The BlackRock Innovation & Growth Trust (NYSE: BIGZ) is a venture capital fund wrapped in a CEF structure providing investors with exposure to pre-IPO investments not typically available to retail investors. It also yields an attractive current yield of 12.3% financed by return of capital.

During bull stock markets, pre-IPO venture capital investments can add significant returns to a portfolio, as start-up companies may seek exits through sales to other companies or IPOs on public markets. Unfortunately, the IPO market is currently in a deep freeze, and big tech companies are more concerned with cutting costs than acquiring startups. I would stay away from the BIGZ fund until the market environment improves and exits become viable again.

Fund Facts

The BlackRock Innovation & Growth Trust is a closed-end fund (“CEF”) that invests primarily in small and mid-cap companies that the investment manager deems “innovative”.

The fund has over $2 billion in assets and trades at a steep 21% discount to net asset value (Figure 1).

Strategy

The investment objective of the BIGZ fund is to provide total return through a combination of income, current gains and long-term capital appreciation. To achieve its investment objective, the fund will invest primarily in companies which have introduced or are seeking to introduce a new product or service which may change their respective market. The fund also writes call options on investment holdings to generate current income.

Portfolio holdings

As the fund aims to invest in innovative companies, its portfolio holdings resemble those of a “technology” or “growth” fund, with large allocations to software (27.0%), biotechnology (11 .4%), consumer services (11.2%), and semiconductors (9.9%).

Another characteristic of the BIGZ fund is its significant weight in private investments. The fund aims to invest up to 25% of its assets in private placements. At the end of the second quarter of 2022, the fund’s allocation to private companies was 27.4%, as the value of public investments fell. In total, the fund has invested $858 million in 29 private companies as of June 30, 2022 (Figure 3).

Return

The BIGZ fund was only launched in March 2021, so it has a limited operating history. However, in the short period of the fund’s existence, it has lost approximately half of its value (based on net asset value, the fund has lost 49.5% since inception), most of the losses producing since the beginning of 2022 (Figure 4).

Distribution and yield

One of the main attractions of the BIGZ fund is its high distribution yield. However, the $12 million distribution figure of $1.05/share is misleading, as the monthly distribution was reduced from $0.10 to $0.07 in June 2022 (Figure 5). At the current distribution rate of $0.07/month, the fund is earning 12.3% on market price and 9.6% on net asset value.

The distribution of BIGZ is financed by a return of capital (“ROC”) (Figure 6).

Costs

The BIGZ fund charges a management fee of 1.25% and has a gross expense rate of 1.29%.

Private investments are high risk and high return

As I’ve written before, pre-IPO private investments can offer phenomenal returns. For example, Sequoia Capital turned a $60 million investment in messaging app WhatsApp into $3 billion when WhatsApp was sold to Facebook in 2014. However, venture capital investment also comes with risks, because venture capital returns follow the Pareto principle, where 80% of returns come from 20% of investments. Often a venture capital fund will lose money on most of its investments, but 1 or 2 home runs will “carry the fund”, and more. Unfortunately, it is impossible to know in advance which investment will win and which will lose.

One of the main disadvantages of venture capital investing is the unpredictable nature of cash flows and why it is not available in a mutual fund/ETF environment. Since most of these investments are in early-stage, high-growth companies, the investments typically do not pay dividends and rarely generate profits. Instead, venture capital funds rely on “exits”, either a sale of the investment to a bigger company like WhatsApp/Facebook, or a public listing (via IPO or SPAC) of the company. investment, to generate cash flow and returns for investors. The timing of exits is unpredictable and usually requires a “bull market” environment. Investors in venture capital funds must exercise extremely high patience and tolerance for long periods of little or no cash.

