sole and exclusive remedy is to discontinue using the Website.
You expressly understand and agree that:
- Your use of the Website is at your sole risk. The Website is provided on an “as is” and “as available” basis. To the fullest extent permissible pursuant to applicable law, the Manager expressly disclaims all warranties of any kind, whether express or implied, including, but not limited to the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
- The Manager does not warrant or represent that (i) the Website will meet your investment or other objectives or requirements, (ii) the Website will be uninterrupted, timely, secure, or error-free, (iii) the results that may be obtained from the use of the Website will be accurate or reliable, (iv) the quality of any services, investments, information, or other material obtained by you through the Website will meet your expectations, (v) the server that makes the Website available is free of viruses or other harmful components, or (vi) the quality of any diligence by or through the Website will meet your expectations.
- Any Content downloaded or otherwise obtained through the use of the Website is done at your own discretion and risk and that you will be solely responsible for any loss or damage incurred, including, without limitation, damage to your computer system or loss of data that results from the download of any such material. You (and not the Manager or any of our respective licensors or suppliers) assume the entire cost of all necessary servicing, repair or correction to restore your system resulting from your use of the Website.
- Under no circumstances will the Manager be liable to you for more than $100.
- No advice or information, whether oral or written, obtained by you from the Manager or through or from the Website shall create any warranty not expressly stated in this User Agreement.
Applicable law may not allow the exclusion of implied warranties, so the above exclusion may not apply to you. To the extent any provisions relating to disclaimer, waiver of liability, exclusion of warranties, or any other rights and obligations set forth herein are not permissible or enforceable under any applicable laws or regulations, including but not limited to, under foreign laws or regulations as applied to users from such foreign jurisdictions, each such provision shall be deemed removed and invalid, but all remaining provisions shall be in full force and effect.
TO THE FULLEST EXTENT PERMITTED BY LAW, YOU ARE RESPONSIBLE FOR YOUR USE OF THE PLATFORM AND YOUR DECISION TO INVEST IN ANY STARTUP, AND YOU WILL DEFEND, INDEMNIFY AND HOLD HARMLESS THE MANAGER AND ITS AFFILIATES FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS, SUITS, DEMANDS, PROCEEDINGS, LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES, COSTS OF INVESTIGATION, DEFENSE AND/OR SETTLEMENT (AMONG OTHERS), ARISING OUT OF, RELATING TO OR IN CONNECTION WITH: (1) YOUR UNAUTHORIZED USE OF, OR MISUSE OF, THE PLATFORM; (2) YOUR VIOLATION OF ANY PORTION OF THIS USER AGREEMENT OR YOUR BREACH OF ANY OF YOUR REPRESENTATIONS, WARRANTIES, OR AGREEMENTS IN THIS USER AGREEMENT, OR ANY APPLICABLE LAW OR REGULATION; (3) YOUR VIOLATION OF ANY THIRD PARTY RIGHTS, INCLUDING ANY INTELLECTUAL PROPERTY RIGHTS OR PUBLICITY, CONFIDENTIALITY, OTHER PROPERTY, OR PRIVACY RIGHTS; (4) ANY DISPUTE OR ISSUE BETWEEN YOU AND ANY THIRD PARTY; (5) ANY INVESTMENT IN OR BUSINESS OR OTHER RELATIONSHIP WITH A STARTUP; OR (6) ANY MISREPRESENTATION OF YOUR STATUS AS AN ACCREDITED INVESTOR. WE RESERVE THE RIGHT TO ASSUME THE EXCLUSIVE DEFENSE AND CONTROL OF ANY MATTER OTHERWISE SUBJECT TO INDEMNIFICATION BY YOU (WITHOUT LIMITING YOUR INDEMNIFICATION OBLIGATIONS WITH RESPECT TO THAT MATTER), AND IN THAT CASE, YOU AGREE TO COOPERATE WITH OUR DEFENSE OF THOSE CLAIMS.
XV. Applicable Law
This User Agreement will be governed by and construed in accordance with the laws of the State of New York, without regard to any principles of conflicts of law. You agree that any action at law or in equity that arises out of or relates to this User Agreement will be filed only in the state or federal courts located in Erie County, New York, and you hereby consent and submit to the personal jurisdiction and venue of such courts for the purposes of litigating any such action.
XVI. Disputes; Arbitration
Generally. In the interest of resolving disputes between you and the Manager in the most expedient and cost effective manner, you and the Manager agree that every dispute arising in connection with this User Agreement will be resolved by binding arbitration. Arbitration is less formal than a lawsuit in court. Arbitration uses a neutral arbitrator instead of a judge or jury, may allow for more limited discovery than in court, and can be subject to very limited review by courts. Arbitrators can award the same damages and relief that a court can award. This agreement to arbitrate disputes includes all claims arising out of or relating to any aspect of this User Agreement, whether based in contract, tort, statute, fraud, misrepresentation, or any other legal theory, and regardless of whether a claim arises during or after the termination of these Terms. You understand and agree that, by entering into these terms, you and the Manager are each waiving the right to a trial by jury or to participate in a class action.
Exceptions. Despite the above provisions, nothing in this User Agreement will be deemed to waive, preclude, or otherwise limit the right of either party to: (a) bring an individual action in small claims court located in Erie County, NY; (b) pursue an enforcement action through the applicable federal, state, or local agency if that action is available; (c) seek injunctive relief in a court of law located in Erie County, NY in aid of arbitration; or (d) file suit in a court of law located in Erie County, NY to address an intellectual property infringement claim.
Arbitrator. Any arbitration between you and the Manager will be settled under the Federal Arbitration Act and administered by the American Arbitration Association (“AAA”) under its Consumer Arbitration Rules (collectively, “AAA Rules”) as modified by this User Agreement. The AAA Rules and filing forms are available online at www.adr.org, by calling the AAA at 1-800-778-7879, or by contacting the Manager. The arbitrator has exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this binding arbitration agreement.
