BIP Ventures Evergreen BDC

Legal structure and management

Organized as a Delaware statutory trust that elects to be treated as a business development company (BDC) under the Investment Company Act of 1940.
Externally managed by BIP Capital, LLC (doing business as BIP Ventures), an SEC-registered investment adviser.
Governed by a Board of Trustees that includes Independent Trustees.

Primary objective: maximize capital appreciation.
Invests in U.S.-based companies, primarily through direct equity investments and convertible notes; may also make debt investments.
May invest up to 30% of assets in non-qualifying investments (for example, non-U.S. companies or private funds), with no more than 15% of net assets in funds relying on Section 3(c)(1) and/or 3(c)(7) of the 1940 Act.
Will not invest in cryptocurrencies.

As a BDC, at least 70% of assets must be qualifying assets under the 1940 Act, which include investments in eligible portfolio companies and related instruments.
May hold cash and high-quality debt instruments maturing in one year or less as temporary investments to maintain the 70% threshold.
Classified as non-diversified under the 1940 Act, so it is not subject to diversification limits with respect to single issuers (subject to other 1940 Act restrictions such as asset coverage).

Sector emphasis: Healthcare IT, Fintech, Enterprise SaaS, Insurtech, software development and infrastructure tools, and media/marketplace technology.
Stage focus:
- Traction: early rounds, typically companies with $1M–$5M ARR.
- Scale: later-stage, near-breakeven or cash-flow positive, typically $5M–$10M ARR.
- Growth: generally more than $10M ARR (as defined by the Adviser).
The Adviser follows a multi-stage approach: sourcing, due diligence, deal refinement, closing, and post-investment performance work.
Prefers companies with recurring revenue, high margins, and sustainable competitive advantages.
Considers regional opportunities across the U.S.; the Southeast and Midwest are considered but are not principal geographic targets.

Sourcing driven by inbound and outbound campaigns and relationships, supported by data and technology, including increasing use of AI tools.
Due diligence covers market/category (size and demand), company assessment (leadership and operations), and data-driven KPI analysis; transactions are reviewed and approved by an Investment Committee.
Post-investment processes include a 100-day onboarding plan, monthly financial reporting, and ongoing performance monitoring.
Investments are marked to fair value quarterly; Level 3 assets receive periodic independent valuation review on a rotating basis.

Operates under an SEC exemptive order that permits co-investments with Adviser affiliates under specified conditions; Board oversight is required for co-investments.
The Adviser and the Company maintain a Code of Ethics and established compliance procedures.
Fiduciary proxy voting authority is delegated to the Adviser, with conflict-of-interest policies in place.

Conducts a continuous private offering of Shares to accredited investors under Regulation D (Rule 506(c)).
Offering terms:
- Shares sold at NAV per share, determined quarterly by the Board.
- Initial offering price: $25.00 per Share.
- Minimum initial subscription: $10,000; subsequent minimums: $5,000.
- NAV per Share calculated quarterly; purchase price for new Shares is NAV as of the last day of the preceding quarter, determined within 20 business days.
Escrow and capitalization:
- Initial escrow required $25 million of purchase orders to commence operations; escrow released to begin on July 13, 2023.
Liquidity:
- Does not expect a public market for Shares; liquidity is expected to come from portfolio exits or other liquidity events.
- Contemplates a share repurchase program beginning three years after escrow (around August 24, 2023) to repurchase 4%–9% of outstanding Shares annually, subject to Board discretion and applicable conditions.
NAV-based pricing and timing: NAV is determined quarterly; issuance pricing reflects NAV differences between order and issuance dates per the offering’s quarterly cut-off rules.

Management fee: 1.75% per year of average net assets if assets are below $500 million; 1.50% if assets reach at least $500 million.
Incentive fee / allocation:
- Through December 31, 2024: 20% of cumulative aggregate realized capital gains (plus certain interest) minus losses and depreciation, accrued quarterly and paid on realized gains.
- Beginning January 1, 2025: 20% of the Company’s Cumulative Realized Gain Amount allocated to the Adviser’s Capital Account; accruals occur quarterly and allocation applies on dispositions. These allocations may be distributed to the Adviser even if no distributions are made to shareholders.
NAV calculations reflect deduction of the Incentive Allocation when determining net asset value per share.

The Adviser values Level 3 assets through a multi-step process and engages independent valuation firms on a rotating basis.
Market quotations are used when available; otherwise fair value is determined in good faith by the Adviser with input from valuation committees and independent evaluators.
A substantial portion of the portfolio is expected to be Level 3 assets, which require judgment in valuation.

Expected to be treated as a partnership for U.S. federal income tax purposes; issues Schedule K-1 to Shareholders.
The Adviser manages tax reporting and elections, including potential Section 754 basis adjustments at its discretion.
The offering documentation addresses U.S. federal tax considerations such as UBTI for tax-exempt investors, PFIC rules for certain non-U.S. investments, and potential effectively connected income for non-U.S. investors; tax outcomes depend on individual circumstances.