Guaranteed Venture Portfolio Loans
Transforming venture capital investment through innovative risk management
Traditional Venture Capital Expectations
Traditional Risk & Reward
- • Investors bear vast majority of Financial Risk
- • Investors receive vast majority of Financial Reward
Transforming Risk Profiles
Traditional VC Risk Distribution
GVPL Risk Distribution
Learning from surety structures in other industries, we can invest in targets in a manner which satisfies the criteria of guarantors so that they can provide insurance for investors to give certainty of timing of returns.
By creating a structure that meets the requirements of fixed income investors and insurers alike we can provide attractive regular guaranteed returns and appropriate premiums.
Key Benefits
- • Investors now have minimal risk, only that of timing of portfolio returns & management of insurers
- • Insurers bear risk of timing for large upfront premiums
How GVPLs Work
The Guaranteed Venture Portfolio Loans concept was created by New Model and taken to market.
Process
- • New Model identifies private companies, predominantly in the UK, that are at an inflection point with their growth and seeking funding
- • New Model provides equity funding* via an SPV by raising Guaranteed Venture Portfolio Loans (GVPLs) – where investors' principal and returns are guaranteed
*The equity funding has a non-participating preference multiple
Benefits for All Parties
- • Investors have certainty of returns and timing
- • Insurers receive substantial premiums for providing comfort as to timing
- • High Growth businesses access capital and a team with experience
- • New Model captures the value created by their investment decisions
The Role of Insurers
Key Benefits
Substantial upfront premiums for providing timing comfort
Risk Framework
Clear risk assessment framework based on established surety structures
Portfolio Approach
Portfolio approach reduces individual investment risk
Risk Management
Structured approach to risk assessment and management
Active Monitoring
Active portfolio monitoring and management
Investor Evaluation Process
Investment Criteria
- Fixed income investment profile
- Guaranteed principal and returns
- Certainty of timing on returns
Evaluation Tools
- Comprehensive evaluation framework
- Due diligence process aligned with institutional requirements
- Regular reporting and performance monitoring
Market Response & Development Process
Insurer Due Diligence Process
Initial Assessment
Review of concept and preliminary risk analysis
Detailed Analysis
In-depth evaluation of risk management framework and portfolio approach
Structural Review
Assessment of legal and financial structures
Terms Development
Negotiation and finalization of insurance terms and conditions
Investor Engagement Journey
Initial Presentation
Introduction to GVPL concept and structure
Due Diligence
Comprehensive review of investment framework, portfolio target companies and guarantees
Investment Committee
Formal review and approval process
Terms Negotiation
Development of investment terms and conditions
Final Documentation
Completion of legal documentation and investment agreements
Current Status
The first GVPL investment was completed on 13 December 2024.
Onward investments into portfolio companies are complete and New Model is supporting an initial portfolio of target companies.
With the concept proven, capital deployed and precedents set, New Model is continuing to work with its partners to provide GVPL opportunities to investors.
We have created a tool to help evaluate investors who wish to make an offer of capital to be deployed as a GVPL.
Validated parties can access the GVPL modelling template here using the password provided by New Model.
Access GVPL Modelling Template