Sigil launches VC fund Zee Prime 2
We are delighted to announce we just launched a third fund cell under the regulated Sigil fund umbrella. Zee Prime II is a Venture Capital fund investing in early stage crypto projects including private sales of tokens, SAFTs and equities in crypto start-ups. Zee Prime II is the next chapter of a successful Zee Prime I private venture.
Zee Prime II VC fund launching under Sigil umbrella means different things for different people. For the Sigil family of investors, friends and collaborators this means Sigil launching a third strategy. Next to Sigil Core and Sigil Stable that are hedge funds with daily liquidity and NAV, there is now a new VC fund. You are probably wondering what Zee Prime is and how it all came together.
Some of you reading this have known Zee Prime Capital from the VC world for years but don't know Sigil fund at all. In the past years Zee Prime Cap operated as a private investment firm, so - what exactly is Zee Prime II and what are the details, right?
Multi-strategy face of Sigil
Sigil fund, or in its full legal name Sigil PCC Limited, is a fully regulated Experienced Investor Fund in Gibraltar. In Gibraltar funds are structured as companies. As a PCC or “Protected Cell Company” you can launch an unlimited number of regulated funds (or “cells”) that are completely segregated from each other.
The funds have different strategies, subscription documents, custody solutions, fees, reporting, redemptions etc. In simple terms just think of every fund “cell” as a separate fund. For more structuring details you can watch the video talk between Sigil CEO Pavel and EIF director Peter.
Sigil and Zee Prime cooperation
Sigil and Zee Prime have always been different brands and legal entities. Despite separated legal structures, ownership and funding we have been cooperating very closely, as if we were one research team. We are a group of friends passionate about crypto and we’ve always shared all the research and insights with each other.
Sigil CIO and Co-founder Fiskantes is a Zee Prime Partner and has always been working for both entities. Having insights from presale rounds, VC deals (Zee Prime) and running a liquid hedge fund strategy (Sigil fund) has been a powerful combination for Fiskantes and both our teams to get involved in projects of all stages of maturity. Both brands greatly benefited from these synergies.
Sigil CEO and Co-founder Pavel has been serving as a local Director in Zee Prime investing vehicles and the company that launched the HydraDX project from Gibraltar. This initial light cooperation on legal and statutory matters eventually led to setting up a Zee Prime II fund in Gibraltar.
What's the latest news in crypto VC investing?
As you will know, there are flourishing crypto ecosystems such as Ethereum, Solana and Terra. There is a lot of traction on Avalanche, Cosmos, Kusama or Polkadot - in alphabetical order to avoid unintended benchmarking. These ecosystems offer plenty of investment opportunities in various stages, from seed to listed and liquid on secondary markets.
One can invest in multiple layers from blockchains, DeFi, middleware, interoperability bridges, layer 2s and sidechains, NFT infrastructure, NFT Gaming and more products and applications getting launched every day. DAOs are booming as a way to coordinate funding and incubation of these activities.
Just before writing this article, we spent 6 weeks in a row conferencing in Gibraltar (1 week), Lisbon (4 weeks) and Switzerland (1 week). The most evident observation we made during these events is that capital is abundant. There are more people eager to invest than there are high quality projects.
The typical question we get asked by people is “Can you get us in early stage rounds as co-investors”? The answer is generally no. Founders usually want to choose their investors - so past track record and strategic value add plays a role. There is not enough space in these rounds. Rounds get closed so fast that we usually have time to focus only on our allocation. BUT – there is now a Zee Prime II fund.
About Zee Prime II
Zee Prime II fund is the first Zee Prime branded entity that is accepting external investors. We are still primarily investing our money (both Sigil team and Zee Prime team including Matti and Jakub are personally invested) but roughly ⅔ of the fund was offered to non-GPs.
The goal is to be a rather small and very agile VC fund. We originally wanted to raise a maximum $25m in order to be able to allocate quickly and have a meaningful small ticket ($100k-300k) in many great projects alongside some larger tickets where preferable. Due to the lot of demand we eventually increased the max size of the fund to $35m looking to write checks anywhere in the $100k to $1.5m range.
The fund has a lock up for at least 5 years. We aim to allocate all capital within the first 2 years and start returning capital from the year 5 to 10. The way we are thinking about the life cycle of the fund is following:
Y1-Y2: Capital Deployment - investing in new deals.
Y3-Y7: Portfolio Consolidation - assessing portfolio and potentially reducing the number of positions by 10 to 25%, allocating more towards high conviction positions.
(Y5): An option for GPs to start returning capital (totally at GP’s discretion).
Y7-Y10: Unwind (for those LPs who prefer in kind distribution, this will be available).
The goal for the fund is to be as flexible as possible to successfully navigate the dynamic waters of early stage crypto investing.
We are very excited about the launch of Zee Prime II. It is a closed ended fund which was quickly oversubscribed, so it is not possible to join it as an investor at the moment.