BIGZ is a venture capital fund in disguise

What’s interesting about a fund like BIGZ is its attempt to wrap an illiquid venture capital fund in a perpetual closed-end fund structure. The CEF structure means investors in BIGZ cannot redeem their units like in a mutual fund. When investors want their capital back, they sell shares of the fund to someone else, and the capital stays in the fund; there is no forced liquidation of the funds’ investments.

The worst that can happen to a CEF is that it trades at a significant discount to the fund’s net asset value because there is no “demand” for the fund’s shares. Currently, the BIGZ fund is trading at a steep 21% discount to NAV (Figure 7).

The steep discount could also be a sign that investors in the funds do not trust the mark-to-market valuation of the funds’ private investments. For example, in the BIGZ fund, according to the latest semi-annual report as of June 30, 2022, the private investment portfolio was marked at 75% of the initial investment (Figure 8).

However, we know from peer tracking of public “innovation” funds like the ARK Innovation ETF (ARKK), that 2022 has been a disastrous year, with ARKK returning -60.1% since the start of the year as of September 30, 2022 (Figure 9).

It is highly unlikely that BIGZ, with a 25% weighting in private investments which should make it more risky, could outperform the ARKK ETF by almost 20% with a return of -41.9% YTD as of September 30, 2022. Therefore, skeptical investors punished the BIGZ fund by reducing its market price by 59.0% YTD (similar to ARKK’s YTD performance).

Conclusion

In conclusion, The BlackRock Innovation and Growth Trust is a disguised venture capital fund offering investors exposure to venture capital investments not generally available to retail investors. It also offers an attractive current yield of 12.3% financed by return of capital.

During bullish stock markets, venture capital investments can add significant returns to a portfolio, as start-up companies may seek exits through sales to other companies or IPOs in public markets. Unfortunately, the IPO market is currently paralyzed and big tech companies are more concerned with cutting costs than acquiring startups. I would stay away from the BIGZ fund until the market environment improves.

STOCKHOLM, September 22, 2022 /PRNewswire/ — Hexagon AB, a global leader in digital reality solutions combining sensors, software and autonomous technologies, today announced the creation of a new venture arm of R-evolution, the subsidiary of investment in sustainable innovation and green technologies at Hexagon.

Today’s climate emergencies require urgent investments in innovative initiatives that save the planet. It is up to all industries to deal decisively with the crisis while supporting economic growth and green tech startups are a critical part of the solution. The R-ventures program aims to help the ecosystem of green technology startups accelerate their next breakthroughs through seed funding or in-kind technology from Hexagon’s portfolio.

Material Mapper, a Norway-based company, marked the program’s inaugural investment, targeting the transition to a circular economy in the buildings sector. Material Mapper focuses on digitizing construction sites for reusable materials – ultimately connecting decommissioning projects with new construction to increase the reuse of building materials.

While R-evolution’s search for promising investment opportunities is closely aligned with its focus areas – renewable energy and storage, green hydrogen, carbon capture, plastic waste management, desalination, plant-based food, ecological monitoring, sustainable agriculture and circular economy transitions – the Society welcomes all entrepreneurs with disruptive innovations to demonstrate their positive impact on the planet and their potential for rapid growth for consideration.

“Hexagon envisions 2050 as ‘the year too late.’ hexagon. Ola Rollen. “In just over a year, R-evolution has proven that it is possible to have a positive impact on the environment while generating profitable business growth. It now calls on entrepreneurs to tackle climate emergencies together Direct investments in start-ups target its ability to drive rapid change profitably while giving back to the planet.”

Monetary investment considerations for R-ventures or in-kind technology require green tech startups to be in the pre-IPO funding stage, with an identified product and initial customer base. Start-up investments typically vary between 50k at €500,000. Additionally, R-evolution invites partners, private investors, accelerators, governments and universities to increase the visibility and reach of startups. For more information, visit r-evolution.com/r-ventures.

