Frequently Asked Questions
(Last updated as of September 19, 2022)
Yes. In general, you must have $200k in annual income, or $300k with your spouse, or $1m in net assets (excluding your primary home and mortgage). We also need to verify this information, which is completed through our platform or a letter that we ask your personal accountant or investment advisor to provide confirming the same.
Every opportunity is a bit different – but we are generally looking to invest in companies that have:
- Meaningful opportunity in GI
- A product or service that fills a significant unmet need
- Enough of their innovation (whether device, technology, pharmaceutical, service, etc.) built out to provide a degree of confidence that the innovation is moving forward as envisioned (i.e., beyond an “idea” or, typically, beyond “pre-seed”)
- Significant barriers to entry (i.e., IP, etc.)
- Clear and achievable FDA pathway, if applicable
- A dedicated and capable team, supported by one or more key opinion leaders
- Capital / capital commitments to execute plan until next financing
- An opportunity that receives positive feedback from our network or investment from a credible lead investor
In general, we have a three-phased diligence process. First, we seek feedback from relevant key opinion leaders to assess the quality of an opportunity. If the clinical feedback is positive, then we review the applicant’s business model, including the market opportunity, competition, and potential return on investment. Next, we complete a legal review, including the company’s corporate structure, intellectual property and regulatory pathway if relevant. That being said, if there is a credible lead investor already, we may leverage or rely on the diligence completed by that investor.
We endeavor to provide our companies with additional support and connections. From time to time, we may serve on the board of directors of our portfolio companies.
The manager of the fund makes decisions about the fund’s investments. You may be asked to judge or review company applications or pitch presentations if you have an interest in doing so. In addition, the fund may provide “side-car” opportunities that would allow you to co-invest with the fund in a particular investment opportunity. Please contact the manager at email@example.com to learn more.
For our funds, we generally charge a management fee and “carried interest” on investor profits. Varia shares these profits with its partner organizations. This means that once you have received a return of your capital, a portion of the excess profits will be paid to you, and a portion will be paid to the manager. You will also be responsible for certain expenses of the fund.
Once you sign the subscription documents, you are committed to fund. If your circumstances change before the initial closing of the fund, please contact the manager at firstname.lastname@example.org. You can also increase your subscription at any time through the platform.
Once you sign your subscription documents, you will wire to the fund’s bank account (wire instructions will be shared with you at that time).
Yes, you can invest using a self-directed IRA or retirement account. Please check with your brokerage firm to see if it acts as a custodian for private investments, and if it does not, please contact us at email@example.com for a recommendation to a third-party custodian that can quickly and seamlessly assist.
Yes, you can invest personally, together with your spouse as co-owners, through a trust or through a company, including an LLC.
Yes, the medical practice would be listed as the investor on the fund’s ownership table and receive on K-1.
Venture investments most commonly have 7-10 year lifespans.
Distributions are typically made upon an exit by a portfolio company and the receipt of any proceeds by the fund.
Investors can’t liquidate their positions prior to a portfolio company exit or liquidation of the fund at the end of its lifecycle (which is generally 10 years).
The manager will provide you with investment and other updates from time to time on your investor dashboard or via email.
The manager provides all investors their K-1s electronically and free of charge. These will be provided on your investor dashboard.