Emerging Outliers Fund

Alpha is at the early stage and sub-$100M emerging manager funds have outperformed the market consistently for 20 years while providing LPs risk-adjusted exposure to early-stage Alpha. The MDSV Emerging Manager Alpha at Scale strategy provides LPs balanced exposure to early-stage Alpha by investing in the top-1% of sub-$100M emerging manager funds while utilizing their untapped pro-rata to invest directly in their fastest-growing portfolio outliers, which typically boast >200% annual revenue growth, exceptional founding teams, defensible IP and highly disruptive technologies. We invest in sectors aligned with the current Innovation Supercycle, such as AI, B2B Enterprise, Defense Tech, Deep Tech and the automation economy.

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Emerging Manager Funds: Exceptional Scouts of Outliers

EMFs, defined as sub-$100M funds, have outperformed larger funds* while backing a majority of the unicorns of the last 18 years.

Higher IRR

Greater frequency of returning capital

First investors in 84% of 2024 unicorns**

But EMFs are not able to fully capitalize on their best performers. This is where MDSV Capital comes in.

Less than 5% of EMFs invest beyond the seed round in their best companies, forgoing an estimated ~$150B in returns (since 2008) that make up the opportunity cost of unharvested pro-rata rights.

MDSV Capital attacks this gap by backing the top 1% of emerging manager funds and investing directly in their portfolio outliers via the manager’s pro-rata.

Interested? Talk to Us.

Source: All data on EMF outperformance sourced from Prequin, Cambridge Associates, Pitchbook and directly from Fund Managers.
*TechCrunch article and MDSV’s proprietary data.

EMF Returns Calculator

Check out our EMF Returns Calculator to estimate the early-stage alpha generated by investing in emerging manager funds. Use the secondary sale variable to evaluate liquidity options in the event of a growth-stage fund’s purchase of EMF outlier holdings.

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Sourcing Using Asymmetric Data Intelligence and Networks

We identify high-potential EMFs and their high-performing outliers through four channels.

The Promontory

Online GP-LP community

Conferences & Events

In-person GP-LP meetups

MDSV as LP

In emerging VC funds

Capital Extension Program

For follow-on funding in EMF outliers

View Our Portfolio

“Investors look to us as a balanced entry point into early-stage tech, and to scale their investments alongside high-growth outliers.”

- Michael Downing, Founding Partner

With AI making it easier than ever to start and scale a venture, startups are using the very AI technologies of this innovation cycle to do more with fewer resources. The greater operating leverage and capital efficiency afforded by AI is empowering the best startups to scale their businesses without the traditional path of late-stage capital.

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Alpha is at the early stage. MDSV Capital offers institutional investors a balanced and risk-adjusted way to allocate funds into this segment of the venture market that continues to drive meaningful alpha.

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Connect with us to learn about our Emerging Manager Alpha at Scale strategy that enables LPs to invest in the top 1% of vetted, high-performing emerging manager funds (EMFs) and their industry-defining outliers.

3,000 seed-stage investments annually today versus 300 in Silicon Valley’s last tech boom (2008-12) point not only to a 10x surge in startup formation but also to a parallel increase in the number of emerging manager funds (EMFs) who back startups at the pre-seed or seed stage.
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Evaluating which emerging funds to invest in can be a time-consuming and daunting process. MDSV Capital has 300+ vetted EMFs in its invitation-only online network, The Promontory. With historical track record and performance data for the funds and velocity and revenue growth trackers for portfolio companies, The Promontory provides MDSV a distinct edge in backing the top 1% of managers.

Connect with us to learn more about our Emerging Manager Alpha at Scale strategy.

While venture capital was once a closed community accessible only to Silicon Valley insiders, the asset class has generated tremendous interest from high-net-worth individuals in industries unconnected to technology for its potential to drive outsized returns. However, the most promising investment opportunities often only materialize through personal and professional relationships. Without the requisite network, individual HNW LPs looking to invest in top-tier deals often face a disadvantage in access.

MDSV Capital is helmed by Silicon Valley veterans with decades of experience both as serial entrepreneurs and venture investors. Investing in the fastest-growing outliers of this cycle requires a deep network and diverse access points.

Connect with us to learn how we offer LPs early and ongoing access to otherwise inaccessible investment opportunities in tech outliers.

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