Frequently Asked Questions
Fund Structure
Is this a venture capital fund?
Yup! Well, sort of…Similar to a VC firm, Sweater pools investor money to invest into high-growth startups. Our SEC designation allows us to accept investment contributions from non-accredited investors (regular folks). Other than that, we invest into the same high-growth companies as our more exclusive contemporaries. We’re the VC fund for everyday investors.
How is this different from equity crowdfunding?
We’re in a completely different league. Equity crowdfunding platforms raise money for individual startup ventures, and we are forming a registered investment fund that invests in many startups. Equity crowdfunding operates under RegCF and RegA+ exemptions, which don’t allow you to pool money into a fund. Sweater doesn’t have that restriction. Sweater’s professionally-managed fund pools investor money to invest into private, venture-backed companies on your behalf.With Sweater, you can invest into the highest potential companies in the world at the click of a button.
What does fully-managed mean?
It means you can sit back and sip on moon juice while we drive the rocket.
You can try to find and invest into pre-IPO companies yourself, but most venture-backable companies aren’t available to non-accredited investors, so you have very few options. With Sweater, you can pool your money with other small investors and let our dedicated team of experts and analysts invest your money for you.
Our fully-managed experience includes;
Finding and vetting investment opportunities
Negotiating investment terms
Building out a full portfolio of investments
Managing relationships and needs of the founders as they build their companies
With us, you can invest in tomorrow’s technology before it’s cool.
You can try to find and invest into pre-IPO companies yourself, but most venture-backable companies aren’t available to non-accredited investors, so you have very few options. With Sweater, you can pool your money with other small investors and let our dedicated team of experts and analysts invest your money for you.
Our fully-managed experience includes;
Finding and vetting investment opportunities
Negotiating investment terms
Building out a full portfolio of investments
Managing relationships and needs of the founders as they build their companies
With us, you can invest in tomorrow’s technology before it’s cool.
How is this different from my brokerage account?
It’s nothing like it, and it’s better.
A brokerage account like eTrade or Robinhood allows you to commit money that you can then invest into public stocks and other public investment vehicles. In other words, you can’t invest money from your brokerage account into private, venture-backed companies.
When you make an investment into Sweater, that money is fully committed to a fund that is managed on your behalf. With our team of experts and analysts at your side, you can invest early in the highest potential companies in the world, lowering risk and boosting returns.
That’s true diversification.
A brokerage account like eTrade or Robinhood allows you to commit money that you can then invest into public stocks and other public investment vehicles. In other words, you can’t invest money from your brokerage account into private, venture-backed companies.
When you make an investment into Sweater, that money is fully committed to a fund that is managed on your behalf. With our team of experts and analysts at your side, you can invest early in the highest potential companies in the world, lowering risk and boosting returns.
That’s true diversification.
How will the Sweater Fund be valued?
Sweater assigns a Net Asset Value (NAV) to each fund it launches. This NAV is similar to a stock price, except it reflects the value of the portfolio of companies Sweater is investing into with that fund.
When you invest into a Sweater fund, you purchase shares at the NAV price on that date. As the Sweater team invests that money into companies that grow in value over time, the NAV also increases in value, much like a stock price. At some point in the future, should you choose to sell a portion or all of your Sweater shares, you will sell them at whatever the NAV is on that date.Or to put it simply, invest early—patiently—consistently—and build a future of financial freedom.
When you invest into a Sweater fund, you purchase shares at the NAV price on that date. As the Sweater team invests that money into companies that grow in value over time, the NAV also increases in value, much like a stock price. At some point in the future, should you choose to sell a portion or all of your Sweater shares, you will sell them at whatever the NAV is on that date.Or to put it simply, invest early—patiently—consistently—and build a future of financial freedom.
How liquid is my investment?
Traditional venture funds keep you locked into the fund for ten years or longer. We’re not about that, but we do believe in a long-term mindset. Like your IRA or 401(k), you should look at your investment in Sweater’s fund from a long-term perspective.
And when you do need to withdraw some or all of your investment, you can redeem a portion or all of your investment during one of our periodic windows. This is subject to a cap as outlined in the fund prospectus, so you may not be able to extract your entire requested amount in any given window—it is based on demand.
And when you do need to withdraw some or all of your investment, you can redeem a portion or all of your investment during one of our periodic windows. This is subject to a cap as outlined in the fund prospectus, so you may not be able to extract your entire requested amount in any given window—it is based on demand.
