Decoded Ventures

Catalyst Fund

Pre-seed capital and an in-house build team for New Zealand technology companies. Open to wholesale investors only.

NZD 11M
Fund size
15
Target ventures
Pre-seed
Stage
7 years
Fund term
NZD 5.5M subscribedof NZD 11M
Register your interestDownload fund overview

The fund

We invest at pre-seed and then build the product ourselves.

Catalyst Fund takes positions in New Zealand technology companies before they have a product. Decoded Studios then does the engineering and design, which keeps a company's burn low while it looks for its first customers.

We also take the repeatable operational work off founders: entity setup, billing, reporting, R&D grant applications. The intent is that a company reaches a seed round with evidence rather than a deck.

Investment strategy
Pre-seed stage. Capital plus active operational support, aimed at preparing companies for a seed round.
What we take on
The repeatable work that eats a founder's week, so their time goes to the product and the customers.
Why New Zealand
Local technical talent is strong and under-capitalised at this stage. That gap is the reason the fund exists.

Terms

Fund terms and economics

Minimum investment
NZD 100,000Minimum commitment, set out in the Subscription Agreement
Hurdle rate
8% Preferred ReturnReturn to LPs before the GP takes any profit share
Carried interest
20%GP profit share once the hurdle is met
Management fee
2.5% p.a.Annual fee on committed capital
Fund structure
7-year LPNew Zealand Limited Partnership, seven-year term
Capital allocation
65% / 35%Initial deployment against follow-on reserve
Capital calls
Single initial callCalled upfront so the fund can move quickly
Distributions
WaterfallPaid from exits, per the distribution waterfall

Illustration

When returns arrive

Venture investments mature slowly. Nothing comes back in the first two years, and most of it lands late as companies exit. The shape below is a model of that timing, not a forecast of this fund.

Illustrative cumulative return by year over a seven-year fund life

This is a modelled shape based on how pre-seed funds typically pay out. It is not a projection of this fund's performance and it is not a promise of any return. Actual outcomes depend entirely on how the portfolio companies do, and a total loss is possible.

How the outcomes usually spread

Pre-seed portfolios follow a power law. A few companies carry the fund and a large share are written off entirely.

Typical share of a pre-seed portfolio by outcome band
10x – 50x
Drive most of the fund's return
~20%
2x – 10x
Solid outcomes
~25%
0.5x – 2x
Roughly return capital
~35%
Write-offs
Total loss
~20%

Distributions

The waterfall

Money coming out of an exit is paid in this order. Each step is filled before the next one receives anything.

  1. 01

    Return of capital

    100% back to the funders first

  2. 02

    Preferred return

    8% to funders before the GP participates

  3. 03

    GP catch-up

    Decoded Ventures catches up to its 20% carry

  4. 04

    Profit split

    80% funders / 20% Decoded Ventures

The difference

We build, not just invest

The studio model changes what a pre-seed dollar buys. It also changes who carries the risk of building the wrong thing, which is us as much as the founder.

The traditional pre-seed model compared with the Decoded studio model
 Traditional modelDecoded model
Who builds the productThe company hires an agency or a full-time team on day oneDecoded Studios builds it, as part of the investment
Effect on burnPayroll and agency fees consume the round quicklyA shared team keeps monthly burn low while the company finds customers
Time to a working productMonths, with hiring and onboarding before any code is writtenWeeks, because the team already exists and has built this before
After the buildThe contract ends and the builder moves onA profit share keeps the studio tied to how the company actually does
For funders
A lower build cost means more of the fund goes into growth rather than payroll. Studio profit share is a second route for money to come back, separate from exits.
For founders
A product gets built without hiring a team before there is revenue, and the people who built it are still there in month twelve.
For New Zealand
Technical capability stays and compounds locally, and founders at the earliest stage have somewhere to go that is not an overseas accelerator.

Structure

Fund structure and portfolio

Dedicated fund entities, a clear separation between the limited partners and the general partner, and the ventures currently held.

Funding

Catalyst Fund

Ignition Fund

Future Fund

Operations

GPLPFundStudioVenture

How it works

How Catalyst Fund creates value

Capital is only part of it. The rest is the operational and technical work we do on a company after we invest.

