Fintech platform Floww is addressing a core challenge of venture capital – simplifying the structuring, raising and deployment of funds.
Today, the company has launched FlowwFunds, a comprehensive solution to streamline . A key innovation of FlowwFunds is the use of Floww Certificates, a globally tradable instrument which creates liquidity and is secondaries ready.
Supported by early adopter funds, including Force Over Mass, FlowwFunds is poised to bring improved transparency, efficiency, and accessibility to VC fund management.
Venture firms spend an extensive amount of time, effort, and resources in fundraising and fund management, diverting focus away from their key objective: to identify and invest in promising businesses and deliver returns to Limited Partners. Meanwhile, traditional 10-year lock-up periods are a challenge as private companies stay private for longer, and the cost of capital goes up, along with expectations on returns. As a result, LPs are rethinking the asset class. An effective secondary market is needed to shorten the time of the investment.
The process of establishing and managing a fund can be challenging. Most workflow processes rely on emails, static files, and data rooms, resulting in fragmented solutions and a remarkably inefficient system.
Floww recognised an opportunity to solve the problem of the fund structure, create efficiency, and re-engineer the fund with secondary by design, developing FlowwFunds - a new full fund management solution.
“The Venture Capital sector is in need of innovation and streamlining to function more efficiently. By addressing challenges that VCs face while running their funds, we believe we can unlock further growth and innovation across the ecosystem,” said Martijn de Wever, Founder and CEO of Floww.
Expanding on this, de Wever added, “Innovation and private companies are often starved of capital as VCs are overburdened with archaic and admin-heavy processes, leaving them too little time for deal flow and value-add for entrepreneurs. With FlowwFunds, we have created an efficient avenue for structuring, raising, and deploying capital, freeing VCs to focus on what they do best. As part of FlowwFunds, Floww Certificates are globally tradable certificates that are secondaries ready, offering increased liquidity to investors while retaining tax benefits. It’s a game-changing approach designed to drive success in venture capital and faster returns."
FlowwFunds is a full-stack solution. It uses the latest in SaaS technology and Floww’s expertise in fund structuring and management to offer a single and streamlined platform for venture capital funds. It simplifies fund structuring, raising, and deployment and eliminates the administrative hassle, providing everything from building the Investment Management Agreement (IMA) through to custody, regulatory reporting, investor reporting, and paying agent services in one solution.
It empowers VCs to efficiently manage their portfolios and discover new revenue and fee opportunities. Additionally, the innovative structure integrates secondaries by design to facilitate greater liquidity, using Floww Certificates. This enables the creation of new types of funds, a more desirable asset class with flexible, shorter lock-up periods.
de Wever added, “In light of the UK Chancellor’s Mansion House Reforms, FlowwFunds addresses a compatibility problem between pension funds and venture capital. It provides the pension industry with a simpler means to allocate into VC funds using the FlowwFunds solution. It provides access to a wide range of sectors with insight into the most granular level and the right governance framework to deploy and track large amounts of capital. We are solving both technical and structural problems at the foundation of this large-scale ambition for pension funds to invest £50 billion into VC by 2030 whilst addressing outstanding liquidity challenges that the current venture capital industry faces. We are bringing a true working secondary market for companies and funds. Moving capital with the speed of innovation.”
Force Over Mass is one of the first VC firms to raise two funds on the FlowwFunds platform. The VC is raising a Seed and Growth fund focusing on B2B tech startups.
Floww aims to reboot and rewire private markets by building an integrated infrastructure to support a new generation of ambitious entrepreneurs and investors.
Scaling brands that have recently raised on Floww include SuperFi, the first platform focused on solving the UK’s debt problem; PubX, the tech innovator using AI to disrupt the publishing market; and Careless Insurance, which is revolutionising the personal items insurance market.
By on Wed, 08 Nov 2023 10:32:00 GMT
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