Notice of Arbitration; Process. A party who intends to seek arbitration must first send a written notice of the dispute to the other party by certified U.S. Mail or by Federal Express (signature required) or, only if that other party has not provided a current physical address, then by electronic mail (“Notice of Arbitration”). The Manager’s address for Notice is: Varia Ventures Management Company, LLC, 50 Fountain Plaza, Buffalo, NY 14202. The Notice of Arbitration must: (a) describe the nature and basis of the claim or dispute; and (b) set forth the specific relief sought (“Demand”). The parties will make good faith efforts to resolve the claim directly, but if the parties do not reach an agreement to do so within 30 days after the Notice of Arbitration is received, you or the Manager may commence an arbitration proceeding. All arbitration proceedings between the parties will be confidential unless otherwise agreed by the parties in writing. During the arbitration, the amount of any settlement offer made by you or the Manager must not be disclosed to the arbitrator until after the arbitrator makes a final decision and award, if any.
Fees. The payment of any fees will be decided by the AAA Rules. Any arbitration hearing will take place at a location to be agreed upon in Erie County, New York, but if the claim is for $10,000 or less, you may choose whether the arbitration will be conducted: (a) solely on the basis of documents submitted to the arbitrator; (b) through a non-appearance based telephone hearing; or (c) by an in-person hearing as established by the AAA Rules in the county (or parish) of your billing address. If the arbitrator finds that either the substance of your claim or the relief sought in the Demand is frivolous or brought for an improper purpose (as measured by the standards set forth in Federal Rule of Civil Procedure 11(b)), then the payment of all fees will be governed by the AAA Rules. Regardless of the manner in which the arbitration is conducted, the arbitrator must issue a reasoned written decision sufficient to explain the essential findings and conclusions on which the decision and award, if any, are based. The arbitrator may make rulings and resolve disputes as to the payment and reimbursement of fees or expenses at any time during the proceeding and upon request from either party made within 14 days of the arbitrator’s ruling on the merits.
No Class Actions. You and the Manager agree that each may bring claims against the other only in your or its individual capacity and not as a plaintiff or class member in any purported class or representative proceeding. Further, unless both you and the Manager agree otherwise, the arbitrator may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding.
Modifications to this Arbitration Provision. If the Manager makes any future change to this arbitration provision, other than a change to the Manager’s address for Notice of Arbitration, you may reject the change by sending us written notice within 30 days of the change to the Manager’s address for Notice of Arbitration, in which case your account with the Manager will be immediately terminated and this arbitration provision, as in effect immediately prior to the changes you rejected will survive.
Enforceability. If portions of this Section are found to be unenforceable or if the entirety of this Section is found to be unenforceable, then the entirety of this Section XVI will be null and void and, in that case, the parties agree that the exclusive jurisdiction and venue described in Section XVI above will govern any action arising out of or related to this User Agreement.
XVII. Term; Termination
The Platform has no “term,” and the Manager reserves the right to discontinue the Website at any time and will have no liability or responsibility to any Startup, Partner, Investor or other user, other than to continue to comply with its obligations under any separate written agreement(s) between the Manager and such user(s).
Unless terminated by the Manager, this User Agreement, as amended from time to time, will remain in full force and effect while you use the Website. The Manager may terminate your access to the Website at any time, without notice or any liability of any kind, for any conduct that the Manager, in its sole discretion, believe is in violation of any applicable law or is harmful to the interests of another user, a third-party provider, a service provider, or the Manager, or for any other reason determined by the Manager.
Upon termination of this User Agreement for any reason, you shall destroy and remove from all computers, and other storage media all copies of any intellectual property owned by the Manager or any other user of the Website that you acquired via use of the Website. Your representations in this User Agreement and any other provision of this User Agreement which by its nature is designed to survive termination shall survive any termination or expiration of this User Agreement.
XVIII. Modification of User Agreement
The Manager may amend this User Agreement at any time, and from time to time, in its sole discretion, effective upon posting the amended User Agreement on the Website where the prior version of this User Agreement was posted or by communicating these changes through any written or other contact method the Manager has established with you. Your use of the Website following the date on which such amended User Agreement is published will constitute your consent to such amendments. If you do not agree with the changes in the User Agreement, your sole remedy is to discontinue the use of the Website.
Informational Purposes Only. Nothing on this Website is a recommendation that you purchase, sell or hold any security, or that you pursue any investment style or strategy. Nothing on this Website is intended to be, and you should not consider anything on the Website to be, investment, accounting, tax or legal advice. The past performance of any investment, investment strategy or investment style is not indicative of future performance. You are responsible for making your own assessment regarding regulatory requirements as may be applied to your activities on the Website.
International Use. The Manager make no representation that materials on the Website are appropriate or available for use in locations outside the United States and accessing them from territories where their contents are illegal is prohibited. Those who choose to access the Website from other locations do so on their own initiative and are responsible for compliance with local laws.
Severability. Whenever possible, each provision of this User Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision of this User Agreement shall be prohibited by or invalid under such law, it shall be deemed modified to conform to the minimum requirements of such law, or if for any reason it is not deemed so modified, it shall be prohibited or invalid only to the extent of such prohibition or invalidity without the remainder thereof or any other such provision being prohibited or invalid.
Entire Agreement. This User Agreement together with any separate written agreements between you and the Manager, contain the entire agreement between you and the Manager with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings, written or oral, among us with respect hereto and thereto, whether or not relied or acted upon. No course of conduct pursued or acquiesced in, and no oral agreement or representation subsequently made, by the Manager, and no usage of trade, shall amend this User Agreement or impair or otherwise affect the Manager’s obligation, rights, and remedies pursuant to this User Agreement.