  1. 01

    Capital

    First cheque and the resources to start

  2. 02

    Build

    Studios builds the product

  3. 03

    Validate

    Funded pilots with real customers

  4. 04

    Launch

    First paying customers and a repeatable sale

  5. 05

    Seed

    Raise the next round on evidence

Involvement from day one
Operational and technical work, not quarterly advice. The partners are on the company, not just its board.
Capital efficiency
Every dollar is aimed at proving or disproving something. Cheap answers first, expensive ones only when they matter.
Operations taken off the founder
Entity setup, billing, reporting, R&D grant applications. The work that has to happen but does not need the founder.
Monitoring through rilo.studio
Our operating platform gives the founder and the fund the same live view of how a company is tracking.
An international team
Engineering and production capacity across four countries, so a company can build without carrying the headcount.

Process

From first conversation to commitment

Six steps, typically four to eight weeks end to end depending on how long due diligence takes.

  1. Step 01

    Immediate

    Expression of interest

    Fill in the form on this page. It is non-binding and simply tells us you want to talk.

    Documents

    • Investor interest form

  2. Step 02

    1–2 weeks

    First conversation

    A call to go through the fund, answer your questions, and work out whether it is a fit. We also cover your wholesale investor status here.

    Documents

    • Fund overview
    • Risk disclosure statement

  3. Step 03

    2–4 weeks

    Due diligence and documentation

    You review the fund documents and do your own diligence. We give you access to everything and answer whatever comes up.

    Documents

    • Limited Partnership Agreement
    • Subscription Agreement
    • Investment Management Agreement
    • Interests Policy
    • Comprehensive risk disclosure
    • AML/KYC documentation

  4. Step 04

    1–2 weeks

    Wholesale investor verification

    Verification as required under the Financial Markets Conduct Act 2013, including evidence of eligibility.

    Documents

    • Eligible investor certificate
    • Supporting documentation

  5. Step 05

    1 week

    Commitment

    You sign the Subscription Agreement and the Limited Partnership Agreement, and confirm your commitment amount.

    Documents

    • Signed Subscription Agreement
    • Signed Limited Partnership Agreement
    • Capital commitment letter

  6. Step 06

    As scheduled

    Capital call

    Once the fund reaches its first close, capital is called against the investment schedule. You get notice in advance.

    Documents

    • Capital call notice
    • Wire transfer instructions
How long it takes
Four to eight weeks from first contact to commitment, depending on how much diligence you want to do.
Get your own advice
We strongly recommend independent legal, financial and tax advice before you commit. Nothing on this page is a substitute for it.
Questions at any point
info@decodedventures.com

Risk

What can go wrong

Early-stage investing carries a real risk of losing everything you commit. Please read this section properly before going further.

Read this before going further

Investing in a venture capital fund carries significant risk, including the risk of losing everything you commit. You should only invest if all of the following are true:

  • You are a wholesale investor as defined under the Financial Markets Conduct Act 2013
  • You can afford to lose the entire amount invested
  • You understand how early-stage venture investing works
  • You have taken independent professional advice
  • You accept that the money is committed and illiquid for seven years

Investment risk

  • Early-stage companies are highly speculative and carry a high degree of risk
  • There is no guarantee of any return, and you may lose the entire amount invested
  • Past performance does not indicate future results
  • Venture investments are illiquid and may take years to produce anything
  • Returns are exposed to market conditions outside anyone's control

Liquidity risk

  • Limited Partnership interests are not readily transferable and may be difficult to sell
  • There is no secondary market for LP interests
  • Capital is called during the investment period and committed for the seven-year term
  • Distributions depend on exit events, which may be delayed or may never happen
  • Any redemption window is subject to fund terms and to capital being available
  • Only commit capital you can afford to have locked up for seven years

Concentration risk

  • The fund invests in a limited number of companies, which may not be adequate diversification
  • Holdings are concentrated in technology, which increases sector-specific exposure
  • A small number of exits may account for most of the fund's return
  • Many portfolio companies are expected to fail completely
  • Geographic concentration in New Zealand limits diversification