For more information, please contact:
Maria Luthström, Head of Sustainability and Investor Relations, Hexagon AB, +46 8 601 26 27, [email protected]
Christine ChristensenMarketing Director, Hexagon AB, +1 404 554 0972, [email protected]
Erik JosefssonCEO R-evolution, Hexagon AB, +46 70 857 64 70, [email protected]

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/hexagon/r/hexagon-sr-evolution-launches-venture-capital-arm-to-boost-green-tech-startups,c3634557

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SOURCE Hexagon

Other investors in this company are ANDRES Construction, GS Futures, Progreso X and SABANCI Building Materials Group.

“As pioneers in the transformation of the construction industry, we are pleased to be part of this investment vehicle to seek innovative solutions that help drive productivity, sustainability and urbanization,” said Gonzalo Galindo, Head of CEMEX Ventures. “The collaboration and synergy between the partners involved will help to further accelerate our efforts.

Zacua Ventures will seek synergies between the innovation priorities of all its partners. Thanks to these investments, Zacua will gain financial independence while benefiting from the experience of its partners. As the construction industry transforms, Zacua Ventures will be a strategic ally in researching and understanding new technologies.

The Zacua Ventures team offers in-depth knowledge of the industry and the startup ecosystem. It is led by experts who have been investing in building technology for a decade. Zacua Ventures has offices in San Francisco, Madrid and Singapore.

Read the article online at: https://www.worldcement.com/the-americas/09082022/cemex-invests-in-global-venture-fund-oriented-to-sustainable-construction/

Taking on debt is highly typical, but your alternatives depend on your company. Its age, position, performance, market potential, team, etc. To customize your financing search and strategy. Let’s go through some distinct possibilities and how to do a financing search.

Myths about small business loans

Before diving into the best solutions for new and existing companies, let’s clear up some common financing fallacies. Don’t give up now. It’s better to deal with reality than myths.

Venture finance is becoming more popular.

Venture capital funding is scarce. I’ll explain why just a few high-growth firms with powerful management teams are venture prospects. Many people call outside investors or angel investors venture capital.

Bank loans are the most common way to support a startup.

Banks do not fund new businesses. Banking regulations prohibit banks from investing depositor funds in new enterprises. We’ll get to that in a minute, but most bank loans need financial backing.

Plans entice investors

Business plans do not automatically entice investors to back your venture.

They are investing in your company, not simply a strategy. You need a team and movement toward concept validation or, better yet, traction (paying customers). So you’ll need to work hard to get investors.

Nobody invests in concepts. Rarely do investors know an entrepreneur well enough to support them early. In that situation, they’re backing the person, not the strategy.

Preparing your company for finance

Let’s start with some realism. Like many other aspects of business, company finance is very individualized. The reality varies according to on development stage, resources, and other things.

Are you a new or existing business?

The prognosis for financing is very individualized.

For example, many established firms have access to traditional bank business financing that startups do not. Also, high-tech, high-growth startups may get investment capital that slower-growing established enterprises cannot.

Revise your company strategy.

Not that you shouldn’t have one. Should.

Your business plan explains how much money you need, where it will go, and how long it will take to recoup it.

Before they go to due diligence, investors will want to see a business plan, including a summary and a pitch. And even before that, in the early phases, they’ll need you to have a personal business strategy.

A business plan is usually required when applying for a loan. A business plan is also necessary to qualify for an SBA loan (SBA).

Everyone you meet will expect you to have a business strategy. They may not start by asking to see your system, but don’t be caught without one when they do.

How to get company capital?

The search for funds must be tailored to the firm’s requirements. Where and how you seek money depends on your business and the money you need. Determining the right kind of financing for your business may be difficult.

This post will examine six distinct investing and loan choices. This should help you decide which financing choices are best for your company and which to explore initially.

1. Venture Capital

Venture capital is often misunderstood. Many startups worry about venture capital firms not investing in new or riskier projects.

People call venture capitalists sharks or sheep because they all seek the same deals.

