A 2021 Year-End Report Card

With a well-distributed national presence, VCapital’s number of investors has increased 78% in the last three years. This enables us to raise funds faster when needed to capture a share of the best deals available. 

It has been six years since VCapital’s first investment in Intensity Therapeutics and almost two years since the COVID pandemic emerged. It is time to take critical stock of where we are. While risks and uncertainties, by definition, remain until exits are final, the VCapital management team feels positive about where we are, and we hope that you do too.

The venture capital market: more competitive, speed is critical 

Increased recognition that venture capital-backed innovation is THE path to the most significant returns results in more investors moving more quickly to snare the best deals. 

VCapital is positioned to compete for those best deals 

Current market dynamics demand us to be prepared to raise funds faster than before. Our veteran team has the experience to evaluate opportunities both rigorously and swiftly, to ensure outstanding investment quality along with faster decision making. 

With a well-distributed national presence, VCapital’s number of investors has increased 78% in the last three years. This enables us to raise funds faster when needed to capture a share of the best deals available. 

The pandemic 

Remember those investor fears in early 2020? Progress for some of our portfolio companies was slowed briefly by the pandemic due to government-mandated lockdowns and supply chain constraints. In reality, however, the pandemic has helped, not hurt, the venture capital investment market and VCapital’s prospects. 

Entrepreneurs and the investing public recognize the inevitability of change and the importance of anticipating and addressing changing needs and opportunities. As a result, the flow of venture capital funding has accelerated, along with successful exits and record-breaking IPOs. 

VCapital portfolio’s excellent prospects 

Portfolio concentration in sectors with enormous growth potential has been made even more significant by 

• pandemic-driven demand for increased healthcare efficiency 
• expanded internet utilization to handle remote work 
• increased digitization everywhere 

The VCapital portfolio includes investments in 

1. Healthcare targeted at more effective cancer treatment, medical device advances that have demonstrated ability to improve healthcare effectiveness and efficiency, and cutting edge developments in gene therapy 
2. Satellite communications, increasingly essential for government defense and security purposes and poised to capitalize on recent highly publicized advances in rocketry 
3. Big Data storage and analytics as the world creates and seeks to analyze ever-increasing amounts of data 
4. Edge computing, the next generation in digitization, to enable the full potential of the Internet of Things 

Two most active of our portfolio companies 

Results of Intensity Therapeutics’ Phase 2 clinical trials continue to look positive. Planning is underway for Phase 3 trials for FDA marketing approval of Intensity’s core INT 230-6 product. Big Pharma is following Intensity’s progress closely.

Atlas Space Operations’ growing sales inroads with the US Department of Defense, NASA, and other agencies point to substantial potential government contracts. Progress of Atlas’ government business development is essential for its commercial business development as well since the government is often the biggest customer of Atlas’ commercial prospects. Notably, Jeff Bezos’ Blue Origin selected Atlas as the satellite communications provider for its geostationary and lower orbit satellites. 

Other encouraging progress 

While their breakthroughs are more narrowly targeted, there is excellent progress and potential for both Raydiant Oximetry and SentiAR. 

Recent investments with broad market relevance 

Ocient’s breakthrough data storage and analytic capabilities target the world’s largest data generators, believed to represent a $100B+ market opportunity. EDJX’s pioneering edge computing technology promises to bring computing capacity to “the edge” (within 1,000 feet of all those sensor-driven devices) to enable the Internet of Things. Rejuvenate Bio addresses the primary cause of aging and age-related diseases through gene therapy, targeting specific, chronic conditions. 

Non-winning investments have not been total losses 

Roughly 80-85% of industry-wide startups typically fail to deliver a positive return, with most suffering total losses. Our portfolio companies hurt most by the pandemic still have been helped by skilled CEOs finding suitors for their capabilities. Synap investors are still getting back 82 cents on every dollar invested. simMachines investors now own shares in InRule, whose broadly positioned decision automation capabilities are generating encouraging valuation gains. 

VCapital is not resting on its laurels 

We remain on the vigilant hunt for great startups to invest in on attractive terms on your behalf. 

We look forward to hearing from you with feedback, questions, or interest at any time. 

Sincerely, 

The VCapital Team