New DW Venture Debentures™ product to accelerate growth

July 12, 2020

To further enhance its very disruptive digital VC model Dynasty Wealth has created a new investment manage product, DW Venture Debentures and the new venture debentures investment management products category.  The new product will accelerate revenue growth and also the valuation for the partnership.  See also “Dynasty Wealth Shares Readying for Takeoff”, July 8, 2020.    

The biggest obstacle for Dynasty Wealth (DW) to perfect its highly disruptive digital VC model will be to build and maintain an inventory of a minimum of 10 investable startups by Q4 of 2020 and 20 by Q2 of 2021.  To be classified as showcase, a startup must have a highly scalable business model or technology.  Dynasty Wealth’s Jinglz which was recently awarded a patent in which Facebook is infringing is a great example.     

Building the assembly line to produce startups investing opportunities is now a top priority.  Dynasty Wealth’s asset management subsidiary Alpha Edge Partners (AEP) is projected to have from $10 million to $100 million to invest in startups by as early as Q4 of 2020.

When DW entered the asset management industry through AEP its startups’ business became highly scalable.  Its because AEP’s clients and prospects are not individual investors.  They are the 4,500 investment management firms (also known as RIAs) which have an average of $17 million of assets under management (AUM). 

AEP’s strategic investment management partner Lions Gate Advisors (LGA) is a good example.  LGA is now in the process of moving the $25 million that they manage for their individual investor clients into six of AEP’s asset management products that are now listed on their website.  Three of the AEP products have mandates for a portion of the client’s assets to be allocated into a diversified startups portfolio.  LGA is AEP’s strategic partner since LGA will commence to market AEP and its six products to 195 investment management firms that they are affiliated with by end of third quarter of 2020.  

To facilitate the growth DW developed the DW Venture Debentures™ asset management product.   The DW Venture Debenture (DWVD) operates similarly to a bridge loan.  The investor(s) makes a direct loan of a maximum of $250,000 to a startup which DW will most likely have a stake or will have a stake.  The purchaser of the Venture Debenture:

  • is automatically repaid from the cash that DW’s Alpha Edge Partners (AEP) directs from the investment management accounts into the startup(s).  Note.  Alpha Edge has the discretion to invest in any startup they choose and the amount will be a multiple of the $250,000 provided by the purchasers of the DWVDs.   Also, the projected timetable for the DWVD’s to be repaid will range from one month to six months. 
  • receives (or purchases for a nominal amount to establish a cost basis to insure a long-term capital gain) an equity stake in the startup instead of an interest payment.  Note.  The equity stake has the potential to be extremely valuable.  DW will negotiate for the DWVD purchasers in aggregate to own between 1% and 2% of the startup.  Should the startup go to a valuation of $100 million and even assuming a 50% dilution the stake would be valued from $500,000 to $1,000,000.   

The DWVD has a lot of sex appeal.  It enables an investor to in effect provide a credit line which will produce equity stakes in scalable startups at a zero or nominal cost basis.  The DWVD adds significant value to the Dynasty Wealth partnership.   It’s the magnet for: 

  • AEP to grow its assets under management.   DWVD will be incorporated into a new AEP wealth management product which will require the asset management account to have a minimum of $1,000,000 of assets.  
  • AEP’s to grow RIA base.  AEP’s RIAs will be able to utilize the new product as a prospecting tool to add their investor client bases. 
  • DW to build its startups inventory.  DW having up to $250,000 readily available from DWVD purchasers will enable it to become a first stop destination for all startups who are seeking capital.   

The most significant value added by the DWVD is that the product increases DW’s negotiating leverage.  The Dynasty Wealth partnership will be able to receive higher equity stakes and cash fees from each and every startup that becomes a client company of DW.