Controlling Agreements. In the event of a conflict between the terms and conditions of this User Agreement, the template documents provided on the Website, and the written agreement(s) that you execute with the Manager, the written agreement(s) that you execute with the Manager will control in all instances. In the event of a conflict between the terms and conditions of this User Agreement and the template documents provided on the Website, this User agreement shall control in all instances.
No Assignment. You may not assign or transfer this User Agreement or your rights or obligations under this User Agreement, in whole or in part, by operation of law or otherwise, without our prior written consent. We may assign this User Agreement at any time without notice or consent.
No Waiver. The failure of the Manager to require performance of any provision will not affect its right to require performance at any other time after that, nor will a waiver by the Manager of any breach or default of this User Agreement, or any provision of this User Agreement, be a waiver of any subsequent breach or default or a waiver of the provision itself.
Headers. Use of section headers in this User Agreement is for convenience only and will not have any impact on the interpretation of any provision.
Contact Information. The Website is offered by Varia Ventures Management Company, LLC located at 50 Fountain Plaza, Buffalo, NY 14202. You may contact us by emailing us at firstname.lastname@example.org.
As used in this User Agreement, the following terms have the following meanings:
“Accredited Investor” is defined by the SEC in Rule 501 of Regulation D under the Securities Act of 1993 as follows:
- A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;
- A natural person who has individual net worth, or with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the person’s primary residence;
- A director, executive officer or general partner of the company selling the securities;
- A business in which all the equity owners are accredited investors;
- A charitable organization, corporation or partnership with assets exceeding $5 million;
- A bank, insurance company, registered investment company, business development company or small business investment company;
- An employee benefit plan, within the meaning of Employee Retirement Income Security Act, is a bank, insurance company or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; or
- A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
“Company Information” means, all information acquired by, through or in connection with your use of the Platform that was provided by another person.
“Platform Rules”: In connection to with your use of the Website, you will not:
- Defame, libel, disparage, threaten, harass or intimidate anyone, including by the use of offensive comments related to race, national origin, gender, sexual preference or physical handicap;
- Use any profane, obscene, pornographic or otherwise objectionable content or language;
- Promote or describe how to perform violence, illegal drug or substance use or any other illegal activity;
- Violate the personal, privacy, contractual, intellectual property or other rights of any person;
- Reveal any personal information about another individual, with respect to personal or privacy rights, including an address, phone number, email address, credit card number or other information that could be used to track, contact or impersonate that individual;
- Violate this User Agreement or any state, local, federal or foreign law, rule, or regulation;
- Trick, defraud, deceive or mislead the Manager or other users such as by submitting false reports of abuse or misconduct to the Manager’s support services, disguising the source of materials or other information you submit to the Website or using tools which minimize your Internet Protocol address (IP address) to access the Website;
- Interfere with or disrupt (or attempt to interfere with or disrupt) access and enjoyment of the Website by other users or any host or network, including, not limited to, creating or transmitting unwanted electronic communications such as “spam” to other users, overloading or flooding the Website or scripting the creation of such Content in such a manner as to interfere with or create an undue burden on the Website;
- Disparage, tarnish or otherwise harm the Manager or any other user, in the Manager’s opinion;
- Upload or transmit (or attempt to upload or transmit) any material that acts as a passive or active information collection or transmission mechanism, such as viruses, worms, Trojan horses, spyware, adware or any other malicious or invasive code or program;
- Reverse engineer, decompile, reverse assemble, modify or attempt to discover or copy software, source code or structure that the Website utilizes to generate web pages or any software or other products or processes accessible through the Website;
- Access or search (or attempt to access or search) the Website by any means, such as any automated system or unauthorized script or software, other than currently available, published interfaces provided by the Manager, unless you have been specifically allowed to so do in a separate Agreement with the Manager;
- Remove, obscure or change any copyright, trademark, hyperlink or other proprietary rights notices contained in or on the Website or on a third party website and/or software on which the Website’s code is embeddable or embedded on;
- Remove, obscure or change any notice, banner, advertisement or other branding on the Website;
- Submit any Content or material that falsely expresses or implies that such Content or material is sponsored or endorsed by the Manager;
- Interfere with or circumvent any security feature of the Website or any feature that restricts or enforces limitation on use of or access to the Website, such as probing or scanning the vulnerability of any system, network or breach;
- Sell access to the Website or any part thereof other than through a mechanism approved by the Manager; or
- Use the Website to market investment advisory services that may cause the Manager to have to register as a broker or dealer or investment advisor with the SEC or be treated as an underwriter.
I. What Information the Manager Collects
This policy applies to information collected from, or which may be submitted to, the Website. Currently, we do not collect any personally identifiable information about visitors to the publicly available areas of the Website. At times, visitors to the Website may choose to email the Manager using links available on the Website; in such instances, a visitor’s name, email address and any other information that you provide, may be collected as part of the process of sending the email to the Manager in order to enable the Manager to reply to those emails, although the Manager has no responsibility to reply.
You provide us with Personal Data about yourself and we collect nonpublic personal information about you from a variety of sources, including interviews and other conversations between you and the Manager’s personnel, as well as applications and other documents or assessments which you complete or provide to the Manager.
You are not required to provide the personal information that we have requested, but, if you chose not to do so, in many cases we will not be able to provide you with our services or respond to any queries you may have.
II. How the Manager Uses Information it May Collect
We generally use Personal Data for the following: to deliver and improve the Website; to manage your account and provide you with customer support; to perform research and analysis about your use of the Platform; to develop, display, and track Content on the Website and other sites; Website or mobile application analytics; to diagnose or fix technology problems; to automatically update the Website; to verify your identify and prevent fraud or other unauthorized or illegal activity; to diligence you; to connect you with Partners and Investors; to raise capital for you on the Website, including to determine terms and conditions of a capital raise, including valuation; to prepare reports for investors; to monitor company performance in connection with an investment; to verify your status as an Accredited Investor; and to enforce or exercise any rights in our Terms of Service.
