Owning the Future: USVC Explained with Ankur Nagpal

This 20-min convo with the General Partner of USVC explains how you can invest in Anthropic, OpenAI, and other private deals.

Until now, it's been extremely difficult to invest in SpaceX if you're not an accredited investor.

USVC is trying to change that.
$500 minimum. No accreditation.

A real fund holding:
- SpaceX (20% via xAI)
- Anthropic
- OpenAI
- Crusoe, Vercel, Sierra, Legora

We unpacked:
- the backlash
- how the fee structure actually works
- why NAV matters (a lot)

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TIMESTAMPS

0:00 Intro
0:47 The Purpose of USVC
3:02 NAV and Pricing
8:20 OpenAI Case Study
10:02 AngelList
12:07 Fee Structure Explained
14:03 Portfolio Overview
17:57 Roadmap

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RESOURCES

Josh: https://x.com/JoshKale

Ejaaz: https://x.com/cryptopunk7213

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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures⁠

Creators and Guests

Host

Ejaaz Ahamadeen

Host

Josh Kale

What is Limitless: An AI Podcast?

Exploring the frontiers of Technology and AI

Josh:
Right now, if you want to invest in the hottest companies in the world,

Josh:
SpaceX, OpenAI, and Anthropic, you really can't.

Josh:
It's normally an activity reserved for the ultra-wealthy who are accredited

Josh:
and involves a lot of jumping through hoops.

Josh:
Well, this week, there's a fund that enables you to invest in all three and more.

Josh:
And it seems like a pretty awesome deal, but the internet has some skeptics

Josh:
and questions about how it works.

Ejaaz:
Well, the good news is we have the GP of the fund here, Ankur Nagpal,

Ejaaz:
on the show to answer all these questions. Ankur, what's up, dude?

Ankur:
What's up? Excited for this. It's been a really, really fun week and yeah,

Ankur:
looking forward to digging in.

Ejaaz:
Okay, so the headline I keep seeing everywhere is with this investment vehicle,

Ejaaz:
now the average show can invest 500 bucks in their favorite company before they go public.

Ejaaz:
So if you have 500 bucks, you can invest in Anthropic and OpenAI.

Ejaaz:
But I want to take a few steps back because I think people are missing the wider

Ejaaz:
story as to why this makes sense now and why you're doing it.

Ejaaz:
So that's my first question.

Ejaaz:
Why does USVC exist at all? And why is now the right time for this?

Ankur:
So if you look at where most of the money is being made in private technology

Ankur:
companies now, Now, it's been happening before these companies go public.

Ankur:
Businesses are taking so long to get out there. And the result of that is the

Ankur:
average person misses out on that wealth creation.

Ankur:
So the goal with USVC is to build a vehicle for people to invest in the future

Ankur:
of American technology.

Ankur:
Now, it's easy to look at, you know, OpenAI, Anthropic, and all of that.

Ankur:
Those are the names we have today.

Ankur:
But a big part of this fund is investing in the companies of the future.

Ankur:
So it's not just late stage private tech of which, you know,

Ankur:
there are other products as well, but it's also backing the smaller companies

Ankur:
starting today that will be relevant three, five, seven years from now.

Ejaaz:
Okay. And how does USVC specifically solve this problem? Can you like walk us

Ejaaz:
through like if I'm someone that's investing 500 bucks today,

Ejaaz:
what is exactly happening with my money?

Ankur:
Yeah. So historically, the way investing in private startups work,

Ankur:
and this is kind of bizarre.

Ankur:
In the U.S., historically, you have to be something called an accredited investor,

Ankur:
which means you need to have a net worth of millions of dollars in order to invest in a startup.

Ankur:
And there's different opinions on why it exists, but it's a bit ridiculous when

Ankur:
you think about, you know, you can invest in any sort of derivative crypto product

Ankur:
without that. I can go gamble.

Ankur:
I can go bet on Polymarket on how long Donald Trump will shake his hand for.

Ankur:
But investing in Enthropic or OpenAI is illegal for the average person.

Ankur:
So the goal with US VC and, you know, we're SEC approved to do this is to offer a registered fund.

Ankur:
Again, you know, people should understand that this is investing in venture capital.

Ankur:
It is still a speculative asset class. We always say with VC,

Ankur:
only invest what you can afford to lose. It is an illiquid investment.

Ankur:
Like, do not think of it comparable to investing in the stock market.

Ankur:
However, if you're someone that otherwise has a balanced portfolio,

Ankur:
it could make sense to allocate, you know, 3%, 5%, 7%, something like that to

Ankur:
this basket of high growth technology companies and effectively own a piece of the future.

