Loyal is a global VC fund that relies on process, not chance, to deliver returns

Strategy

Loyal’s core fund is the Loyal Startup Index Fund. To drive returns, Loyal works to remove bias, evolve the VC model, leverage global networks, and track social and environmental impact.

Entrepreneurs frequently complain that VCs don’t get it. Loyal believes it’s not the people, it’s the process. Demanding snap judgements on hundreds of pitches typically results in superficial, biased thinking.

How does Loyal make smarter decisions? By getting better information. By becoming an insider and watching a company progress. By funding based on what entrepreneurs do, not what they promise. By doing diligence through months of collaboration. And by using a process and rules designed to overcome innate human biases.

How do we know it is working? Today over 30% of Loyal’s companies have a woman CEO, which is ten times the industry average. And Loyal’s founders are similarly racially diverse.

Diversification: It is a statistical fact that proper diversification in seed stage investing is a portfolio of 100-500 startups. So Loyal redesigned the VC process to work at scale, for their core Startup Index Fund, which holds more than 130 companies, and growing.

Process, Not Chance: It is also a statistical fact that VCs are bad at predicting which companies will win. So Loyal allocates only small amounts to start, and optimizes follow-on investing, using a multi-stage Darwinian process where winners continually emerge over time.

Trade In or Out: Fund structure is also re-examined. LPs want to be able to access their money; entrepreneurs want long term capital. So Loyal’s core Startup Index Fund has no end date, yet also prices and transacts quarterly. In effect the fund acts as its own secondary market, so investors have better liquidity.

Aligned Incentives: Loyal’s founding partners don’t like the concept of annual management fees as the main compensation mechanism. So the Startup Index Fund fees are tied to investors receiving real gains and liquidity.

Loyal minimizes negative selection bias, and reduces bad actor risk, by sourcing deals through two global networks where they have multiple deep relationships, and can act as insiders.

One is the Founder Institute, accessible to aspiring entrepreneurs around the world. Active in over 100 cities, the Founder Institute is the largest global pre-seed accelerator. The second deal source is alumni of the INSEAD business school, rated by Pitchbook as the #1 non-US school for unicorn founders.

Loyal’s third global network is their own, of >300 advisors.

Loyal impacts their portfolio companies, most powerfully reflected in the 100% acceptance of Loyal’s follow-on offers to date.

In funding diverse entrepreneurs, Loyal gains financial returns and has social impact. Overall, Loyal has 33% women CEOs, and 29% emerging market and non-wealthy founder investments.

The entrepreneurs have even more impact, with 80% addressing one or more of the UN SDGs. This helps with returns: entrepreneurs who are motivated by more than just money have more resilience in tough times, can better recruit and keep a team, and attract the best partners and funders.

Loyal believes in quantifying real net environmental and social impact, rather than checking boxes. Quantification is necessary so Loyal can deploy money for the biggest returns, be they financial, environmental, social, or a blend.

Portfolio

Loyal has a core portfolio of over 130 investments in more than 35 countries. The fund is intentionally broadly diversified across industry sectors. Selected portfolio companies are listed below.

Advisors

To support a global portfolio, you need a global network of advisors. Loyal has over 300 advisors, from prominent opinion leaders to unsung functional experts, to give the right help on every issue.

“Every single advisor I’ve reached out to in the Loyal network has agreed to a meeting and promptly opened their calendars to me. I’ve truly been more than impressed with their willingness to help despite being so busy themselves. You’ve built an incredible network of advisors! Thank you!”
Liza Rodewald, CEO

Investment Team

Experienced entrepreneurs, accelerator leaders, advisors, angels and venture investors. Click a photo to see each person's LinkedIn.

Contact
You can reach Loyal by emailing info@loyal.vc, or for more specifics select the section to the right.
Loyal currently only sources within three trusted networks, as outlined here:
– Founder Institute companies, referred by their local director
– companies led by an INSEAD grad, working full-time
– companies chosen as ‘their investment’ by a Loyal VC investor
 
Loyal recommends that any companies that do not qualify consider signing up for the Founder Institute program, which is open to entrepreneurs worldwide.

Here is an outline of how Loyal works with advisors. All interactions are double opt-in, and Loyal shares compensation obtained from successful company exits. To proceed, or find out more, please sign up here to meet us at one of our weekly advisor ‘ask us anything’ sessions.

Because of the structure – an evergreen fund that reprices and trades quarterly – Loyal’s Startup Index fund can only be offered to ‘accredited’ or ‘sophisticated’ investors. We regret that it is not available to the public, hence we are unable to share financial return information on our website.

Please email press@loyal.vc, should you wish our support or introduction to sources in our network. Topics Loyal can support you with include:
– Loyal’s innovative investing approach
– thought leadership on reducing riskgender bias and accessibility in VC
– introductions to one of over 500 entrepreneurs and advisors, across industries, in 40+ countries, to provide expert commentary