No. Investing in other people’s money is what venture capitalists do. Professionally, they must minimize danger. They should not assume more risk than is required to meet their funding sources’ risk/reward ratios.

Who should pitch to VCs?

Only exceptional new enterprises should consider venture capital as a source of finance. They can’t afford to invest in startups unless they have a unique product, market, and management mix.

Venture capitalists hunt for companies that potentially double in value in a few years. Their strategy is to win large enough to compensate for the losers.

They usually target newer items and markets that might expect rapid revenue growth. A successful startup management team is preferred.

If you’re a prospective venture capitalist, you already know this. Your management staff has been there. You may persuade yourself and a room full of intelligent people that your firm can tenfold in 3 years.

If you have to inquire, your new firm is probably not a venture capital candidate. People in emerging sectors, such as multimedia communications, biotechnology, and high-tech goods, are familiar with venture capital.

2. Angel funding

Angel financing is significantly more widespread than venture money, and it is generally accessible to entrepreneurs far sooner.

While angel investment is similar to (and sometimes mistaken with) venture capital, fundamental differences exist. First, angel investors are self-funded organizations or people. Second, angel investors often invest in early-stage firms, while venture capital typically invests in organizations with a few years of experience.

Businesses that get venture financing often do so after receiving angel funding first. Angel investors, like VCs, often target high-growth enterprises in their early phases. Not for supporting steady, low-growth firms.

The 2012 JOBS Act also relaxed several regulations and permitted what we now term crowdfunding. Traditionally, accredited investors were defined as those who met specific financial criteria. Crowdfunding is the word for non-wealthy individuals investing in companies.

Starting-ups and even small enterprises may attract a broader group of investors under specific circumstances. Many of the details are still hazy, so consult an attorney first.

Finding angel investors

The second issue is where to discover the angels who could invest in your company. Some government institutions, business development centers, and incubators will be linked to local investment communities. Go to the SBDC, which is usually affiliated with a local community college.

Post your company idea on platforms that connect angel investors. The two most reliable sources are:

• Gust Angels
• AngelList

Be wary of anybody or business company trying to source your startup money, especially if you employ them to produce your business plan or pitch presentations. Shark-infested seas

I know some reputable business plan consultants, but they are as scarce as sharks. Not brokers, finders, or advisors, but the company entrepreneurs themselves. Finders’ fees were formerly standard in early-stage investing but are now outdated.

3. Lenders commercial

Banks are incredibly uncommon to invest in or loan money to new enterprises. Their likely source of funding for established small enterprises is banks.

Founders and small company owners quickly blame banks and financial institutions for not funding new ventures. Federal banking restrictions prohibit banks from investing in companies.

The government prohibits banks from engaging in companies because society does not want banks taking depositors’ money and investing in hazardous company ventures that may fail. Is it ok for your bank to invest in new firms (not your own)?

Banks should also not lend money to new businesses for many of the same reasons. Banks must keep money secure via conservative loans supported by reliable collateral. Bank authorities are wary of new enterprises because they lack collateral.

So why do I believe banks are the most probable small company finance source? For the same reason. A few years in the company produces enough stability and assets to serve as collateral. Banks often issue small business loans secured by inventory or accounts receivable. Standard formulae define how much may be borrowed based on inventories and receivables.

Many small company loans are secured by the owner’s assets, such as their house. Some think home equity is the best small business loan source.

4. Small Business Administration (SBA)

The SBA backs loans to small and new enterprises. The SBA does not provide loans directly; it guarantees loans made by private banks. Local banks generally apply for and manage them. Getting an SBA loan usually involves dealing with a local bank.

The SBA typically requires that the new company owner provide at least one-third of the needed capital. A good company or personal assets must back the remaining funds.

The SBA works with banks as certified lenders. The SBA may approve a qualified lender in as little as one week. If your bank isn’t a certified lender, contact your banker for a recommendation.

5. Non-bank lenders

Aside from traditional bank loans, an established small firm may borrow against its accounts receivables.

