An accredited investor is a person the Securities and Exchange Commission (SEC) has determined has the knowledge and financial capacity to make investments not registered with the SEC. In order to qualify as an accredited investor, you must have a net worth of over $1,000,000 excluding the value of your primary residence or have an income of $200,000 if you are single or $300,000 if you are married. No government body certifies you as an accredited investor, rather, High Circle will verify your status before issuing an investment.
Most of our offerings are not registered with the SEC, so you must be an accredited investor in order to invest with High Circle.
This varies based on each fund, contact us to get more details about specific emperics about our opportunities.
We charge a carry fee for each investment. Whenever you liquidate your investment, we take a percentage of the profits you make (difference between the initial investment and liquidation value). If the investment loses money, we do not charge a carry fee.
You do not directly own shares in the company, rather you own tokens that represent shares in an LLC that owns shares in the company that you invest in.
The investment is structured as an LLC, with High Circle as the manager. Each investor gets ownership of the LLC in the form of tokens, relative to how much they contributed, and then the total funds from the LLC will be used to buy the specified investment (Pre-IPO shares of a company, shares in a Hedge Fund, or real estate projects etc.). Once tokens are distributed, High Circle will act as the custodian, with ownership in the LLC determined by ownership of the tokens.
There is a private market for shares in private companies, based on metrics like the last round of financing, investor demand, other secondary transactions that have occurred publicly, and other public information. We determine our prices based on the private market for these shares.
The paperwork for the fund is similar to that of any other form of fund investment. An investor will receive a subscription agreement that signals that they would purchase a share in the fund (the LLC). Investors would also need to complete a W-9 or a W-8 BEN for foreign investors and the Suitability form. Annually, investors will receive a Schedule K-1 that updates them on the status of their investment. All legal and financial documents and compliance are prepared by external counsel and accountants.
The investment is treated like any other fund investment. Our investments are taxed like a partnership, so the gains and losses would pass through to the investors. If it is held for more than one year before its disposition, the resulting income is taxed as long-term capital gains, at the applicable tax rate. Note: We are not tax experts, and the aforementioned information serves for informational purposes only and not as personal tax advice. It is advised that you consult your tax advisors for information regarding your specific circumstances.
We will communicate with you consistently on any public news that has to do with your investments (funding information, news about secondary transactions, company news, market news, etc. ). The fund manager will also issue a Schedule K-1 on the status of your investment annually.
Your ownership is transferable by trading tokens on the HCX platform. If you are able to find a buyer for your shares in the LLC, it is possible for you to sell your shares and cash out by transferring the tokens into their account. While we cannot guarantee that we’ll be able to help you find a buyer for the price you are looking for, our platform will facilitate the transaction.
Yes, some funds can utilize capital from IRAs. In fact our partner Alto, actually specializes in alternative investments with IRAs.
Pre-Initial Public Offerings (Pre-IPOs) allow private companies to raise money by selling shares. Since these shares are being sold before the actual IPO, investors can receive shares at a discounted price. The potential upside is incredible in such investments. However, such investments traditionally required significant initial investments, preventing retail investors from investing. Here at High Circle we're breaking down such barriers by offering Pre-IPOs at significantly reduced minimums.
At High Circle, we leverage deep relationships with some of the most promising late-stage companies and venture capital firms to get access to Pre-IPO rounds . We then purchase a large ‘block’ of a company's capitalization under an LLC, which our clients can buy shares of through tokens. This allows us to put forward the large initial investment needed for Pre-IPO investments, while letting individuals join with lower minimums. Once a company goes public or is acquired , we liquidate/distribute the shares to our members. We also charge a carry fee, a percentage of the amount the investment has grown from the initial investment till liquidation.
When you invest in a Pre-IPO, it could mean making your capital illiquid for an uncertain period of time, only being able to liquidate your share once a company goes public. The same risks and uncertainty that apply to traditional forms of investing also apply to Pre-IPO investments. While at High Circle, we do our best to mitigate the risk and provide the best opportunities for our clients, nothing can be guaranteed.
If a firm's shares are sold to another or if the firm is liquidated, you can no longer hold the shares. If the company has an IPO, then after the IPO lockup period, the shares will be transferred to your brokerage account, and you can do with them what you wish.
We cannot guarantee a specific exit, or a timeline for an exit for any of your holdings. However, historically, the companies that we invest in that have received institutional financing exit in around 2-5 years. You can, however, sell your ownership anytime before the IPO through the HCX platform thanks to tokenization.
The shares of the company will be transferred to your brokerage 6 months after the company goes public, and they are yours to do with as you wish. If the price on the day the shares are handed over is higher than the price you bought the shares for, the carry fee will have to be paid to us on the difference.
We cannot legally disclose private financial and ancillary data about companies, however, we do keep our investors up to date with the most recent public data about companies you invest in. We also leverage our extensive network to keep investors informed about the most recent private market share prices and movements in the companies they hold.
A token is a digital representation of an asset. It derives its value by being linked to an underlying asset that has value. Tokens come in many forms, such as NFTs that represent digital art, to our tech which represents private assets. Tokenization enables frictionless trading of assets like real estate and pre-ipo shares that are otherwise difficult to exchange. At HCX, each token is tied to ownership of an LLC that owns the underlying asset.
The tokens are stored in a custodial vault through our custodian, Coinbase which is one of the largest digital currency exchanges in the and who is overseen under strict New York State banking laws with the same requirements as traditional financial firms.
Through our portal, we have secure methods to verify your identity and reset your password.
Revenue from tokens is distributed just like how revenue from shares would be distributed. Based on the percent of the total tokens that you own, you receive a corresponding percent of the revenue. The distribution of proceeds will be managed from our portal.
We are currently working on developing our exchange platform that will enable clients to easily trade their tokens. While right now it is not possible to trade tokens, it's coming soon!
You can see and manage all of your tokens through the dashboard on our website.
Real Estate Investing.
The projects are managed by the proprietors of the project which can be High Circle or others who have partnered with us. More information on who manages each individual asset can be found on each assets page.
This is the projected length of a project, before an exit. Keep in mind that this is just a projection and the actual project outcomes can change based on market conditions.
The IRR is the internal rate of return which represents the annual rate of return of an investment. It is calculated as the discount rate that would make the cash flow projections over the targeted investment period that is equal to the initial investment made.
This is the annual income that equity holders are projected to receive from an investment. A yield of 10% would mean that for every dollar invested, the investment is targeting a payout of 10 cents every year. This calculation doesn't include the final payment that occurs once the property is sold at the end of the period.
The proceeds from the liquidation will be transferred to your account based on what percentage of the project you own at the time of liquidation.
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