Josh:
Awesome. So I'm investing in this. I see a price on the page that says the NAV is $19.95.

Josh:
And I have a little bit of PTSD, right? There was a company that launched,

Josh:
or an ETF that launched a few weeks ago that went up like 10x in one day and

Josh:
then it crashed back down.

Josh:
But I understand that that's because the NAV was actually much lower than the

Josh:
company was trading for.

Josh:
I believe USVC is handling this a bit differently. So when I see the price $19.95

Josh:
on the screen, what is that getting me and how do you handle the pricing?

Josh:
Is it subject to that fluctuation?

Josh:
How would you explain NAV to a person who doesn't really understand?

Ankur:
That's a really good question, because ultimately, US VC is a fundamentally

Ankur:
different product from all the ETFs.

Ankur:
I believe there is, you know, Fundrise has an ETF called, can't remember the

Ankur:
ticker, Robinoot has an ETF as well.

Ankur:
And while these are trying to give the average investor access to private companies,

Ankur:
they're fundamentally different products.

Ankur:
And the reason for that is, their price is sort of divorced from the underlying

Ankur:
value of assets. So even right now, the Fundrise ticker VCX,

Ankur:
for instance, it's trading at roughly four times the price of the underlying companies.

Ankur:
And if you're an early investor, that's great. You're opting the money and it can work really well.

Ankur:
But in down markets, this can also sort of trade not in lockstep with the underlying companies.

Ankur:
So you could, as an example, buy this ETF, the companies could do well,

Ankur:
but you could still lose money because the pricing is sort of divorced from

Ankur:
the underlying value. Now, USVC is a different structure.

Ankur:
It is not an ETF, so it is not easily tradable. However, the price is determined

Ankur:
by the price of the underlying companies.

Ankur:
So the NAV that you see only changes if and when one of the underlying companies

Ankur:
has an updated valuation.

Ankur:
So it's a slower sort of moving NAV.

Ankur:
Now, in turn, you may wonder, okay, this is well and good, but if it's not tradable,

Ankur:
how do I actually get my money out?

Ankur:
And the way this works is quarterly, the goal of this fund, and we caveat it

Ankur:
with like, look, we aim to do this just because according to your perspective, it's not guaranteed.

Ankur:
But if we are to do our job well, we have to meet a quarterly redemption of

Ankur:
up to 5% of the fund at the actual NAV.

Ankur:
Now, that doesn't mean each investor is limited to 5%. it means 5% of the entire

Ankur:
fund will be made available for redemptions every single quarter.

Ankur:
So as an example, if we have 100 million in assets, we'll do 5 million every

Ankur:
quarter that'll be available to investors on a pro rata basis.

Ejaaz:
On the point of redemption, I understand that the shares obviously aren't listed, right?

Ejaaz:
So redemptions are quarterly, like you mentioned, but there's a cap.

Ejaaz:
I think it's like 5% of NAV at the board's discretion.

Ejaaz:
So a two-part question that I have for you is, in a real panic,

Ejaaz:
like what actually happens to someone who wants to get out of this vehicle, right?

Ejaaz:
Has the board already pre-committed to offering the tender every different quarter or can they skip?

Ejaaz:
Like what are people liable for? Who's liable for here?

Ankur:
So ultimately we or the board reserves the right to skip.

Ankur:
However, it is in our best interest. Our interests are aligned.

Ankur:
If we are a fund that is skipping tender offers, it becomes a less attractive

Ankur:
investment product and it ultimately hurts us quite a bit.

Ankur:
However, it's still important to anyone listening. Like, again,

Ankur:
this is venture. It's a different asset class.

Ankur:
Like, think about a venture fund. It is a highly illiquid investment.

Ankur:
This does have tender offers, which is typical, which is better than a venture

Ankur:
fund. In a venture fund, your money is locked up for 10 years.

Ankur:
You have nothing you can do about it.

Ankur:
However, like, you know, we're kind of repeating, this is an illiquid product.

Ankur:
Think about it like, you know, like similar to how you think about a venture fund.

Josh:
So there is a lot more stability than something that we saw with BCX.

Ankur:
Absolutely. Yeah. The upside is, look, like you're actually owning something

Ankur:
close to the underlying asset, which the ETFs, I think, are really fun.

Ankur:
I mean, I, you know, dabble in it myself, but I think of it almost like a speculative

Ankur:
ticker to kind of trade the sentiment on these names more so than anything else.

Josh:
So you mentioned owning the underlying asset. I guess I'm curious,

Josh:
how close are we to that underlying asset?

Josh:
And the question there is, I understand some of these are SPVs.

Josh:
They're not directly on the cap table.

