Capital Extension Program (CEP)
A streamlined way for Emerging Fund Managers and Syndicate Leads to secure additional capital for the follow-on funding rounds of their fastest growing portfolio companies.
Basic Requirements
Stage
Series A to Series D stage technology companies.
Revenue
Minimum $10MM in annual revenue.
Growth
Quarterly growth of 15%-30% or 1.5X-2X annual revenue growth.
Allocation
Fund manager or syndicate lead applying must have confirmed allocation.
Investment Size
Investment opportunities ranging from $200K to $5MM.
Structure
Priced, Preferred Financing, SAFE, or Convertible Note.
Who Qualifies for CEP?
You invested in a start-up at the pre-seed or seed stage. Now that company is growing fast and preparing for a follow-on Series-A, Series-B or Series-C round and you have been able to secure an allocation of $200K-$5MM
Emerging Managers
Syndicate Leads
Individual Investors
Apply to the Capital Extension Program
Make sure that your follow-on opportunity fits the basic requirements of the CEP program
Gather the basic information on the company and the financing round and document the necessary information in a DEAL MEMO…see Deal Memo template here
Apply to the CEP program by clicking APPLY NOW and entering the required information an DEAL MEMO data required. MDSV Capital team members will confirm your submissions and reply to your submission within 5 Business Days.
FAQs
Capital Extension Program FAQs
What is the Capital Extension Program?
Emerging Managers and Syndicate leads are excellent at identifying and investing in great companies at the very earliest stages (pre-seed/seed), but as those companies grow and complete further financings, far too often those managers and syndicate leads have no reliable way to continue to invest in the company. The Capital Extension Program (CEP) is a way for emerging fund managers or individual syndicate leads to access “Follow-On” capital to invest further into their fast-growing portfolio companies. The program is designed for investment into portfolio companies that are at the “early growth” stage, not the seed stage. The benefit to emerging managers and syndicate leads is they can access readily available capital to take advantage of follow-on investment opportunities in their best portfolio companies that are growing fast.
How does Capital Extension Program work?
Emerging Fund Managers or Individual Syndicate Leads can APPLY and confidentially submit information about a specific follow-on investment opportunity they are looking to invest into. MDSV Capital will review the information and either approve or reject the application within 5 business days. If the opportunity is approved, the MDSV Capital team will structure an SPV on the Sydecar platform with the Emerging Manager or Syndicate Lead as a co-manager, the SPV will be structured as a 2|20 SPV, meaning 2% management fee and 20% Carried Interest, the originating Emerging Manager or Syndicate Lead will split the Carried Interest with MDSV Capital 50|50.
Who is this Program intended for, who can apply?
Any Emerging Manager or Syndicate Lead who has an appropriate opportunity that fits the program’s parameters can apply, CEP is designed only for opportunities where the Emerging Manager or Syndicate Lead already has a confirmed allocation in a financing.
What are the qualifications to get approved?
The basic requirements for opportunities to get approved are below:
o “Early Growth” stage company (not seed, not pre product-market-fit)
o Typically Series-A through Series-D stage
o Typically $10MM or more in annual recurring revenues
o Predictable revenue growth rate of 1.5X or more annually
o Standard financing round structure of either a priced Preferred financing round, SAFE or convertible note
o Large market /sector
o Average size of investment opportunity is $200K-$5MM
What are characteristics of opportunities that will not get approved?
o Pre-Seed, Seed deals will not be considered
o Pre-revenue, less than $10MM in annual revenues or revenue levels that are not growing at least 15%-30% per quarter will not be considered
o Non-technology companies will not be considered
o Non-standard financing structures will not be considered
How are the terms structured if my opportunity qualifies?
Any Emerging Manager or Syndicate Lead who has an appropriate opportunity that fits the program’s parameters can apply, CEP is designed only for opportunities where the Emerging Manager or Syndicate Lead already has a confirmed allocation in a financing.
Do I get compensated for bring a fund that qualifies for this program?
If your opportunity is approved, MDSV Capital would provide the capital to make the investment. If the company achieves a liquidity event in the form of an acquisition or IPO (or possible secondary sale) then the Carried Interest will be shared with you 50/50.
Who operates/runs the Capital Extension Program?
MDSV Capital, a venture capital investment fund and emerging manager fund-of-funds based in Palo Alto California.
Who is MDSV Capital?
MDSV Capital is a venture capital fund founded by team long time Silicon Valley operators who started, built and invested in multiple successful technology companies for the last 25 years.
Where does the funding come from for Capital Extension program?
MDSV Capital has a dedicated pool of investment capital to support the Capital Extension Program of over $50MM.
How is Sydecar involved?
The CEP is powered by Sydecar’s frictionless deal execution platform. Sydecar provides end-to-end formation and management for SPVs and venture funds, with automated banking, compliance, contracts, tax, reporting, and best-in-class customer support.
What is the cost or expenses for Capital Extension Program?
There is no cost for Emerging Managers or Syndicate Leads to apply and participate in the CEP program.
Can International opportunities qualify?
Limited International opportunities can qualify for the CEP program depending on where the company is domiciled. Please submit your queries by clicking on 'Connect with us' button.
Is the Capital Extension Program only for Tech Company investments?
The CEP program is only for high-growth technology companies.
Why should I continue to invest in follow-on rounds of my Portfolio Success?
Venture Capital is defined by Power Law distributions of returns, being the pre-seed or seed investor in an “Outlier” portfolio company creates exceptional returns, but based on historical data from the last 15 years of outliers, you miss out on an additional 2x-4x your total possible returns by not taking advantage of your ability to follow-on and invest up to the eventual exit of that portfolio company.