We do not share any information collected from the publicly available areas of the Website with any parties outside of the Manager. We reserve the right to disclose any such information we collect when required by a valid subpoena or court order, or as otherwise permitted or required by law. In the event that a visitor submits his or her email address or any other personally identifiable information through the Website while requesting information or sending an email to someone at the Manager, other than as described above, we will not use such information for any other purpose, and will not disclose such information to any outside party.
III. Other Third Party Websites
IV. Disclosure to Third Parties
At times, the Manager may make certain Personal Data available to Partners or Investors on the Platform that work with the Manager to provide services and other resources including capital. The Manager also shares Personal Data with companies who provide services such as verification of Accredited Investor status, assessment of leadership ability, information processing, extending credit, delivering services or resources to you, managing and enhancing customer data, providing customer service, assessing your interest in our or our Partners’ services or resources, and conducting research or satisfaction surveys. You understand and agree to the disclosure of such information as contemplated under this Section IV.
V. Disclosures Required by Law
We do not provide Personal Data to mailing list vendors or solicitors for any purpose. We restrict access to nonpublic Personal Data concerning each of you to our personnel who have a business reason to need to know that information. In addition, we maintain a secure office and computer environment to ensure that your information is not placed at unreasonable risk.
Prospective partners and investors (which such partners and investors are individually and collectively referred to herein as an “Investor”) should be aware that an investment (whether in capital, time, services, or other resources) in a single company or multiple companies directly or indirectly through a single investment vehicle or multiple investment vehicles formed by Varia Ventures Management Company, LLC for that purpose (collectively, with its affiliates, managers, members, personnel, advisors, partners, related parties, officers, employees, consultants, representatives, successors and assigns, and their respective affiliates and related parties, the “Manager”) (which such companies and investment vehicles are individually and collectively referred to herein as a “Startup”), on or through www.variaventures.com (the “Website” or “Platform”), involves a high degree of risk (the “Risk Factors”). There can be no assurance that (i) an investment vehicle’s investment objectives will be achieved, (ii) a Startup will achieve its business plan, (iii) the Manager’s due diligence is comprehensive, satisfactory or sufficient, or (iv) an Investor will receive a return of any part of its investment in any Startup through the Platform. In addition, there may be occasions when the Manager and/or their respective affiliates may encounter potential conflicts of interest in connection with an investment in a Startup, such that said party may avoid a loss, or even realize a gain, when other Investors are suffering or could suffer losses. The following considerations, among others, should be carefully evaluated before making an investment in a Startup.
Risk Inherent in Startup Investments; an Investor May, and Frequently Does, Lose All of Its Investment. An investment in the Company involves a high degree of risk. While targeted returns should reflect the perceived level of risk in any investment situation, such returns may never be realized and/or may not be adequate to compensate an Investor. Loss of an Investor’s entire investment is possible and can easily occur. Moreover, the timing of any return on investment is highly uncertain. The startup market is highly competitive and the percentage of companies that survive and prosper is small. Startup investments often experience unexpected problems in the areas of product development, manufacturing, marketing, financing, team building, and general management, among others, which frequently cannot be solved. In addition, Startups may require substantial amounts of financing, which may not be available through institutional private placements, the public markets or otherwise.
Difficulty in Valuing Startup Investments; Conflicts of Interest in Valuation. It is enormously difficult to determine objective values for any Startup. In addition to the difficulty of determining the magnitude of the risks applicable to a given Startup and the likelihood that its business will be a success, there generally will be no readily available market for its equity securities, and hence, an Investor’s investments will be difficult to value. Further, the Manager may have, and often does have, a business, investment, legal or other relationship with a Startup, its founders or their affiliates, which could result in an actual or potential conflict of interest, all of which you waive by your use of the Website. In such cases, the valuation and/or other terms and conditions agreed to by the Manager and Startup may be (or may seem to be) less advantageous to Investors than if such valuation and/or other terms and conditions had been negotiated and agreed to by the Investor(s) or an unrelated third party and the Startup at arms-length.
No Independent Third Party Sets the Valuation for Startups. The valuation for Startups to be posted on the Platform will be determined by the Manager based upon its due diligence review and other materials, and a negotiation with the Startup. While the Manager will endeavor to ensure that valuations are fair and appropriate, the actual valuations used in raising financing through an investment vehicle may, in practice, not accurately reflect the intrinsic value of the Startup. In general, no independent third party will make an appraisal of the value of a Startup or otherwise participate in setting the purchase price for the securities in the Startup. Further, the Manager may have an investment, business, legal, or other relationship with a Startup that could impact its determination of the valuation of such Startup, to the detriment of the Investors in such Startup. Please carefully review the Risk Factor titled “Conflicts of Interest”, below, for additional disclosure around these types of conflicts of interest.
The Results of the Manager’s Automated Due Diligence Assessment (referred to herein as the “QuikVet™”) May Be Inaccurate or Incomplete. The Manager has developed an automated due diligence assessment referred to as the “QuikVet™” to initially evaluate Startups that apply for funding through the Platform. The QuikVet™ has not been used to evaluate any Startups thus far and has no track record. The results of the QuikVet™ may be incomplete, inaccurate, or unhelpful. As a result, good investment opportunities may be overlooked by the Manager, and other opportunities that could result in a loss by Investors may be posted on the Platform for investment. Further, the Manager cannot guarantee that there will never be a software bug, a hacker attack or other issue that affects the results of the QuikVet™. The Manager may change or terminate the QuikVet™ at any time. Further, the Manager makes no representations, warranties or guaranties regarding the quality or effectiveness of the QuikVet™ or its related scoring mechanism.