Josh:
SPVs generally come with fees, which has been a big thing that I've seen people

Josh:
on the internet talking about is the fee structure, what you're paying for as

Josh:
a premium in order to access this.

Josh:
Could you speak to the fee structure a little bit here? Yeah, absolutely.

Ankur:
So our strategy is multifold. One of the tenets of our strategy is when it comes

Ankur:
to early stage investing, like pre-seed and seed, it's very hard for us to keep

Ankur:
track of what are the most promising companies.

Ankur:
So there, our goal is to find the most promising GPs that run these specialized

Ankur:
pre-seed and seed funds and be their source of capital.

Ankur:
The benefit of doing this is when they want to write a follow-on check,

Ankur:
like a series A or a series B check, we can be their source of capital. In terms of how we're

Ankur:
This is a very small seed portfolio. We'll hopefully be announcing a lot of new investments soon.

Ankur:
The early investments are largely through a single underlying fund.

Ankur:
However, moving forward, a lot of investments that are planned are direct on the cap table.

Ankur:
And this is important because if it's direct on the cap table,

Ankur:
it means there's no management fee.

Ankur:
But also because this type of registered fund doesn't charge carry,

Ankur:
there's no carry as well, which makes it very, very competitive from a pricing

Ankur:
and fee perspective for any of those direct investments.

Ejaaz:
Wow, that's great if you're getting the direct investment on the table.

Ejaaz:
But just to kind of step back for a second and kind of walk through maybe an

Ejaaz:
example, like I know a lot of the companies that you're investing in right now aren't public.

Ejaaz:
They're meant to, they're very highly valued. They've been valued maximally

Ejaaz:
over the last couple of months, especially in the AI world.

Ejaaz:
If we stepped back, say, a year ago, right, when OpenAI was worth a couple hundred

Ejaaz:
billion dollars or even a hundred billion dollars, let's say this vehicle existed back then.

Ejaaz:
Can you walk us through an example of if I'd invested a thousand dollars in

Ejaaz:
here, how much would I be up right now?

Ejaaz:
How much could I have taken out? Are you able to give us a kind of walkthrough?

Ankur:
Yeah, let me, we can try and work through this live, right?

Ankur:
So again, this fund took us a while to set up and we sort of don't control the

Ankur:
market conditions and they are what they are.

Ankur:
But theoretically, every time there's a markup, what happens is you look at

Ankur:
what that company size is a percentage of NAV and that markup is reflected in NAV.

Ankur:
And so that goes up and you could theoretically start redeeming quarterly based

Ankur:
on that sort of inflated NAV value.

Ankur:
Even now, part of our strategy is we believe there are opportunities to come

Ankur:
in and buy out certain positions at discounts.

Ankur:
These could be secondaries in funds, secondaries in companies.

Ankur:
And the benefit there is as a company raises a new brand of financing,

Ankur:
that's a little, that's a markup to NAV, which theoretically could benefit people.

Ankur:
Working backwards, it's tough to model out exactly what this is because

Ankur:
There's a huge sensitivity on position size and fund size, right?

Ankur:
Because as an example, if we own a SpaceX position that is 20% of our fund,

Ankur:
but then our fund grows, our position effectively gets diluted unless we're

Ankur:
kind of buying more to keep up with it.

Ankur:
And that sort of makes some of this math a little bit more complicated.

Ejaaz:
One thing that kind of stood out to me when I was digging into this and I tweeted

Ejaaz:
about this, you responded to me because you were like, some of these management

Ejaaz:
fee estimations are wrong, is this is happening on AngelList.

Ejaaz:
Now, AngelList is a widely successful platform, but why is it particularly suited

Ejaaz:
for this particular product?

Ankur:
For people who don't know about this, AngelList has been around for 15 years.

Ankur:
They're sort of, you know, at this point, they've had multiple sort of generations

Ankur:
of leaders and employees come. And, you know, it's been around.

Ankur:
It's been a fixture since...

Ankur:
I've now built and sold two companies and they are how I raised money for my

Ankur:
first company over 10 years ago. So they've been around for a very, very long time.

Ankur:
But the benefit of the AngelList platform is they are where the majority of

Ankur:
early stage investing happens.

Ankur:
They are the fund manager of choice for a lot of early stage investors.

Ankur:
They are the SPV tool for most companies.

Ankur:
And as a result, their platform has really good exposure to all of these early

Ankur:
stage assets, which is a very good vantage point for us if we're like,

Ankur:
hey, you know, we want to go acquire a stake in Anthropic.

Ankur:
Let's see, you know, there's a lot of Anthropic investors on AngelList.

