Portfolio diversification and access to high-reward opportunities
Outperformance across any investment segment is dependent upon selectivity – more so within private equity broadly and venture capital in particular. Historically, the performance differential between the upper and lower quartiles has been substantial.
portfolio construction & fund selection
We choose our partnerships with venture capital funds carefully and systematically
Our success in selecting funds that consistently outperform has been driven by our broad view of the investment universe, the diversity of our experience, our long-standing relationships with fund managers, and reputation as thought leaders within early-stage venture investing.
Because of our long history of venture investing, our relationships with key industry players have been nurtured over many years. Spur takes an active role in the partnership process and provides fund managers with constructive feedback, and connections to prospective team members, partners, and entrepreneurs.
Spur typically commits funds to venture capital partnerships over a three to four year period. The underlying partnerships typically make new investments over a three to five year time frame. This provides our limited partners with significant time diversification.
Vintage diversification is a key factor in mitigating risk. We have found that investing over a roughly three-year period enables us to build a portfolio that includes the venture capital partnerships we have targeted for investment, corresponding generally to the cycle over which venture capital funds are typically raised.
Selectively, the team will pursue secondary interests in targeted venture capital partnerships and may invest alongside, and in support of, established venture relationships in direct private equity transactions.
the spur advantage
Resources, Focus, & Discipline
Venture capital funds-of-funds can provide superior portfolio construction, which may be difficult to attain without a steady mandate, appropriate timeframe, and adequate and consistent capital and professional resources. Because most venture funds have multi-million-dollar minimum commitment amounts, an institution without the ability to commit significant sums over a three- or four- year investment cycle may find it difficult to achieve a diversified portfolio. Funds-of-funds enjoy a broader view of the investment universe and employ dedicated resources in the selection and construction of a diversified portfolio.
Selection and access are critical and it may take several years to establish the right connections before a commitment is made. Venture capital is an asset class in which the venture firms are relatively small groups that rely heavily on their networks to identify deals and to select their limited partners.
In selecting venture firm relationships Spur evaluates investment thesis and strategy, relevant operating experience, investee companies’ track record, partner capacity, ownership and decision structures, as well as performance across prior economic cycles. The venture capital groups within the Spur portfolios combine strong operating experience with a demonstrated willingness to roll up their sleeves on behalf of entrepreneurs. Spur takes a team approach, using its extensive experience and intelligence to evaluate opportunities and to provide support and advice.
our fund performance
Commitment to early-stage investing, strong decision making, and years of diverse experience have resulted in consistently successful funds
Strong, absolute, and relative performance from a portfolio of early-stage venture capital relationships
Time diversification – typically three to four year commitment period
Industry diversification – majority technology; significant exposure to life science
Our limited partners tell us we have the most balanced economics in the industry
Outperformance of public market equivalent (PME) over varying economic and innovation cycles
Spurs are an enduring symbol of rank and achievement. In the Middle Ages, knights were said to have "earned their spurs". The age of chivalry evokes a sense of adventure and purpose that has transcended time and place, through the early adventurers and pioneers of the new continent. This age is currently extant amongst entrepreneurs and venture capitalists who face the future with a spirit of adventure, dedication, and respect for the past.
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