Who can invest
How do you "get around" the accredited investor requirement?
We don’t.
We identified a fund structure under SEC rules that would allow us to meet our investment objectives without any loopholes, new rules, or special exemptions. Some people (millionaires and billionaires) like keeping the garden parties exclusive. We’re here to change that.
We identified a fund structure under SEC rules that would allow us to meet our investment objectives without any loopholes, new rules, or special exemptions. Some people (millionaires and billionaires) like keeping the garden parties exclusive. We’re here to change that.
What is an "Accredited" or "Qualified" Investor?
Accredited or Qualified Investors meet specific financial criteria which allow them to invest into exclusive assets, like traditional venture capital funds and other “alternative” assets. Financial criteria for Accredited Investors includes a head of household making $200K+ per year for two consecutive years, or an individual owning a net worth of $1M+ outside the value of their home. A Qualified Investor is typically a fund or family office that has $5M+ in investable assets.
Sweater’s fund structure allows us to accept investments from anyone, not just Accredited or Qualified Investors. Welcome to the party!
Sweater’s fund structure allows us to accept investments from anyone, not just Accredited or Qualified Investors. Welcome to the party!
Can I invest from outside the United States?
At this time, Sweater cannot accept contributions from individuals or entities based outside the United States of America. It is our objective to open this up on a country-by-country basis as soon as possible.
Investment Thesis
What types of companies does Sweater invest in?
Sweater invests in high-growth companies that will shape the future of products we interact with in our personal and professional lives. Every company Sweater invests in offers products used by real people—consumer products, apps on your phone, or software you use at work.
Where do you find companies to invest in?
Investing is hard, and venture capital investing is even harder. It's our mission to take the guesswork out of it and invest your money seriously. That’s why Sweater takes a multi-faceted approach to finding venture-backable startups, including:
Investing alongside other partner VC funds
Hunting down opportunities through our expansive deal scout network
Purchasing shares in secondary markets
Investing directly into other VC funds
Each channel has unique processes for vetting each opportunity, and we invest alongside other VC funds wherever possible. This system of checks and balances is designed to ensure that your money works as hard as you do. So, instead of getting rich quickly, you can think of our approach as investing patiently.
Investing alongside other partner VC funds
Hunting down opportunities through our expansive deal scout network
Purchasing shares in secondary markets
Investing directly into other VC funds
Each channel has unique processes for vetting each opportunity, and we invest alongside other VC funds wherever possible. This system of checks and balances is designed to ensure that your money works as hard as you do. So, instead of getting rich quickly, you can think of our approach as investing patiently.
How much do we typically invest into companies?
Sweater invests in companies from the Pre-seed stage to Seed, Series A, and Series B. Each of these stages reflect a certain level of progress (and risk) as companies go from idea to profit to expansion. Our goal is to help finance the resources they need to maintain and accelerate their momentum, and as a VC partner, we also help them secure resources through our network.
Additionally, we explore secondary investment opportunities with companies in growth stages, usually Series C or later. These later rounds may present less of an upside, but may be profitable nonetheless.
Additionally, we explore secondary investment opportunities with companies in growth stages, usually Series C or later. These later rounds may present less of an upside, but may be profitable nonetheless.
What does your due diligence process look like?
The Sweater team consists of analysts and investment professionals who’ve assessed and invested into high-growth companies for years—we’re veterans of traditional VC strategy and even better at revolutionizing it.
Every prospective investment is analyzed individually on its own merits and within the context of its own market opportunity. Sweater also taps its retail investor base (that's you!) to provide insights into the challenges they face and the things they like. In other words, your insights and opinions shape our view of the world and how we choose to invest in companies.
We’ll take care of boring analytical work, and together let’s invest in companies changing the world.
Every prospective investment is analyzed individually on its own merits and within the context of its own market opportunity. Sweater also taps its retail investor base (that's you!) to provide insights into the challenges they face and the things they like. In other words, your insights and opinions shape our view of the world and how we choose to invest in companies.
We’ll take care of boring analytical work, and together let’s invest in companies changing the world.
What if I'm a founder seeking capital?
If you’re building a high-growth company and are seeking venture funding, we want to meet you.You can get in touch with the Sweater analyst team through one of our qualified scouts. Check through LinkedIn to see who within Sweater is most closely linked to you, and they’ll start you in the process.