Management risk

  • Performance depends on the judgement of the General Partner
  • Loss of key team members could materially affect the fund
  • Conflicts of interest can arise between the fund, portfolio companies and Decoded Studios
  • The General Partner has broad discretion over investment and allocation decisions
  • Management fees and carried interest reduce what reaches Limited Partners

Regulatory and tax risk

  • Changes to New Zealand tax law could affect fund returns or structure
  • Changes under the Financial Markets Conduct Act may affect fund operations
  • Changes to securities law could affect exit routes and valuations
  • Tax treatment for non-New Zealand investors varies
  • Compliance costs may rise over the life of the fund

Portfolio company risk

  • Early-stage companies have little operating history and unproven models
  • Further funding rounds may dilute the fund's ownership
  • Competition in technology is intense and moves quickly
  • Technology shifts can make a business model obsolete
  • Companies may never reach product-market fit or scale
No guarantees
The fund does not guarantee returns and there is no assurance its objectives will be met.
Wholesale investors only
Retail investors are not eligible. As a wholesale investor you do not get the regulatory protections that retail investors receive under the Financial Markets Conduct Act 2013.
Do your own diligence
Consult qualified financial, legal and tax advisers before investing. The full statement is in the investor resources below.

Compliance

Regulatory status and AML/KYC

The fund's legal standing, and the documentation we are required to collect from every investor.

Regulatory status

Where the fund stands

Limited Partnership registration
Catalyst Fund is a New Zealand Limited Partnership registered under the Limited Partnerships Act 2008.
Wholesale investor exemption
Offers are made only to wholesale investors under the Financial Markets Conduct Act 2013. That exempts the fund from the disclosure requirements that apply to retail offers, which is why retail investors cannot participate.
Ongoing compliance
The fund operates under New Zealand financial markets legislation and its associated regulations.

AML / KYC

What we have to collect

Under our Anti-Money Laundering and Countering Financing of Terrorism obligations we must verify the identity of every investor and run due diligence checks.

Required from you

  • Government-issued photo identification (passport or driver's licence)
  • Proof of address (utility bill or bank statement, dated within three months)
  • Source of funds documentation (bank or investment statements)
  • Wholesale investor verification (eligible investor certificate or supporting evidence)
  • For entities: certificate of incorporation, trust deed, or equivalent

We may need more depending on your circumstances and our risk assessment. Everything is handled under privacy law and our AML/CFT obligations.

This is not advice
Nothing here is investment, financial, legal or tax advice. Talk to qualified professionals before deciding anything.
No guarantee of returns
Past performance says nothing about future results. There is no assurance you will get your capital back.
Eligibility
The fund is open to wholesale investors only. Retail investors will not be accepted.

Questions

Frequently asked

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Documents

Investor resources

Fund documentation and governance materials for wholesale investors.

Legal Documents

Legal agreements and partnership documents

Risk & Disclosure

Risk disclosures and investment warnings

Financial Information

Financial statements and fee information

Due Diligence

Due diligence materials and process documentation

Register interest

Tell us you are interested

This is a non-binding expression of interest, open to wholesale investors only. We will come back to you to talk through the fund and answer questions.

Or email us directly at info@decodedventures.com

Wholesale Investor Confirmation

Catalyst Fund is only available to wholesale investors as defined under the Financial Markets Conduct Act 2013 (New Zealand). Wholesale investors generally include:

  • Investors with net assets exceeding NZD $5 million, or gross income exceeding NZD $200,000 per year
  • Institutional investors (banks, insurance companies, managed investment schemes)
  • Large entities (assets exceeding NZD $10 million)
  • Certain professional investors and eligible persons

Important: As a wholesale investor, you will not receive the same regulatory protections as retail investors under the Financial Markets Conduct Act 2013. You are presumed to have sufficient knowledge and experience to assess the offer and understand the risks involved.

We will verify your wholesale investor status before accepting any investment commitment. You may be required to provide an Eligible Investor Certificate and supporting documentation.

For more information, please refer to the FMA guidance on wholesale investor exclusion.

This page is information only. It is not an offer of financial products, a product disclosure statement, or financial advice. Any offer is made only to wholesale investors under the Financial Markets Conduct Act 2013, on the terms of the fund's Limited Partnership Agreement and Subscription Agreement.