A Strong Heritage in the Venture Fund Industry

Adams Street’s heritage in the venture fund industry began with our first U.S. venture fund commitment in 1979. Venture capital fund investing provides access to global technological innovation and entrepreneurship, which in turn has provided the opportunity for outsized private equity returns. The rapid pace of technological innovation continues unabated. This includes areas within information technology (semiconductors, material sciences, hardware components and systems, infrastructure and software development) as well as healthcare (medical devices, biotechnology and information services).

Venture capital partnerships include early-stage venture capital partnerships, which invest in businesses still in the conceptual stage (start-up or seed), or where products may not be fully developed, and where revenues and/or profits may be several years away; and later stage venture capital partnerships, which invest in more mature, yet still relatively small, companies in need of growth or expansion capital. Adams Street views the global venture IT and healthcare sectors as attractive for investment. Adams Street expects its investment allocation to the U.S. venture capital subclass to be 30-35% over the next several years, an overweight relative to the market, and its non-U.S. target allocation to the subclass is expected to be 10-20%.

Distinguishing Characteristics

Adams Street prefers to commit to venture capital firms that have sustainable competitive advantages with strong relative franchise value. Distinguishing characteristics of successful venture capitalists include:

  • Differentiated, High-Quality Deal Flow
    Access to the most highly intelligent, highly motivated entrepreneurs with the ability to innovate and move quickly to exploit new opportunities and create significant value for investors.
  • Extensive Domain Expertise
    (i.e., operating and/or technical experience) necessary to assess opportunities and add value post investment.
  • Proven and Demonstrated Track Record
    Consistent with the investment strategy and defensible through business cycles.
  • Stable and Complementary Investment Team
    With a history of success investing together.