The Results of the Manager’s Due Diligence Review May Be Inaccurate or Incomplete. In addition to the QuikVet™, the Manager intends to complete additional due diligence on certain companies that receive positive scores from the QuikVet™ or the Management Team. There can be no assurance that the results of the Manager’s due diligence process will be accurate or complete. The Manager intends to rely on the company’s management team to provide true and complete information, but there can be no assurances that they will do so. In addition, because Startups are privately held and so not subject to the same disclosure and reporting obligations of publicly traded companies, the information made available to the Manager regarding a Startup is very limited. In making your decision to invest in a Startup, you may not be provided with financial, operational, or other information that may be important in making an investment decision or the information that you are provided with may be inaccurate or complete. The Manager does not assume any responsibility for the accuracy or completeness of such information, and makes no representations, warranties or guaranties regarding its due diligence review of Startups.
Lack of Information for Monitoring and Valuing Companies. The Manager may not be able to obtain all information it would want regarding a particular Startup on a timely basis or at all. The Manager may receive incomplete, inaccurate or falsified information from a Startup. It is possible that the Manager may not be aware on a timely basis of material adverse changes that have occurred with respect to any information provided by a Startup or with respect to any investment in a Startup. As a result of these difficulties, as well as other uncertainties, the Manager may not have complete or accurate information to provide to an Investor, or it may provide incomplete or inaccurate information on which an Investor may base its decision to invest in a Startup. In addition, the Manager may base its valuation of such Startup on such information, in which event, the valuation may also be inaccurate. Further, the Manager may have to make valuation determinations without the benefit of an adequate amount of relevant information. You should be aware that as a result of these difficulties, as well as other uncertainties, any valuation of Startup made by the Manager may not represent the fair market value of the securities acquired by you.
Conflicts of Interest. Instances may arise where the interest of the Manager may potentially or actually conflict with the interests of the investment vehicles and their respective Investors. For example, conflicts of interest may arise as a result of the Manager’s having investments in Startups, serving on the board of directors of or acting as advisors to Startups, including as legal counsel through Lippes Mathias Wexler Friedman LLP or as consultants through D21 Partners, LLC, providing services to Startups for which it or they receive compensation in the form of equity or cash, as well as having investments, and/or business, advisory or other relationships in other opportunities that are not posted on the Platform. By way of further example, it is possible that the Manager may agree to more company-friendly terms and conditions, including valuations, with respect to Startups with which it has a pre-existing relationship, than it would agree to if it were negotiating with a Startup with which it does not have a pre-existing relationship, which would be advantageous to the Startup and its existing investors (which could include the Manager and/or its affiliates) and disadvantageous to the Investors who invest through the Platform. In addition, the Manager has complete discretion to determine which Startups will be posted on the Platform and in such cases, may invest and/or advise such companies in exchange for cash and/or equity (and which such companies could be posted on the Platform at a later date). If, for any reason, the Manager is not fully satisfied with its due diligence review, the investment terms, including without limitation, the valuation, the level of Investor interest, or for any other reason (and even if the Startup meets the Manager’s or the Platform’s investment criteria), it may elect not to post a Startup on the Platform, may remove a Startup from the Platform, or, as provided above, may invest in and/or advise such companies in exchange for cash and/or equity. The Manager and/or its affiliates may receive equity in, serve on the board of directors of or act as an advisor to, including as legal counsel through Lippes Mathias Wexler Friedman LLP or as consultants through D21 Partners, LLC, or provide services for which it or they receive compensation in the form of equity or cash to companies that it does not post on the Platform. Although the Manager will endeavor to allocate investment opportunities equitably among all interested parties, it may be impractical or impossible to do so, and so the Manager reserves the right to allocate investment opportunities as it determines, in its sole discretion. Each Investor understands, consents and agrees to waive any and all such conflicts of interest.
The Manager has Complete Discretion Over its Use of Proceeds. The Manager may collect consulting fees from Startups, subscription fees from Partners, and Expenses from Investors to cover certain expenses of the investment vehicles, as well as recoup certain additional expenses, if any, from investors in connection with a liquidity transaction, as discussed in more detail above, which such fees and expenses the Manager shall have complete and sole discretion to use as it deems necessary or appropriate to operate the Platform and/or any investment vehicles. All fees and expenses are non-refundable, even if the Platform is terminated.
The Manager has no Operating History. The Manager was formed to develop the Platform and identify investment opportunities to post on the Platform. It has no tangible assets and no operating history. Neither it nor the Manager’s management team has any experience acting as an investment advisor. There can be no assurance that the Manager or the Management Team will be successful in identifying successful investment opportunities, or that it or they will be successful at all. The Manager and the Platform must be considered in the development stage, with a high degree of risk and likelihood of failure.
Investment Vehicles are Holding Companies with no Operating History. The Manager intends to form investment vehicles for each Startup in which Investors will invest. Each such investment vehicle is or will be a newly formed entity with no operating history. Each Startup in each investment vehicle should be evaluated on the basis that the Manager’s assessment of the prospects of such Startup may not prove accurate and that the investment vehicle will not achieve its investment objective. Past performance of the Manager, its management team or the management team of a Startup is not predictive of future results.
