On Market Conditions
Some comments on the current environment and the opportunity it is creating for Odin
Hi folks, Patrick Ryan here from Odin. We are building a better way to invest together, starting with the tools to let anyone run an angel syndicate or VC fund.
Founders - you can also raise money from your network using Odin. More here.
The next couple of years are an enormous opportunity in startups.
For founders, building a real company (rather than a hype machine) is, at last, back in fashion. For investors, shares in great companies are going to be available at much better entry prices.
Interestingly, whilst the venture capital market is slowing down, business at Odin is accelerating
VC’s are sitting on their hands and waiting to see how the next few quarters plays out. It appears that angels and family offices are picking up the slack.
Odin is benefitting from this trend.
Our rate of investment has increased dramatically quarter over quarter, and shows little sign of abating. We are forecasting 1,600 individual investments this quarter - the same amount we did in the previous two quarters combined.
We launched 59 deals in November, vs. an average of 25 per month in the 3 months preceding. The trend for December also looks strong.
What’s next?
We aren’t resting on our laurels.
We have plans for 2023 with the potential to fundamentally change the venture capital industry forever. We are moving beyond SPV administration - our first product - and into exciting new territory.
If you’re interested in working with us, drop me an email.
R.e. Assure
In the world of SPV and fund admin, the recent collapse of U.S. provider Assure has made waves.
Going by Assure’s own numbers, almost $9.2B in assets under management, from some 50,000 investors, is affected. Fund managers and angel syndicates working with Assure now have to migrate to a new platform at significant cost and during a stressful time of year.
This is going to be a painful, manual process. We understand that Assure have reached an agreement with another US provider, Allocations, to handle the transfer.
I understand people might have questions about Odin’s business, and I want to put your minds at rest.
We have had a clear contingency plan from day 1
We have a contingency plan in place in the unlikely event of insolvency, which means our customers would never be affected in a similar manner to Assure. We also keep a pool of capital aside for unforeseen issues.
We are careful about the way we operate, and ensure that what we do is compliant and in the interests of our customers. That is also why, for example, we decided to get FCA regulated for deal arranging early on in our journey.We are a lean, product-focused technology company.
We have 9 full-time employees, including the founders.
6 of these people are technical (write code) and work in, or closely with, the product team. This is key. It allows us to automate complex processes, and means we take a product-first mindset to everything we do.
Let me give you a little example:
On Odin you can create a carry side letter and custom deal fees for an individual investor in seconds. You click a button and the platform generates a unique investment agreement that you can send to that investor.
We know of other platforms in Europe performing this process manually and charging up to $1.5k for the service!
From what we can tell, Assure operated with a lot of manual processes.
They started life as a back office accounting & admin firm for private transactions, and got into the world of SPV’s in a big way when AngelList asked for their help.
If you are charging a single fixed fee for deals, you simply cannot have significant portion of your processes being handled by humans. You need to build software that automates this stuff.
Automation is probably the thing we obsess about most at Odin.We are capital efficient and close to profitability
One of the reasons we focus on UK bare trust structures for our vehicles is that they require low ongoing admin and are high gross margin.
This means we can offer a great product to investors at low cost, and remain in the black.
It is also why we have zero interest in taking over the administration of Assure’s vehicles - it would not be a smart business decision.
We are, in fact, already close to cash flow positive, and in a strong cash position. The same cannot be said for most startups who launched their first product a little over a year ago.
You're out in front building and doing deals.
You need a partner in your corner who is here to stay.
We've got your backs - and we are excited to continue creating a company you love.
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Risk Warning
Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Odin is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Odin once you are registered as sufficiently sophisticated. This content is for informational purposes only and should not be considered investment advice.
Join Odin Limited is an appointed representative of Aldgate Advisors Limited, which is authorised and regulated by the Financial Conduct Authority (No. 763187).