Ankur:
We know who to reach out to.

Ankur:
So that makes it a very attractive sort of very logical institution to start a product like this.

Ejaaz:
So when I think about I saw someone explain this on X, there was a lot of activity yesterday.

Ejaaz:
So if you understand, right, the walkthrough, I put in 500 bucks and the way

Ejaaz:
I outlined it in my explanation yesterday over here was there's a 3% management

Ejaaz:
fee in total aggregated, not 1%.

Ejaaz:
It's a double layer vehicle. So you go at USVC at the top, you're paying them

Ejaaz:
a management fee. There's no carry.

Ejaaz:
So there's no necessary incentive for you guys to maybe like work on the or

Ejaaz:
like hold particular positions.

Ejaaz:
But then at the bottom, right, the layers that you guys are investing in where

Ejaaz:
these GPs are actually like putting in chunks on the cap table on L1 SPVs,

Ejaaz:
they then take a 220, right?

Ejaaz:
So in my mind, that made sense as 3%. But you clarified over here,

Ejaaz:
you said our management fee is actually 1% and the total expense ratio right

Ejaaz:
now is 2.5%. I think that's really important and people don't understand that.

Ejaaz:
Can you, would you mind like explaining how exactly you get to that?

Ankur:
Yeah, absolutely. Yeah, that's a, it's a nuance that matters to people closer to this.

Ankur:
What investors care about is their expense ratio but that's different from a

Ankur:
management fee you know the idea because a 2.5% management fee looks like 2.5%

Ankur:
going into our pocket the reality

Ankur:
is the expense ratio which is the net percentage investors are paying

Ankur:
is 2.5% right now.

Ankur:
And the mechanics and the scare to some people is it's really right now 3 point something percent.

Ankur:
We subsidize it out of our pocket to make it 2.5%. Now you may wonder,

Ankur:
why are we doing it? Why is it so high?

Ankur:
The reason is when you start funds like these, they're pretty expensive to start.

Ankur:
So all these funds will have very high expense ratios up front because there's fixed costs, right?

Ankur:
And when you have like 10 or 20 or 30 million in assets, those fixed costs are really high.

Ankur:
However, we think the 2.5% is very competitive because again,

Ankur:
you know, if you compare this to a Vanguard fund, you'll be like,

Ankur:
this is like why 2.5%, that's crazy.

Ankur:
But venture funds typically are 2%. And Drees and some other funds are 2.5%.

Ankur:
However, if you're a venture fund of funds, which we partially are,

Ankur:
those are typically 3% if you include the underlying.

Ankur:
So this 2.5% cap, I think makes us very competitive, especially when you factor

Ankur:
in, we don't charge carry. Now, some of our investments are in funds and they

Ankur:
underlying have their own carry.

Ankur:
However, all the direct investments don't have that and there's no carry on our end.

Ankur:
The combination of that, I think, compared to the world of venture products

Ankur:
makes this very competitive.

Ankur:
And a big part of why even, you know, you're like, okay, why is it even two

Ankur:
and a half is when you try and distribute a fund like this to retail,

Ankur:
there's just operational fees that really add up.

Ankur:
But from a management fee perspective, I mean, you know, we were looking at 1% or 100 bps.

Ankur:
And within that, we're, you know, have to do sales and marketing and a lot of other stuff.

Ankur:
And right now, we're honestly subsidizing most of it.

Josh:
Awesome. Okay, so we understand why this works. The fund structure.

Josh:
Now, let's talk about the portfolio of what you actually get when you invest

Josh:
in this thing. I see XAI on there, Anthropic, OpenAI being three of the larger ones.

Josh:
And particularly when I see the largest holding, I mean, 20 and a quarter percent is XAI.

Josh:
Now, as most people know, XAI has been acquired by SpaceX on February 3rd at

Josh:
one and a quarter trillion dollar valuation.

Josh:
So that position now is functionally pre-IPO SpaceX.

Josh:
Is that kind of how you think about it internally? and are the people investing

Josh:
in that acquisition price or is this a higher markup closer to what it's looking

Josh:
like as it IPOs this year?

Ankur:
Yeah, so I think the most recent mark on this, and I think we've shared this,

Ankur:
was a few weeks ago based on some internal documentation. It's not the IPO price,

Ankur:
right? That's speculative. That hasn't happened. We don't know when that is.

Ankur:
My general caveat with all of this is like, look, some of this may look super

Ankur:
opportunistic. You can get in before certain marks and all of that.

Ankur:
I don't encourage that type of thinking in general. I think you should think

Ankur:
about this as a long-term investment.

Ankur:
Are you long-term bullish on venture as an asset class? If so, great.