Reliance on the Manager, Management Team, and Company Management. None of the investment vehicles will have any operating history and, as a result, will be entirely dependent on the Manager and members of the Manager’s management team. Control over the operation of the investment vehicle will be vested entirely with the Manager and each investment vehicle’s future performance will depend largely upon the business and investment acumen of the Manager and its management team. The loss of service of the Manager or any member of its management team could have an adverse effect on the investment vehicle’s ability to realize its investment objectives. Investors generally have no right or power to take part in the management of the investment vehicle and, as a result, the investment performance of the investment vehicle will depend entirely on the actions of the Manager and its management team. Although the Manager and its management team will endeavor to monitor the performance of each investment vehicle, it will primarily be the responsibility of each Startup’s management team to operate the Startup on a day-to-day basis. Although the investment vehicles generally intend to invest in Startups with strong management, there can be no assurance that the existing management of such Startups will continue to operate a company successfully. Further, Investors will be dependent upon the judgment and ability of the Manager and its management team in sourcing, diligencing, recommending, managing and administering investments to and for the Investors. No assurance can be given that the Manager and its management team will be successful in obtaining suitable investments, or that if such investments are identified and posted on the Platform, the objectives of the Investor will be achieved. The Manager’s success in sourcing, diligencing, recommending, managing and administering investments to and for the Investors depends to a large degree upon the skills of its key staff and independent contractors, as well as its ability to identify, hire and retain additional qualified personnel. The Manager may be unable to retain its existing key staff and independent contractors or attract and retain additional key personnel if it is unable to increase its revenues or raise a sufficient amount of funds from subscribers in order to compensate such personnel.
The Manager and its Management Team are Engaged in Other Businesses. The Manager, its management team and their respective affiliates are engaged in businesses other than operating the Platform and identifying and posting investment opportunities on the Platform for investment. More specifically, the Manager, its management team or their respective affiliates may provide services to institutional partners or companies that are not posted on the Platform in exchange for compensation in the form of equity or cash. In addition, members of the Manager’s management team and advisory committee currently all have full-time jobs with other organizations and businesses, as well as other business and investment interests, some or all of which may conflict with the interests of the Investors. As a result, the Manager and its management team may not spend as much time as may be needed to operate the Platform successfully or to successful identify investment opportunities for posting on the Platform, or any time at all, which could (and likely would) have a material adverse effect on the success of the Platform and the quantity and quality of investment opportunities on the Platform.
The Manager is not an Investment Advisor and Owes No Fiduciary Duties To You. The Manager is not an investment advisor and owes no fiduciary duties to you. While we will endeavor to post and recommend for investment only those companies that we believe to be suitable investment opportunities, we make no assurances that that will be. You, together with your counsel and advisors, are solely responsible for determining the suitability of any investment.
The Manager May Terminate the Platform At Any Time Without Any Liability. The Manager and the Platform are in the development stage, and the Manager has no operating history. The Platform will require significant and continuing technological development, and the Manager will require significant ongoing funds and personnel to manage and operate the Platform. As a result, if the Manager is unsuccessful in, among other things, securing funds, hiring personnel, identifying investment opportunities, or generating sufficient investor interest in opportunities that are posted on the Platform, or if it is unsuccessful in completing development on the Platform, it may decide to terminate the Platform. In such event, and if investment vehicles have been formed to invest in Startups, the Manager may make an in kind distribution of the Startup securities held by the investment vehicles to the Investors in such investment vehicles. In any event, none of the Manager or its affiliates will have any liability to any Investor or other Person with respect to the termination of the Platform, and no Investor or other Person will be entitled to repayment or refund of any subscription fees, management fees, administrative fees, expenses or other amounts paid to the Manager or its affiliates.
Our Platform is Under Development and Not All Features May Work at Launch or at All. The Platform is currently under development. Certain features that we anticipate offering to our registrants are not complete, and will require a significant amount of development work that may not be completed for months or even years. The lack of these features may impact your ability to browse Startups, to access information or reports posted by the Manager with respect to Startups, or view and manage your investment opportunities through a personalized dashboard or otherwise. We cannot guaranty that we will complete these features in the near future or at all.
Our Platform May Be Subject To Hacking Or Other Cybersecurity Threats. We could be subject to hacking or other cybersecurity threats, resulting in a loss or misuse of proprietary, personally identifiable or confidential information and/or harm to our relationships with Startups, Partners or Investors, and the market perception of the effectiveness of our Platform. Experienced computer programmers or hackers may attempt to penetrate our network security. Others, including employees or vendors, may also intentionally or unintentionally provide unauthorized access to ours IT environment. These hackers or others may misappropriate proprietary, personally identifiable or confidential information of the Manager, or our Startups, Partners and Investors, or cause interruptions of our IT operations, services and business. This may cause lawsuits and may negatively affect the market perception of the effectiveness of our Platform and our reputation even if the unauthorized access is not attributable to us or our personnel.
We Are Vulnerable To System Failures, Which Could Harm Our Reputation And Business. We rely on our technology infrastructure, among other functions, to provide our services. Our systems are vulnerable to damage or interruption from natural disasters, power loss, telecommunication failures, terrorist attacks, computer intrusions, viruses, worms and other malicious code, computer denial-of-service attacks and other events. A significant number of our systems are not redundant, and our disaster recovery planning is not sufficient for every eventuality. Our systems are also subject to break-ins, sabotage and intentional acts of vandalism by internal employees, contractors and third-parties. Despite any precautions we may take, such problems could result in, among other consequences, interruptions in our services, which could harm our reputation and business. We do not carry business interruption insurance sufficient to protect us from all losses that may result from interruptions in our services as a result of system failures or to cover all contingencies. Any interruption in the availability of our Website and on-line interactions could create a large volume of user questions and complaints that would need to be addressed by us, which, in turn, could impact the time and resources we have available to operate other aspects of our business including identifying investment opportunities.
No Assurance of Additional Capital for Companies. After an Investor has invested in a Startup, continued development and marketing of its products or services, or administrative, legal, regulatory or other needs may require that it obtain additional financing. In particular, early-stage companies generally have substantial capital needs that are typically funded over several stages of investment. Such additional financing may not be available on favorable terms, or at all.
Illiquidity of Investments. An Investor’s investments will generally be private, illiquid holdings. As such, there will be no public markets for the securities held by the Investor, and no readily available liquidity mechanism at any particular time for any of the investments. As a result, an investment in a Startup requires a long-term commitment with no certainty of return. Further, an Investor’s investments may not generate current income. In general, the return of capital and the realization of gains, if any, from an investment only occurs upon the partial or complete realization or disposition of such investment, which often takes years, sometimes decades, if a liquidity event occurs at all.
