Our Investment In Vauban.io

We haven’t written too many checks lately at our venture firm West Loop Ventures.  It’s been about a year.  We have looked at a lot of deals but just haven’t found the right one to pull the trigger on.  We found one in London that we liked.  We led the fundraising round and will take a board seat.

Vauban is a next-gen fund architect and administrator that lets you start and run your fund in a seamless and digital way.  A simple DuckDuckGo search of “fund formation” will show the sheer number of players in a highly fragmented space.  It’s dominated by law firms.  The process is intimidating to first-time fund managers or people setting up investment vehicles that don’t understand the process.

Vauban works for any type of fund.  Want to set up a hedge fund?  A Special Purpose Vehicle (SPV)? Real Estate fund? Multi-Strat fund?  PE Fund?  VC Fund?  You can use Vauban to set it up.  This process is extremely time-consuming and expensive.  For some funds, the legal costs can run up to $150k or more.  Vauban does it all for a very low cost.  They can set up your fund structure, and where it is domiciled.  They can open up bank accounts automatically for you.  They help educate you on the finer points of operating the fund and they also do fund maintenance for a low-cost fee.

We see a lot of people that are successful hedge fund traders leave to start their own fund.  Lately, it’s been in the crypto space.  Suppose you can only raise a small amount of money, $1M-$3M.   The cost of setting up the fund and operating it overwhelms any of the gains so when a lot of people are faced with this, they don’t do it.  Vauban can do it across asset classes and across jurisdictions. They enable fund managers.

The other thing that is done quite often in countries outside of the US is special purpose vehicles.  In the US it’s relatively easy to set up and operate although it can be expensive.  In other jurisdictions depending on the type of fund, it can be really expensive and tough to execute.  Vauban makes it simple and cheap.  This allows more capital to flow into places freely and more efficiently.  It’s a boon to family offices.  When one of our LPs saw it they wished Vauban existed for them when they set up their business.

How do they do it?  They do it with technology.

Automating the process of setting up investment vehicles advantages the fund manager and the legal practitioner.  They can work on the things that are important.  Forming wealth containers, which include Funds, SPVs, Investment Vehicles, Holdings, Inheritance Trusts, Nominee Vehicles and REIT’s, is complicated. It involves paper-based processing, opaque pricing, manual verification and accreditation, paper certificates and wax seals, couriers and faxes.   Business is typically done through buying booths at conferences and wine and dine nights out. Vauban automates the process, allowing smaller funds to form online with transparent pricing. 

Remy Astie is CEO and previously managed Cayman operations at a boutique Corporate Services Provider. Ulric Musset is CTO and specialized in Applied Mathematics and Artificial Intelligence. Prior to starting Vauban, Ulric was developing pricing and risk visualization application for AXA Insurance. Remy and Ulric first co-founded a company together in 2013.   They are both from France but live in London.

Vauban is hiring both technologists and business development people.

This is our second investment on the other side of the Atlantic.  We are finding that the cities which are great for our deal flow are the major financial exchange centers.  Chicago, New York and Atlanta in the US.  London in the UK.  It’s pretty rare for a small micro seed fund to do investments outside of their city but we continue to do it.  Currently, we are based in Chicago with three investments here (Magalytics, OpenFinance, HolbergFinancial).  We have one investment in New York City and one in Galway, Ireland.  We led every deal except FInMkt and serve on the boards of every company except FinMkt.

Ironically, recently I met with the Mayor of London and his delegation in Chicago and they were pretty excited that we were investing in a London based company.