Ankur:
I think these positions are great. I obviously like these companies.

Ankur:
However, this is such a small percentage of what we will and plan to do.

Ankur:
And something you'll see soon is we're going to be very public with our investments.

Ankur:
Hopefully as soon as next week, we'll announce newer positions.

Ankur:
And so people can kind of see the portfolio evolve in real time.

Ankur:
But my general guidance is like consider

Ankur:
investing in this if you're generally bullish about the asset class

Ankur:
you want to own a piece of the most important technology companies in

Ankur:
the future you can withstand the

Ankur:
lack of liquidity and the fact that it's a speculative asset class and do it

Ankur:
for that don't do it because you really like the SpaceX position or the Anthropic

Ankur:
position these are great companies we wished we owned more of them but right

Ankur:
now we've added a lot in cash these positions have effectively gotten diluted

Ankur:
and we think the future is not just these companies,

Ankur:
but the companies that everyone will talk about three years from now and five years from now.

Josh:
Awesome, so yeah, notably in the portfolio, 56% of the holdings,

Josh:
if you purchase today, are cash.

Josh:
So you're buying basically this potential upside opportunity for whatever the

Josh:
fund decides to invest in.

Josh:
How do you consider allocating that and what is the velocity people can expect you to deploy that?

Josh:
I found a lot of people were kind of mentioning they don't want to invest in

Josh:
something that's half cash.

Josh:
So what is the plan to deploy that and kind of how quick?

Ankur:
Totally. I mean, our goal is we'd want to ideally hold close to

Ankur:
10 to 20 percent somewhere or maybe even a little bit less in cash and cash

Ankur:
equivalents and again the reason we want to do that is we have to quarterly

Ankur:
tenders right like if all your dollars are invested in venture that's very illiquid

Ankur:
and quarterly tenders become a little bit difficult so

Ankur:
ideally we would like to keep some kind of buffer in either cash or public equivalents

Ankur:
where we can go make our tenders however we intend to be deploying these dollars

Ankur:
quite aggressively and aggressive doesn't mean we're going to index all of late

Ankur:
stage private tech but you know we're going to be backing a lot of early stage fund managers,

Ankur:
a lot of companies directly on the cap table,

Ankur:
buy out some kind of fund positions as well.

Ankur:
There's a lot I can't talk about because these are deals in progress.

Ankur:
But again, we've been very active on the social so far and we will continue

Ankur:
to be when we announce each new position.

Ankur:
And what's cool is for a lot of these companies, they're pretty small.

Ankur:
So they will also announce it to their community and it could be a great way

Ankur:
to activate their community to own a small piece of the business.

Ejaaz:
A very important nuance that you've described several times on the show so far

Ejaaz:
is this isn't trading like a public stock, right? The VCE game,

Ejaaz:
venture game is very, very different.

Ejaaz:
It is more asymmetric. Deals are

Ejaaz:
kind of like aggregated and dealt with within a very few set of actors.

Ejaaz:
And these rounds of valuations can mark up pretty massively.

Ejaaz:
So it takes time and it's a long haul thing.

Ejaaz:
I get that. You mentioned like, it's the long game, right?

Ejaaz:
Three to five years is what you said. In three to five years,

Ejaaz:
or maybe even a decade, what's the best outcome for USVC?

Ankur:
So the best outcome for us is if you look at the data, venture capital as an

Ankur:
asset class has the potential to outperform public markets while also being

Ankur:
somewhat uncorrelated.

Ankur:
So if we can sort of index that, right, like I can't commit to an IRR, I can't commit to that.

Ankur:
But if we can effectively outperform while not being fully correlated,

Ankur:
that's sort of, that's why endowments invest in venture, right?

Ankur:
Like it's two things. It's the alpha and the lack of beta.

Ankur:
And that's sort of the goal here as well.

Josh:
Awesome. Well, thank you. Sadly, we are out of time. I wish we had more time

Josh:
to chat about this, but I very much appreciate you coming on the show to join

Josh:
us to kind of explain the perceptions around it, to give some clarity to this fund.

Josh:
Any final thoughts for anyone on kind of the steps they should take if they're

Josh:
interested in participating or just learning more?

Ankur:
Yeah, look, I mean, usvc.com is our website. At this point, you know, we've been,

Ankur:
the response has been phenomenal and it's honestly blown every expectation so

Ankur:
it's gone from like oh you should invest in usvc to all the reasons people should

Ankur:
you know be careful and think about liquidity and you know what they can afford

Ankur:
to invest and stuff but no check it out at usvc.com and thanks for having me guys

Josh:
Awesome we really appreciate the time thank you so much thanks.