Nebula Ventures is a New York City based alternative asset investment firm, with our interest spanning the full spectrum of alternative assets.
Our key focus areas are:
Real Estate, Commercial Business, Fine Art, Legal, Impact and Venture Capital.
Through our digital platform, we’ll be providing accredited investors located within the United States with access to unique deals in these verticals.
We also offer business consulting services, specializing in marketing, finance and strategy.
Our team operates across Australia and North America and together, we leverage our global network to find the best investment opportunities and bring our portfolio companies the partnerships and value they need to grow.
The Space Investment Platform
Scalable debt platforms and crowd-funded real-estate is something we’ve been speaking about since January.
Three months ago, we started researching more deeply, to understand what was in the market. Specifically, we sought to understand who the players were, what they were offering on their platforms, understanding their marketing and lastly, how successful they were. The results were eye-opening.
Set out below are three of the market leaders in crowd-funded commercial real estate and debt opportunities. What makes them special is their utilization of e-commerce marketing methodologies and technologies which are deeply tapping into the accredited investor markets in the United States.
Unsurprisingly, their deals are selling out in a matter of days.
funded to date
YieldStreet operate out of New York City. They do an exceptional job of marketing their investment opportunities and funding interesting deals.
Currently, YieldStreet have approximately 177,000 investors and grew this membership base via digital advertising on Facebook, LinkedIn and Google.
CrowdStreet give investors direct access to individual commercial real estate investment opportunities, allowing them to review, compare, and personally choose the deals that meet their own investment criteria.
CrowdStreet also offer managed funds and advisory services.
Similar to CrowdStreet, Fundrise provides investors with individual and portfolio based real estate opportunities.
Market SIZE OF ALTERNATIVE ASSETS
PROJECTION OF ALTERNATIVE ASSETS IN USD TN
Private markets AUM now totals $5.8 trillion (Source: Prequin)
the growth of of private debt
Prior to 2008, private debt was deemed a peripheral asset class. Since then, with the decline of traditional lenders comes growing opportunity for the private debt industry. Combined with investors increasingly seeking to increase yield in an ultra low interest rate world, the market is providing good prospects for private debt funds. It is no longer the case that alternative assets are ‘alternative’.
In 2015, the private debt market reached a record-breaking total of roughly US$107 billion, globally.
Of this, US$67 billion was raised by funds in the United States.
The global market size of private debt has since exceeded to its current total of US$600 billion. This number is set to increase to US$1.4 trillion by 2023. If these predictions prove correct, the private debt market will overtake real estate to become the third largest alternative asset class.
Private debt investors surveyed by Prequin reported that 91% felt that private debt met or exceeded their performance expectations in 2010.
This is because these alternative asset classes provide:
- returns with low correlation to other asset classes;
- reduce volatility;
- generate reliable income; and
- offer an inflation hedge.
Additionally, the top 3 reasons for investing in private debt have been reported to be:
- Track record: Between 1997 and 2014, private debt outperformed two key fixed income indices: global high yield, US investment grade.
- Diversification: Low correlation with other asset classes, high returns and low volatility.
- Defensive nature of private debt
the lending market size
The growth of private debt means that more lenders are competing on price and terms, on unprecedented levels.
In 2017, $52.6 billion was raised in direct lending funds.
Prequin predicts that the alternative assets industry will grow to reach $14 trillion in size by 2023. Of that, Prequin estimates that the private debt market will double in size, and in doing so, overtake the real estate market to become the third largest alternatives industry.
Alternative assets are a vital part of the portfolios of the cast majority of sophisticated institutional investors and will continue to play an even more important role.
A further prediction provided by Prequin suggests that 84% of investors plan to increase their allocation to alternatives over the next five years. Alongside the pursuit of higher returns, a contributory driver is the significant shrinkage in many key global public markets over the past two decades.
(SOURCE OF ABOVE IMAGES: PREQUIN)
Our MVP is built. Visit www.nebulaventures.com
version 2: Digitization
Version 2 of the platform will involve a complete digitization of the customer experience, using the technology set out below.
version 3: asset allocation
Version 3 will see the platform move away from asset aggregation and into asset allocation.
Plaid allows us to connect accounts from any US bank. Through this software, we can set up ACH transfers from any bank or credit union in the US
We can also retrieve account and routing numbers when users connect their checking or savings accounts using bank credentials
Dwolla offers a secure, scalable and reliable way for us to move money. Their white-label API is developer-friendly and will easily integrate with our application.
Founded in July 2012, Onfido is a software company that will verify our investors identities using a photo-based identity document, selfie and artificial intelligence algorithms.
Carta is a Palo Alto based fund administration technology company that specializes in capitalization table management and valuation software.
WHY WE like this opportunity
the problems we are solving and the opportunity areas identified
- With interest rates dropping and a toppy equities market, investors are now looking to earn a safe and better return on their idol money.
- Alternative assets can offer security and higher returns.
- Frictionless investing experience – education, investment deal room, digital mobilized wallet (version 2).
- Access to interesting alternative ivestment opportunities.