Accounting receivable finance assists cash flow when working capital gets held up.

If your firm sells to wholesalers that require 60 days to pay and your outstanding bills total $100,000, you may undoubtedly borrow more than $50,000.

Although the interest rates and fees are high, this is a valuable source of small company finance. The lender doesn’t risk payment; if your consumer doesn’t pay, you must repay the loan. These lenders will finance all or part of your overdue bills in many cases.

Factoring is a similar commercial operation. You may sell papers for a portion of what the consumer owes. Since the factor assumes the risk of payment, the discounts are evident. Ask your banker about factoring.

6. Family and friend financing

If I could just advise aspiring entrepreneurs, it would be to realize how much money they need and that it is at risk. Know how much you’re betting, and don’t risk losing money.

I’ll never forget talking to a guy who had spent 15 years attempting to make his sailboat manufacturing firm succeed, only to age and accumulate debt. I’ll tell you one thing: don’t accept money from friends and relatives. If you do, you’re stuck. When a business fails, you need to be able to walk away. I couldn’t do it.

The tale explains why the US government securities rules prohibit non-wealthy, knowledgeable investors from investing in businesses. They don’t completely grasp the danger. Your parents, siblings, friends, relatives, and in-laws investing in your company is a huge compliment. Please make sure you and they both realize how quickly this money might be lost in such a scenario.

While you shouldn’t count out raising funds from friends and family, be aware of the drawbacks. Enter this partnership with an open mind.

Making a profile and pitching your product or service on sites like Kickstarter may be more appropriate for your scenario. It’s gotten so popular that there are dozens of crowdfunding sites, each with its conditions and incentives.

Considerations for business finance

Sadly, finance and investment require money, encouraging unscrupulous business practices and frauds. As a result, here are some reminders.

Be wary of your funders.

Don’t believe that private placement, angels, friends, and family are excellent sources of investment money simply because they are mentioned here or elsewhere. Not all investors are equal in terms of capital. These newer investment sources should be used with utmost care.

Write it down.

Never use someone else’s money without correct legal work. Make sure the documents are signed by a professional.

Don’t spend before getting funds.

Never spend money that hasn’t been supplied. The investment commitments and expenditure contracts often fall through.

When in a bind, avoid turning to friends and relatives.

Also, don’t rely on friends and relatives for investment. When your company is in crisis, you need the support of your friends and family the most. You risk losing friends, family, and business.

Finance is difficult.

Initially, most enterprises are bootstrapped using home equity or savings. The majority of high-growth firms are self-funded. Rare are venture capital agreements. Collateral and guarantees will always override corporate strategies and concepts. And business financing is common for established firms but not for startups.

What measures to take next depends on your company. Generally, high-tech companies should look for angel or family financing first, whereas established enterprises could seek their small business banks. Remember that your company is unique.

LOS ANGELES, CA, May 16, 2022 (GLOBE NEWSWIRE) — Foothills Exploration, Inc. (OTC: FTXP) (“Foothills” or the “Company”), an oil and gas exploration and development company focused on meeting the energy needs of today and tomorrow, is pleased to announce an update on its joint venture with Perspectum Drone Inspection Services, Ltd. (“Perspective”).

Exploration for natural hydrogen is gaining momentum globally as demand for low-cost, carbon-free hydrogen continues to grow exponentially. For example, in the state of South Australiabecause February 2021, a total of 18 exploration licenses have been granted or applied for by six different companies seeking natural hydrogen on lands covering approximately one-third of the state. The Company plans to begin marketing the joint venture’s drone reconnaissance services for the delineation of the lands contained in these 18 exploration concessions. The Company, through its joint venture, also plans to begin unmanned aerial surveys over the lands of the White Lightning Prospect through its participation agreement with Pristine Energy, Inc.

