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Molten Ventures
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== Risk factors == The principal risk factors relating to Molten Ventures include: * Early-stage business risk: the early-stage nature of Molten’s portfolio businesses carries a high degree of risk, with Molten Ventures also exposed to risks related to non-controlling investments. Not all of the fund investments will achieve their hoped-for potential. To mitigate this risk, management invests in seed funds, as well as Series A and B stage companies and is looking to launch a co-investment fund to allow the group to make follow-on investments and continue to support its later-stage (Series B+) companies. * Portfolio concentration: Molten Ventures holds a relatively concentrated portfolio of investments. Realisations and investor returns may be dominated by a limited number of investee companies. * Reputation and deal flow: Molten Ventures relies on the reputation of its senior investment team (with over 100 years of combined experience), its strategic contacts and ecosystem to source appropriate deal flow and deliver the quality of investment opportunity to drive attractive investment returns. * Technology sector: the company is subject to risks associated with developments in the technology sector, including the cyclicality of valuations in the sector and potential trade tensions between China and the US, as well as other unforeseen future developments. Molten Ventures seeks to mitigate this risk by investing across four discrete segments of the technology sector, which allows the group to be simultaneously investing in one sector (eg digital health and wellness) while realising investments from another (eg consumer technology). * Valuation risk: Molten’s investments are difficult to value accurately, with valuation methodologies subject to significant subjectivity. There can be no assurance that the reported values of the company’s investments will be realised. As mitigation, it should be noted that the majority of Molten’s investments have been exited at a premium to holding value, highlighting management’s conservative approach to valuation. In addition, exposure to private technology companies can otherwise be hard to identify in the public markets. The NAV returns on Molten’s portfolio have a relatively low correlation to listed equity markets, as valuations of private technology companies take time to adjust to public market valuations, supporting fund diversification and reducing portfolio volatility. * Liquidity events: exits are uncertain and difficult to predict and proceeds from trade sales/IPOs are likely to vary substantially from year to year, with the potential for liquidity events to slow if technology valuations fall.
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