- Only a handful of platforms are utilizing modern-day marketing, which taps into large data sets on Facebook and Linkedin, allowing them to acquire investor funds at scale. Having studied these techniques, we plan to not only adopt them, but improve on them.
Risks & mitigants
the risks involved in creating an alternative asset platform
- Finding adequate deals may be challenging, as deals which are typically ‘sought after’ are filled via private networks.
- The large market size, estimated to be US$15.3 trillion by 2023, means there will be sufficient deal flow for both private and online portals (Source: PwC Market Research Centre, based on Prequin, HFR and Upper Data. Also see chart above in ‘Market Size’).
- The traditional capital raising process contains far more friction compared to an online portal, in which Nebula Ventures will handle all marketing, investor communications and collection of assets.
- Leveraging our own private network of originators and sponsors, who are looking to diversify their own capital pool.
- Failing to comply with Regulation D of the Securities Act and filing Form 506(C). Regulation D (Reg D) is a Securities and Exchange Commission (SEC) regulation containing the rules prescribing the qualifications needed to meet exemptions from the registration requirements for the issuance of securities.
- Reg D is intended to make capital markets more accessible for small companies that could not otherwise bear the costs of a normal SEC registration.
- Nebula Ventures will be working with US based securities lawyers to ensure each deal meets the 506 (c) criteria. Furthermore, we will use a proven corporate structure – Series LLC (the same structure that our main competitor, YieldStreet) uses. Lastly, our onboarding process ensures each investor proves their accreditation status.
- All of our deals will be established via the methodology this law firm who specializes in Reg D offerings sets out.
- E-commerce marketing will fail to generate investor sign ups.
- Using e-commerce marketing methodologies, which are also used by our competitors, we can A/B test our marketing and pin-point where investors are dropping-off in the marketing funnel.
- Using a free tool like SimilarWeb, we can see where our competitors are getting their traffic from and advertise in the same place.
- Companies such as YieldStreet, FundRise, CrowdStreet and Cadre already exist and are successful. Why would investors choose Nebula Ventures’ Alternative Asset Platform if these other platforms exist and are having proven success?
- Prequin expects that the market size for alternative assets to exceed US$15.3 trillion. This is large enough for multiple players to exist and simultaneously be successful.
- Our competitors are not 100% perfect. We intend to leverage their current strategies across advertisements, visual information displays and educational content, and furthermore, improve on it, with the ultimate goal of making our platform better.
- With each deal being an SPV, the administration can become cumbersome.
- Through leveraging the technology previously mentioned, we can streamline and automate our processes.
- Furthermore, this technology will allow us to safley store investor information, as well as track and manage cap tables.
FOR THE alternative asset platform V1
1-3% Management Fee, paid out quarterly.
what does success look like?
Through our global team, we offer a range of services to help clients achieve their goals, including the following:
- Content production;
- Research; and
- …the list goes on.
Watch one of our client’s, Vid, testimonial below.
We’re confident that business consulting is a powerful arm to the Nebula Ventures business because it will provide the business with cashflows and help us keep our network active. Through these engagements, we’ll also take equity where it makes sense – some of these equity deals may result in longer-term success.
Consulting engagements require significant resources – and we’ve established a stellar team to help deliver exceptional value for our clients.
Our team is comprised of professionals from a range of disciplines. With every engagement we undertake, we take pride in bringing diversity to the table.
jag, co-founder of vid
what does success look like?
US$250,000 revenue by April 2020.
By March 2020, we will have engaged the following clients:
- One deep advisory client (Vid); and
- Two passive advisory.
How do we find these clients?
To date, all of our clients have been procured from within our network.
Moving forward, and depending on how quickly we win new clients, we will source opportunities online through social media marketing, noting that this will be driven through content.
SpaceBid is a matchmaking marketplace business for tenants and landlords.
Tenants can list their space requirements for free.
Tenants' identities are only revealed if they receive a proposal and request a meeting with the landlord/developer.
The tenant will have to answer ten simple questions for each space requirement. For example: location, NLA, preferences and rental range.
The tenant will receive proposals from landlords and developers free of charge.
If a tenant requests a meeting with a landlord, the landlord receives “Award Points” for each meeting they accept (valued at $40).
Award Points can be converted into goods such as holidays, desks, bikes, etc.
for landlords & developers
The tenant will receive proposals from landlords and developers free of charge.
Landlords can obtain a list of anonymised tenants that are interested in the landlord’s space.
Landlord can send a proposal with respect to their space to the list of tenants for $100 / proposal.
If the tenant requests a meeting with the landlord, landlord pays a further $300 per meeting request.
payment to spacebid
In addition, for any lease signed, Landlord agrees to pay SpaceBid a 5% commission of the first year’s rent.
For each landlord’s vacant space or building:
- Based on 75 submissions sent: 75 x $100.00 = $7,500.00
- Based on 10 meeting requests: 10 x $300.00 = $3,000.00
- Based on one lease signed over part of the space = 5% commission = $4,500.00
- Total fees: $15,000.00 per vacancy
If we generate 700 landlord interactions per year = $10.5 million in revenues per annum.
We feel that all three businesses are complimentary to one another and with the current team in place, along with funding support, we’re in a strong position to deliver these projects.