Thesis

The world is decades behind in pandemic preparedness. The Pandemic Impact Fund Invests in tech companies innovating in pandemic detection, mitigation and resilience.  These companies flourish in a healthy climate, but also deliver solutions for today’s and future pandemics. The fund targets companies which promise upper quartile returns.

Fund Criteria

The Fund seeks to invest in companies that will have significant impact in the detection, mitigation and response to pandemics and in sustaining resilient communities during pandemics and their economic aftermath.  As a venture fund, Pandemic Impact Fund is looking to help early-stage Seed and Series A companies reach a point of scale where their impact can scale as an output of the business’ success. Pandemic Impact Fund will invest solely in for-profit companies. Not a Relief Fund The Fund is not a “relief” fund that works by providing funding to distressed communities, nor is it investing in commodities such as Personal Protective Equipment.  Instead, it is focusing on venture capital investments with upper quartile return potential (2.5-3X investment) that have true innovation and barriers to entry and competition. Pandemics and In-Between The companies identified for the Pandemic Impact Fund must have outstanding opportunity during pandemics and their economic aftermath and also have potential for excellent returns with market opportunities outside of current pandemics.  Visit our Portfolio page to see some examples of these companies. Not Just a Healthcare Fund The Pandemic Impact Fund addresses the many spheres of pandemics including, but not limited to healthcare.  The Fund intends to invest in health care companies that innovate in drug development with AI platforms, distribute drugs through needle-free technologies, increase the scale of telehealth offerings, and otherwise allow healthcare systems to operate more efficiently and effectively in times of overload. While pandemics start with healthcare, there are many technologies that do not touch the life sciences that allow communities to identify, track and control the spread of viruses.  Other companies innovate in creating economic resilience in communities that are impacted by pandemics.  The Fund addresses companies that create positive impact in detection, mitigation and response while creating resilient communities.

Investment Size

The Fund will be diversified with a likely portfolio of between 20 and 30 companies.  No single investment will comprise more than 10% of the committed capital of the Fund.  The average initial investment in portfolio companies is anticipated to be between $1,000,000 and $2,500,000, depending on the final amount of committed capital in the Fund.

Geography

The Fund’s impacts may be global, but its investments are expected to be only in the United States. The Pandemic Impact Fund leverages a strong network and deal flow from Colorado and surrounding states. The Fund anticipates 50% or more of the portfolio to be in this region, but it is not exclusive to the Rocky Mountain region. Rockies Impact Fund will co-invest with other funds and investors from around the U.S.

Company Stage of Development

The Fund shall invest in Seed and Series A early stage companies that have significant traction to justify their valuation.  The Fund reserves about 50% of committed capital for follow-on in later rounds which may be Series B or Series C, based on our pro-rata options. Most companies should be anticipating revenues within six months, if not already there.  The most common use of funds invested in portfolio companies will be to finalize technology and to take the product or solution to market within a short period of time.  Most companies will have raised pre-seed funding in a “friends and family” round in order to get to where they are at the time of the Fund’s investment.

Corporate Entities

The Fund will generally invest in C Corps.  The Fund will typically not invest in LLC or S Corps in order to avoid ordinary income tax liabilities for pass through profits.

Investment Exclusions

The Fund will not invest in public companies, fossil fuels, oil and gas exploration, or real estate.

Characteristics

Companies to be selected by Pandemic Impact Fund share these common characteristics:
  1. Team: the teams will be experienced, connected and have demonstrated an ability to execute and work effectively together.  The Fund will focus primarily on the team because it is generally understood that no company executes its plan as stated in its initial pitch and the Fund will look for the leadership, wisdom and experience to pivot and adjust to opportunities and threats that present themselves.
  2. Mission: Mission-driven, for-profit businesses that fall within the Fund’s target impact categories.
  3. Disruptive or Innovative Product: The Fund will look for companies with a product or service that is unique and presents a clear value proposition for its customers.  There should be sufficient barriers to entry either through trade secrets, patents or significant market adoption in order to gain and maintain their market.
  4. Large or growing market: The Pandemic Impact Fund companies are to be projecting growth typically at the rate of 100% every year.  They need to be in a sufficiently large or dynamic market that this rate of growth can continue for several years and provide promise of future growth for potential acquirers.
  5. Traction:  Since the Fund does not invest in ideas alone, the portfolio company will need to be able to demonstrate traction.  They need to have overcome major obstacles that clearly demonstrates their ability to execute.  Furthermore, they should have positive momentum that Fund management can see throughout the process of working with them.
  6. Profit Potential: Companies need to have a high profit margin and understand the costs of multi-tier distribution and all of the fully loaded costs.  While some companies will focus on growth as a pathway to exit, others will need to focus on a solid bottom line.
  7. Scalable: The products and markets need to be able to grow quickly and to have rapidly increasing margins as the company grows.  This excludes most service businesses and many businesses that address the SMB market and require a high-touch sale.
  8. Market Timing: The Fund shall seek out opportunities that are neither too early into the market, requiring an evangelist approach, nor too late into the market where there are many competitors and little differentiation.
  9. Exit: The Pandemic Impact Fund focuses on companies that understand the importance of the exit and the role it plays in returning capital to investors.  The Fund will look for an exit scenario with multiple bidding acquisition prospects, with high multiples of EBITDA or sales, and with a relatively short timeline, typically between three and seven years.   The Fund’s manager will actively coach the companies towards developing relationships early in their lifecycle that will lead to favorable exit opportunities.
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