Regulation D

THE SYNDICATE MODEL

Bioverge has partnered with Assure Fund Management to create, manage, and administer each Syndicate. Bioverge Funds Management LLC acts as the advisor to each Syndicate.

FOR INVESTORS
BENEFITS

The purpose of the Bioverge Fund is to enable access and democratize the investing landscape in early-stage healthcare. Bioverge Funds provide access to highly vetted opportunities, allowing accredited investors to invest smaller amounts of capital into an individual startup, and enabling investors to build a more diversified portfolio.

WHO CAN INVEST THROUGH A BIOVERGE FUND?

Under Reg D (506b and 506c), only accredited investors may invest through a Bioverge Fund.

An “accredited investor” is defined in SEC Rule 506a of the Securities Act of 1933. In order to meet the definition of accredited, you must meet one of the following requirements:

  • Have individual net worth, or joint net worth with your spouse exceeding $1 million
  • Have income exceeding $200,000 in each of the past 2 years and expect the same this year
  • Have income (with your spouse) exceeding $300,000 in each of the past 2 years and expect the same this year
  • Invest on behalf of a VC firm or other registered investment company
  • Invest on behalf of a business with $5 million in assets or in which all the equity owners are accredited

You can refer to the SEC website for additional information here.

Bioverge takes reasonable steps to verify the accredited investor status of each prospective investor. This may include an investor's self-certification, checking publicly available information and gathering specific documentation from such investor as applicable.

For 506c offerings, we work with a third party to verify your status as an accredited investor prior to accepting funds.

WHAT FEES DOES BIOVERGE CHARGE TO INVESTORS?

Bioverge is not compensated with any management fees or transaction-based revenue. Our compensation comes from carried interest, which is a share of the profits upon a successful investment exit, typically set at 20%

There is also a standard administrative fee charged to investors that to cover the costs of operating the Bioverge Fund over the entire life of the entity, including regulatory filings, accounting, and K-1 distribution. These fees are held within the Bioverge Fund to operate the fund to maturity without any further contributions from investors.

Bioverge has partnered with Assure Fund Management to create and administer our Bioverge Funds for all Regulation D offerings. The administration fee is passed through to Assure in its entirety at the time of closing. If there is any amount left over at the end of life of the Bioverge Fund, it will be returned to investors.

HOW DO I SELL MY REGULATION D INVESTMENT?

Investments in private companies are illiquid and cannot easily be sold. Investors may earn a return by selling the investment when the startup achieves a liquidity event, such as the sale of the company or an IPO. When this occurs, investors receive their pro-rata share of the returns generated from the investment.

While you are restricted from doing so for the first 12 months post closing, per the SEC’s Rule 144, you may exit your investment by selling a security privately to a limited set of prospective buyers, so long as you have held your security for at least a year and are not an “affiliate” of the company (i.e., you are neither an officer of the company nor a shareholder with a greater than 10% stake in the company). Even still, it’s best to assume there won’t be anyone willing to buy your stake!

Bioverge Funds Management LLC will advise Assure Fund Management (the fund manager) when to sell the securities and distribute returns to investors. We will always act in the interests of the investors in the Syndicate. Our compensation is directly tied to maximizing the value of the fund.

It is important that you acknowledge the indefinite holding period and real risk of total loss of your investment when investing capital. Only invest what you can afford to lose.

HOW DO I EARN A RETURN?

Of course, when investing in something as risky as a startup, there may be no return at all.

That being said, should a company’s value rise over time, your investment is also likely to accrue value on paper. If not equity, most startups will use a convertible note or SAFE Agreement to raise funds. The note or SAFE can be converted to company equity if the company raises a "priced equity round" at a later date.

It is important to realize that notes/SAFEs and preferred equity shares are not easily traded or sold. Generally, you will not receive a liquid return unless the company experiences a liquidity event, such as (a) going public or (b) getting acquired by another company.

If you invest through a Bioverge Fund, you will hold a share of the Bioverge Fund instead of holding the company's securities directly. We will manage and sell the company's securities on your behalf and distribute any proceeds to you upon such a sale.

IS THERE AN INVESTMENT MINIMUM?

Investors can invest as little as $2,500 in a Syndicate (investment minimums are always clearly outlined in the deal profile and in the Subscription Document).

FOR COMPANIES
BENEFITS

For startups, the Syndicate structure ensures only the Bioverge Fund appears on your capitalization table. This is beneficial to ensure your follow-on financing won't be at risk. Venture capitalists and institutional investors don’t like a “messy” cap table consisting of a large number of small investors. With a Syndicate, these smaller investors are aggregated and represented by a single entity.

This is also an opportunity to invite individuals in your network to participate that wouldn’t be able to participate otherwise due to a relatively small check size and associated challenges.

If you are interested in a Reg D offering, please contact us at info@bioverge.com.

The Syndication Process

Generally, investors can invest as little as $2,500 in a Syndicate. For each deal, investment minimums are outlined in the deal profile and in the Subscription Document. Syndicates are limited to only accredited investors up to a maximum 99 investors per syndicate.

Once a minimum threshold is met (typically $80,000) the Syndicate is created. Investors who have indicated interest through the platform will then sign documents to invest in the Syndicate. Each Syndicate consists of the following deal documents:

  • Operating Agreement
  • Private Placement Memorandum
  • Subscription Agreement

Syndicates are intended to be passive investment vehicles and will in most cases accept the terms offered by lead investors and will typically waive voting rights.

Syndicates are not liquid investments. As with direct investing, investors should expect to have their capital tied up for several years and be prepared to lose 100% of their investment.

We do not charge companies fees to startups under the Reg D offering type. Bioverge is compensated based on carry, which is paid by investors upon a successful liquidity event.

For Regulation D offerings, accredited investors are aggregated into a Bioverge Fund Special Purpose Vehicle (“Bioverge SPV,” “Bioverge Fund,” or “Syndicate”) which is formed for the specific purpose of investing in a startup. By investing through a Bioverge Fund, you will hold a share of the Bioverge Fund instead of holding the company's securities directly.

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