Minority Investments. A significant portion of an Investor’s investments will represent minority stakes in privately held companies. As is the case with minority holdings in general, such minority stakes will have neither the control characteristics of majority stakes nor the valuation premiums accorded majority or controlling stakes will be reliant on the existing management and board of directors of such companies, which may include representatives of other investors or affiliates of the Manager with whom the Investor is not affiliated and whose interests may conflict with the interests of the Investor. In addition, the securities in which an Investor will invest may be or may become among the most junior in a Startup’s overall capital structure and, thus, subject to the greatest risk of loss. Generally, there will be no collateral to protect an investment in a Startup once made.
Future Performance. There can be no assurances that return of capital or any targeted internal rate of return will be achieved in any Startup. Further the past performance of a Startup or its management, the Manager or its affiliates, or any Partner or its affiliates, is nor predictive of a Startup’s future results. On any given investment, loss of principal is possible and often, probable.
Concentration of Investments. Investors will primarily hold securities issued by privately-held companies that are organized or have substantial sales or operations in Upstate New York. Such investments may be subject to certain additional risk due to, among other things, the lack of capital in the region and depressed economic conditions. In addition, the Manager may be competing for limited investment opportunities with entities that have substantially greater financial and other resources. Competition generally may reduce the number of suitable investment opportunities available to Investors and increase the bargaining power of Startup. Further, a limited number of Startups will be made available for investment on the Platform, and such Startup may be concentrated in one industry or one industry segment. As a result, an Investor’s investment portfolio could become highly concentrated.
Lack of Sufficient Investment Opportunities. The business of identifying and structuring high-growth investments is highly competitive and involves a high degree of uncertainty. As a result, it is possible that very few, if any, Startup will be available for investment on the Platform. In addition, the Manager’s assumptions underlying its economic model may be inaccurate as it is impossible to predict how many Startups may apply on the Platform. If a limited number of Startups apply on the Platform, it is highly likely that few or no Startups will be posted to the Platform for investment.
Limited Transferability of Investment Vehicle Interests. There will be no public market for interests in Startups and none is expected to develop. There will be substantial restrictions upon the transferability of interests in investment vehicles under the applicable Operating Agreement of the investment vehicle and under applicable securities laws. In general, withdrawals of interests in investment vehicles are not permitted. In addition, interests in investment vehicles are not redeemable. Consequently, an Investor will bear the economic risks of its investment for the term of the investment vehicle.
Investors Do Not to Participate in the Management of the Investment Vehicle. Investors will not have the right to participate in the management of any investment vehicle or in decisions made by the Manager on its behalf with respect to the investment vehicle. More specifically, Investors will not make decisions with respect to the management, disposition or other realization of any investment made by the relevant investment vehicle. As a result, in general, Investors will have almost no control over their investments.
Diverse Investors. Investors in an investment vehicle may have conflicting investment, tax, and other interests with respect to that vehicle’s investments, which may arise from the structuring of such investment or the timing of a sale of the securities of the Company underlying such investment or other factors. As a consequence, decisions made by the Manager on such matters may be more beneficial for some Investors than for others. Investors should be aware that the Manager intends to consider the investment and tax objective of each investment vehicle and Investors as a whole when making decisions on investment structure or timing of sale, and not the circumstances of any Investor individually.
Projections. Projected operating results of a Startup will be based primarily on financial projections prepared by or assumptions given to the Manager by each Startup’s management. In all cases, projections are only estimates of future results that are based upon assumptions made at the time the projections are developed. There can be no assurance that the results set forth in the projections will be attained and actual results may be significantly different from the projections. Also, general economic factors, which are not predictable, can have a material effect on the reliability of projections.
Forward Looking Statements. The information available to Investors may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating or financial performance. Examples of forward-looking statements include, but are not limited to, statements regarding: (i) the adequacy of a Startup’s funding to meet its future needs, (ii) the revenue and expenses expected over the life of the Startup, (iii) the market for a Startup’s goods or services, or (iv) other similar matters.
Each Startup’s forward-looking statements are based on the Manager’s and/or the Startup management team’s current expectations and assumptions regarding the Startup’s business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, forward- looking statements are inherently susceptible to uncertainty and changes in circumstances. The Startup’s actual results may vary materially from those expressed or implied in its forward-looking statements. Important factors that could cause the Startup’s actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political and social conditions and the following factors:
- recent and future changes in technology, services and standards;
- changes in consumer behavior;
- changes in a Startup’s plans, initiatives and strategies, and consumer acceptance thereof;
- changes in the plans, initiatives and strategies of the third parties that are necessary or important to the Startup’s success;
- competitive pressures, including as a result of changes in technology;
- the Startup’s ability to deal effectively with economic slowdowns or other economic or market difficulties;
- increased volatility or decreased liquidity in the capital markets, including any limitation on the Startup’s ability to access the capital markets for debt securities, refinance its outstanding indebtedness or obtain equity, debt or bank financings on acceptable terms;
- the failure to meet earnings expectations;
- the adequacy of the Startup’s risk management framework;
- changes in U.S. GAAP or other applicable accounting policies;
- the impact of terrorist acts, hostilities, natural disasters (including extreme weather) and pandemic viruses;
- a disruption or failure of the Startup’s or its vendors’ network and information systems or other technology on which the Startup’s businesses rely;
- changes in tax and other laws and regulations;
- changes in foreign exchange rates and in the stability and existence of foreign currencies; and
- other risks and uncertainties which may or may not be specifically discussed in materials provided to Investors.