Update on Joint Venture with Perspectum

HHe Exploration Technologies, Ltd. (the “Joint Venture”, the “JV” or “HHe”) integrated its hydrogen sensor into its unmanned aerial vehicle (“UAV”) and was flight tested to assess the navigation and stability performance of the platform. Field testing under optimal conditions continues, but to date HHe has experienced unusually cold and snowy spring weather conditions at its test site. He expects to be in the field testing the sensor detection and mapping software in the coming days.

HHe believes that the combination of optical gas imaging and ambient air analysis provides a new solution for identifying hydrogen in the tiniest volumes and concentrations. Additionally, a collaboration with a research and technology industry partner allows the joint venture to evaluate next-generation drones, which will have heavier payload capacity, extended flight times and capabilities. fully autonomous navigation. These advanced platforms will enable multi-sensor network capabilities of existing and future technologies resulting in the most advanced data acquisition possible.

“We are very pleased with our progress to date on the development of our purpose-built UAV platform,” said Ty Pfeifer, President of HHe “With the accelerating demand for our services, we continue to evaluate innovative technologies, which will keep us at the forefront of hydrogen and helium detection,” continued Pfeifer. “In addition to our ongoing evaluation of new sensor technologies, we also understand the need for more sophisticated UAVs and have ongoing collaboration with one of Canada’s most advanced technical institutes on this issue,” concluded Pfeifer.

About Natural Hydrogen

The field of natural hydrogen (or “gold/white”) exploration has recently emerged on the international stage as a potentially viable alternative hydrogen production method with costs expected to be significantly lower than methane reforming at steam (“grey hydrogen”) and electrolysis using renewable energies. energy (“green hydrogen”). Natural hydrogen is clean and carbon-free with production costs estimated at around $0.75 per kilogram, or about 1/8th of the current cost of producing green hydrogen.

Hydrogen is also gaining unprecedented economic and political momentum globally as an alternative net-zero energy carrier and complement to the “electric everything” movement. Bank of America predicts the hydrogen industry is at a tipping point and heading towards $11 trillionwith hydrogen production expected to increase by 5,000% by 2026. Global demand for clean and green energy continues to grow rapidly, coupled with the need to optimize production and minimize greenhouse gas emissions. greenhouse.

FForward-looking statements

All statements, other than statements of historical fact, included in this release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by us based on management’s experience, perception of historical trends and technical analysis, current conditions, capital plans, drilling plans, expectations of production, our ability to raise adequate additional capital or enter into other financing arrangements to support our acquisition, development and drilling activities, anticipated future developments and other factors deemed appropriate and reasonable by the direction. When used in this release, words such as “will”, “possible”, “potential”, “believes”, “estimates”, “intends”, “expects”, “may” , “should”, “anticipate”, “could”, “plan”, “predict”, “project”, “profile”, “model”, “strategy”, “future” or their negatives or statements that include these words or other words that convey uncertainty of future events or results, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. our future operating results and returns or our ability to acquire or develop proven or probable reserves, our ability to replace or increase reserves, increase production or generate revenue or cash flow are forward-looking statements . .

Forward-looking statements are not guarantees of performance. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Although forward-looking statements are based on assumptions and analyzes made by us that we believe are reasonable under the circumstances, whether actual results and developments will meet our expectations and forecasts depends on a number of risks and uncertainties that could cause our actual results, performance and financial condition to differ materially from our expectations. Accordingly, no assurance can be given that these assumptions are correct or that any of these expectations will be realized (in whole or at all) or prove to be correct. We have had sporadic and limited income and our securities are subject to considerable risk. Investors are urged to review the documents filed by FTXP with the OTC Markets for a discussion of the risks and other factors that affect our business. Any forward-looking statement made by us in this press release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may arise from time to time and it is impossible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. The Company intends that all forward-looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact Investor

Christopher JarvisExecutive Vice President of Finance
(800) 204-5510
[email protected]

Source: Foothills Exploration, Inc.

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