I’m all for democratizing private markets. Retail investors have been locked out of venture for too long, and more access is generally a good thing.
But I won’t be touching USVC.
At first glance it doesn't seem that bad: 1% management fee, no carry, $500 minimum, and access to private companies.
The problem is the structure.
USVC’s net expense ratio is listed at 2.5% per year, and the fund mostly gets exposure through other venture funds, SPVs, growth rounds, and secondaries. Those underlying vehicles charge their own fees and carry.
So this is not really “1% and no carry vs. 2 and 20.”
It is often venture exposure through multiple layers before your dollar reaches the actual company.
This is crucial because venture returns are driven by a few winners. If the winner has to pass through an underlying SPV/fund first, then through USVC’s expenses on top, your upside gets diluted.
Stage matters too.
USVC’s largest disclosed holdings appear to be late-stage private companies already valued in the tens of billions. These may be great companies, but the 10x math is much harder once a company is already that large. I fear retail investors will be used as exit liquidity here.
You get recognizable names, but a lot of the asymmetry may already be gone.
That's my issue with it. Private market access should mean more than giving retail investors a small, fee-layered slice of crowded late-stage companies.
At Dhow, we’re taking the opposite approach.
For $500, USVC may be a reasonable option because there aren't many alternatives.
For $10K and up, I'd rather own a direct position in an early-stage portfolio than a diluted slice of names everyone already knows.
That's why I won’t be touching USVC.
And that is why we’re building Dhow.
Not investment advice. Private market investing is risky, illiquid, and not suitable for everyone.
