PSG Ventures
Financial Structure
PSG Ventures Master Fund
PSG Ventures is comprised of a Master Fund with multiple series funds which allow investments into very diverse assets.
Series 1
$75M
Series 2
$50M
Series 3
$45M
Series 4
$40M
Series 5
$40M
PSG designs each series fund will be based on highly desirable terms that minimize risk and maximizes valuation.
Rolling Investment Model
1X Liquidation Preference
An investor with a 1x liquidation preference gets paid back their full investment amount before any shareholders lower in the priority stack receive their payouts if at anytime the company is sold for a value less than expected.
Example:
$25m Invested X 2% Management Fee = $500k to support legal, tax filings, SEC filings, etc.
Example:
$50m Invested for 15% of BTECH. Blattner is sold at $10b. SPV is awarded $1.5b at time of sale. SPV will retain 10% carry = $1.5b - $50m (investment) = $1.45b X 10% = $145m. SPV retains $145m, investors into SPV receive $1.355b.
8% Dividend Payout
An investor with a dividend payout takes into consideration the liquidation preference, plus a dividend payout paying back their full investment amount before any shareholders lower in the priority stack receive their payouts if at anytime the company is sold for a value less than expected.
Example:
SPV invests $50m. Blattner sells for $500m versus $10b based on board approval. The SPV would receive $50m + 8% ($4m) dividend payout before any common stock participation in liquidity. In this case the SPV would not lose value on the investment in a downward valued sale.
Pro Rata
Pro rata investment rights give an investor the right (but not the obligation) to invest in future funding rounds, so they can maintain their percentage ownership of the company. A pro rata investment right gives an investor the opportunity to prevent their ownership from being diluted when new investments are made.
Example:
Blattner Technology wants to sell additional shares of the company to raise capital. This proposed sale would trigger the right of first refusal. The SPV will have the ability to buy the shares and essentially prevent the sales of shares to another investor.
Financial Costs
Maximum Returns
PSG Ventures minimizes fees to maximize returns for investors. Standard Management fees range from 2% - 5% depending on the target investment and carry on total gain ranges from 10% - 20% depending on the target investment.
2% Management Fee
10% Carry on Total Gain
Example:
$25m Invested X 2% Management Fee = $500k to support legal, tax filings, SEC filings, etc.
Example:
$50m Invested for 15% of Tech Company. Tech Company is sold at $10b. SPV is awarded $1.5b at time of sale. SPV will retain 10% carry = $1.5b - $50m (investment) = $1.45b X 10% = $145m. SPV retains $145m, investors into SPV receive $1.355b.
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