Covington-based venture capital firm Connetic Ventures launched an in-house investment product that is SEC-approved.
On Thursday, Connetic Ventures unveiled the Connetic Venture Capital Access Fund, a closed-end interval fund that allows non-accredited investors to invest in privately owned technology and consumer product companies. The fund will be listed under the ticker $VCAFX.
Traditionally, investors cannot access private companies through public markets. Those markets are typically only accessed by institutional and high-net-worth investors. Brad Zapp, co-founder and managing partner of Connetic Ventures, said the fund will expand his firm’s product offerings.
The fund is highly diversified and holds close to 100 private companies in the early growth stage. It’s also IRA-eligible and has no carried interest built into its fee structure. Zapp told LINK nky that Connetic Ventures started developing the fund in 2022.
“I would make investment recommendations to a lot of people in this city and you couldn’t get access to the private markets for all the varying rules and hurdles that made it really difficult,” Zapp said.
The fund also utilizes in-house software called Wendal, which analyzes prospective portfolio companies and then provides the financial adviser with what it believes to be unbiased recommendations on which are appropriate for investment.
“Wendal is a cloud-based bot that allows Connetic Ventures the ability to do data-driven investing, quick decision making and automation of a previously very manual due diligence process,” Wendal Chief Technology Officer Joe Wendt said in a press release. “A founder can seek investment from Connetic Ventures using Wendal from anywhere in the world with the ease of an internet connection.”
Zapp worked as a wealth advisor before co-founding Connetic Ventures with Kyle Schlotman in 2015. Prior to registering with the U.S. Securities and Exchange Commission, Connetic Ventures managed over $50 million in assets. For Zapp, launching the Connetic Venture Capital Access Fund is the culmination of years of work.
“It means everything,” Zapp said.
Zapp said he started his financial career in what he calls the “Lost Decade,” which lasted from 2000 to 2010 and saw the Dot-Com Bubble and the Great Recession – two of the most significant financial black swan events in the history of the United States economy.
“That really forged in my heart this problem that needed a solution,” Zapp said. “You needed a product that could be sold to non-accredited investors to take an alternative investment allocation – alternative to stocks and bonds – and so I’ve really been searching to be able to build a strategy that would fit inside a registered product.”
