Deep Dive Presentations

Each week our analyst team reviews an emerging trend. In it, we outline macro-trends, industry sub-sectors, key influencers and luminaires, market leaders, and potential investment opportunities.

Access This Week’s Deep Dive Replay: Tissue Engineering

We are not soliciting investment. This presentation is only to provide information on the given topic. Investing in Venture Capital has Significant Risk.

NO AMOUNT OF DILIGENCE OR DIVERSIFICATION CAN ELIMINATE THE RISK THAT INVESTORS IN EARLY STAGE PRIVATE DEALS MAY LOSE THEIR ENTIRE INVESTMENT. BEFORE INVESTING ANY AMOUNT, IT IS IMPERATIVE TO REVIEW THE PRIVATE PLACEMENT MEMORANDA OF EACH OF ISELECT FUND – ST. LOUIS, LLC, ISELECT FUND B – ST. LOUIS, LLC AND EACH PORTFOLIO COMPANY TO UNDERSTAND THE UNIQUE RISKS FOR EACH COMPANY. RISK FACTORS TO CONSIDER, INCLUDE BUT ARE NOT LIMITED TO THE FOLLOWING:

BY SUBSCRIBING TO AN INVESTMENT IN ISELECT FUND, AN INVESTOR WILL NOT DIRECTLY OWN PORTFOLIO COMPANY SECURITIES. INSTEAD, PORTFOLIO COMPANY SECURITIES WILL REMAIN UNDER THE OWNERSHIP AND CONTROL OF THE FUND.

INVESTMENTS BY THE ISELECT FUND IN PORTFOLIO COMPANY SECURITIES ARE ILLIQUID AND WILL NOT BE TRANSFERABLE FOR THE FORESEEABLE FUTURE. INVESTORS WILL HAVE NO WAY TO LIQUIDATE THEIR INVESTMENTS FOR A SUBSTANTIAL PERIOD OF TIME.

ALL PORTFOLIO COMPANIES ARE EARLY STAGE COMPANIES AND THERE IS SIGNIFICANT RISK THAT EACH PORTFOLIO COMPANY WILL FAIL AND INVESTORS WILL LOSE ALL OF THEIR INVESTMENT.

THE OFFERING PRICE FOR PORTFOLIO SECURITIES IS DETERMINED BY EACH PORTFOLIO COMPANY. THERE IS NO THIRD PARTY VALUATION OF THE OFFERING PRICE FOR SUCH SECURITIES.

MEMBERS OF ISELECT FUND’S INVESTMENT COMMITTEE AND SELECTION COMMITTEE MAY BE ACTIVELY INVOLVED IN BUSINESSES WITHIN THE SAME INDUSTRIES AS SOME OF THE PORTFOLIO COMPANIES. THERE CAN BE NO ASSURANCE THAT THE SELECTION COMMITTEE’S VIEW OF A PORTFOLIO COMPANY (OR OTHER COMPANIES NOT SELECTED TO BECOME PORTFOLIO COMPANIES) WILL NOT BE INFLUENCED BY ONE OR MORE MEMBER’S PERSONAL BIASES FOR OR AGAINST A PARTICULAR COMPANY.

THE SALE OF SECURITIES BY ISELECT FUND AND EACH PORTFOLIO COMPANY WILL NOT BE REGISTERED UNDER FEDERAL OR STATE SECURITIES LAWS. SUCH OFFERINGS WILL NOT BE REVIEWED BY THE SEC, ANY STATE SECURITIES COMMISSION, FINRA OR ANY OTHER REGULATORY AGENCY.

INVESTMENTS IN THE PORTFOLIO COMPANIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. IN GENERAL, FINANCIAL AND OPERATING RISKS CONFRONTING THE PORTFOLIO COMPANIES CAN BE SIGNIFICANT. A LOSS OF PRINCIPAL IS POSSIBLE. THE TIMING OF PROFIT REALIZATION IS HIGHLY UNCERTAIN. ADDITIONAL CONSIDERATIONS INCLUDE LESS LIQUID MARKETS AND LESS AVAILABLE INFORMATION THAN IS GENERALLY THE CASE IN PUBLICLY TRADED SECURITIES, AS WELL AS LITTLE OR NO GOVERNMENT SUPERVISION OF THE PORTFOLIO COMPANIES’ DEALINGS, AND THE LACK OF AUDITED FINANCIAL STATEMENTS. EARLY STAGE AND DEVELOPMENT STAGE COMPANIES OFTEN EXPERIENCE UNEXPECTED PROBLEMS IN THE AREAS OF PRODUCT DEVELOPMENT, MANUFACTURING, MARKETING, FINANCING AND GENERAL MANAGEMENT, WHICH, IN SOME CASES, CANNOT BE ADEQUATELY SOLVED. SUCH COMPANIES OFTEN DO NOT GENERATE REVENUE OR SUFFICIENT REVENUE TO COVER THEIR EXPENSES. THEREFORE, SUCH COMPANIES MAY REQUIRE SUBSTANTIAL AMOUNTS OF FINANCING WHICH MAY NOT BE AVAILABLE THROUGH INSTITUTIONAL PRIVATE PLACEMENTS OR THE PUBLIC MARKETS. MOREOVER, ADDITIONAL FINANCING COULD HAVE A SIGNIFICANT DILUTIVE IMPACT ON A SUB-FUND’S OWNERSHIP INTEREST IN A PORTFOLIO COMPANY. NO ASSURANCES CAN BE GIVEN THAT ANY OF THE PORTFOLIO COMPANIES’ PRODUCTS WILL BE SUCCESSFULLY MARKETED AND/OR SOLD IN SUFFICIENT VOLUME TO GENERATE A PROFITABLE OPERATION. THE PERCENTAGE OF COMPANIES THAT SURVIVE AND PROSPER IS SMALL.

FEES PAYABLE TO ISELECT FUND AND/OR BROKER DEALERS WHOSE CLIENTS PURCHASE INTERESTS IN ISELECT FUND WILL REDUCE THE RETURN TO INVESTORS. BY INVESTING DIRECTLY IN PORTFOLIO COMPANIES, INVESTORS WILL AVOID PAYING A MANAGEMENT FEE AND CARRIED INTEREST TO ISELECT FUND AS WELL AS ANY APPLICABLE BROKERAGE COMMISSIONS OR FEES.

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.