Any forward-looking statement made by a Startup speaks only as of the date on which it is made. Startup are under no obligation to, and generally expressly disclaim any obligation to, update or alter their forward-looking statements, whether as a result of new information, subsequent events or otherwise.
No Assurance of Returns. Investors will typically purchase equity in Startups. As a result, you will not receive a return on your investment unless and until a Startup that you are invested in distributes money. A private company typically distributes money when it gets sold to another company or a new set of purchasers, when it pays a dividend, or when it is listed on a stock exchange or other public trading platform. Startups may take a long time or never achieve one of these events. As such, there can be no assurance that you will receive any returns from the Company. The timing of profit realization, if any, is highly uncertain.
Carried Interest. The fact that the Manager’s carried interest is based on a percentage of net profits may create an incentive for the Manager to post riskier or more-speculative investments on the Platform than would otherwise be the case.
Distributions in Kind. Although, under normal circumstances, the Manager intends to cause the investment vehicle to make distributions in cash or in publicly traded securities to Investors; however, it is possible that under certain circumstances (including the termination of the Platform) distributions may be made in kind and could consist of securities for which there is no readily available public market. Further, the investment vehicles may receive distributions in kind from the underlying Startup, which, in turn, it may distribute to Investors.
Recourse to the Investment Vehicle’s Assets. An investment vehicle’s assets, including any investments made by an investment vehicle in a Startup and any capital held by such investment vehicle, are available to satisfy all liabilities and other obligations of such investment vehicle. If an investment vehicle itself becomes subject to a liability, parties seeking to have the liability satisfied may have recourse to the investment vehicle’s assets, including the investment vehicle’s securities in a Startup. If that were to happen, an Investor may experience a significant or total loss of its investment or may be required to return distributions to satisfy such obligations.
Contingent Liabilities on Disposition of Investments. In connection with the disposition of an investment in a Startup, the investment vehicle that holds the securities of the Startup may be required to make representations about the business and financial affairs of such Startup typical of those made in connection with the sale of a business. Such investment vehicle may be required to indemnify the purchasers of such Startup to the extent that any such representations are inaccurate. These arrangements may result in the incurrence of contingent liabilities for which the Manager may establish reserves and escrows. In that regard, distributions to Investors in such investment vehicle may be delayed or withheld until such reserve is no longer needed or the escrow period expires.
Performance of Other Investment Vehicles. The Manager intends to form a separate investment vehicle to invest in each Startup. Depending on the Startup in which an investment vehicle invests, some investment vehicles may have a greater likelihood of positive returns whereas others may have limited or no returns. The Manager may spend more of its time and resources on those investment vehicles that could or will generate positive returns, and less time and resources on those investment vehicles that it believes will not be as successful or not successful at all.
Indemnification. In general, the Manager and its Management Team will be entitled to indemnification from the investment vehicles, and will be entitled to purchase insurance to provide for indemnification. The assets of the investment vehicles, including the investment vehicles’ securities in Startups, will be available to satisfy these indemnification obligations and Investors may be required to return distributions to satisfy such obligations. Such obligations will survive the dissolution of the investment vehicles.
Legal and Regulatory Concerns. Each investment vehicle intends to conduct its investment and other activities so as not to be deemed an investment company under the Investment Company Act of 1940, as amended. As a result, the aggregate number of Investors in an investment vehicle will be limited to the extent required for the investment vehicle to qualify for an exemption from registration as an investment company under the Investment Company Act. The performance of the investment vehicle could be materially adversely affected if the investment vehicle becomes subject to the Investment Company Act, due to the various burdens of compliance therewith and certain legal prohibitions imposed on unregistered investment companies. None of the Manager, any investment vehicle or their counsel can assure Investors that any investment vehicle may not become subject to such regulation. Further, no investment vehicle plans to register the offering of any of it interests under the United States Securities Act of 1933, as amended (the “Securities Act”) or any securities laws of any State. As a result, no Investor will be afforded the protections of the Securities Act or any securities laws of any State with respect to its investment in the relevant investment vehicle.
The Manager is an Exempt Reporting Advisor. The Manager intends to register as an Exempt Reporting Advisor with the applicable governmental body or bodies. Such registration subjects the Manager to certain additional regulatory and compliance requirements, which make operating the Manager more costly and burdensome than if it were not so registered, as well as requires it to disclose certain information regarding its business and operations to regulatory authorities.
Tax Liability. Income, gains, losses, deductions and credits from the investment vehicles will be allocated among the Investors for U.S. federal income tax purposes in accordance with the applicable Operating Agreement of the investment vehicle. For U.S. federal income tax purposes, such allocations are intended to conform to existing Treasury regulations. It is possible that, in a given year, an Investor will be allocated income or gain that will be subject to tax in an amount in excess of the amount of cash (if any) distributed by the investment vehicle to such Investor, thus requiring such Investor to use funds from other sources to pay any tax liability arising from such allocation.
No Tax Advice. Participation of the Investor on the Platform and any investment by the Investor in any investment vehicle may cause tax consequences to the Investor. Each Investor is urged to consult its own tax advisor concerning the potential tax consequences, among others, of registering as an Investor on the Platform and investing in Startups on the Platform, its obligation to report or disclose information about an investment in an investment vehicle and its participation in an investment vehicle’s income, gain, loss or deduction with respect to transactions or investments with respect to the investment vehicle.
General Economic Conditions. General economic conditions may affect a Startup’s activities. Interest rates, general levels of economic activity, the price of securities and participation by other investors in the financial markets may affect the value and number of investments identified by the Manager or posted on the Platform for investment. The stability and sustainability of growth in global economies may be impacted by terrorism, acts of war or a variety of other unpredictable events. There can be no assurance that such markets and economic systems will be available or will be available as anticipated or needed for an investment in a Startup to be successful or operate successfully. Changing economic conditions could potentially, and frequently do, adversely impact the valuation of companies.