Venture Equity. A new asset class.

Portfolio Assembly · Confidential · Spring 2026

The Reckoning

Between 2020 and 2022, venture capital deployed more money than any period in history.

The power law guarantees most of it will never come back.

But here's what no one is saying out loud: the companies aren't dead. They're stuck.

Real products. Real revenue. Real customers. Trapped inside capital structures built for a world that no longer exists.

2

The Stranded Generation

This isn't a cycle. This is the math.

1,000+

U.S. startups in "zombie" status today

$100B+

Venture capital frozen in limbo

60-70%

Will never return meaningful capital

Startup shutdowns hit record highs in 2024 — 58% YoY increase. Every fund vintage produces more stranded companies than winners. Every year. Forever.

Sources: Carta, Crunchbase, Harvard Business School

3

Everyone Is Paralyzed

VCs can't help.

Bridging a "loser" drags down IRR and signals defeat to LPs. They'd rather let it die quietly.

PE can't help.

Too small, no EBITDA, cap tables are a mess. Doesn't fit the model.

Founders are trapped.

Can't raise. Can't sell — preferences eat the proceeds. Can't quit — employees and customers depend on them.

The result?

Capital is frozen. Talent is stuck. Value is decaying. And no one is doing anything about it.

4

We See What Others Don't

These aren't failures.

They're $2-5M ARR software companies with proven products, millions in sunk R&D, and real customers.

The problem isn't the business. The problem is the capital structure.

The value is there. It's just stuck.

5

We Built the Key

RavenRock Venture Equity exists to unlock trapped value.

Structured bridge capital — not an acquisition, not a bailout
Performance-linked governance — we earn control, we don't demand it
Operational playbook — we don't just recapitalize, we refactor
Aligned incentives — founders, VCs, and LPs all win

We're not bottom-feeding. We're unlocking alpha that everyone else has written off.

6

What is Venture Equity?

An emerging asset class at the intersection of early-stage venture, special-situations PE, and micro-SaaS roll-ups.

We're institutionalizing a strategy that today is fragmented across small acquirers, hold-forever funds, and ad-hoc restructurings.

VC Fund Structure

LP/GP, 2 and 20. Familiar to allocators. Clean and institutional.

PE Operational Playbook

We don't just invest. We restructure, refactor, and run the turnaround.

A Market No One Else Touches

Stranded VC-backed software. Too small for PE. Too broken for VC. Perfect for us.

7

The Market

A permanent, replenishing opportunity.

TAM	$100B+ stranded venture capital (2020-2022 vintages alone)
SAM	3,000-6,000 companies globally in $2-5M ARR range, 18+ months since last round
SOM	1,000+ U.S. software companies matching our buy box today

The market replenishes every year. The power law guarantees it. Every VC vintage produces a new cohort of stranded companies.

8

The Competition

Dedicated institutional capital for this strategy: $0.

Player	Deals/Year	Why They Don't Compete
Hold-Forever Buyers Curious, etc.	Handful	Buy outright. Won't touch messy VC cap tables or deploy structured bridge.
Micro-PE Aggregators Constellation, SaaS Group, Ionic	20-50 each	Want profitable. Won't restructure. Won't negotiate VC preferences.
Turnaround Advisors A&M, etc.	N/A	Bill hourly. Don't write checks. Advisory only.

< 50 deals/year absorbed by adjacent players. 950+ companies/year with no solution.

9

Why RavenRock Wins

We're the only fund that does all of this:

Deploys principal capital (not advice)
Into VC-backed companies (not clean acquisitions)
With structured instruments (not outright buyouts)
And executes operational turnarounds (not just financial engineering)
Building a repeatable, scalable playbook from day one

We're not competing for deals. For most of these founders, we're the only call to make.

10

Investment Criteria

What we look for.

$2-5M ARR — Enough to matter, small enough to be ignored
75%+ gross margin — Pure software. No services dependency.
< 6 months runway — Existing investors have declined to bridge
Proven product-market fit — Real retention, real customers
Impaired capital structure — Overpriced last round, stacked preferences
Aligned founder — Willing to accept restructuring for a path forward

11

Deal Structure

Structured bridge with performance-linked conversion.

$500K-$1.5M convertible note — Provides runway to execute
Performance targets — Tied to profitability milestones
Month 6: Board control if targets missed
Month 9: Majority ownership if targets missed

We don't buy cheap companies. We buy stuck companies at the price of unsticking them.

12

The Playbook

9 months to profitability.

Months 1-2

Surgical Strike

50-70% headcount reduction
R&D freeze — maintenance only
Deploy AI support stack
Key customer outreach

Months 2-4

Optimize

30-50% infrastructure cost reduction
2-4 engineers replace 10-20
Automated monitoring live
AI operations deployed

Months 4-9

Profitability

Inbound-only revenue model
Monthly P&L governance
Steady-state: 5-10 FTEs
Target: $75-150K/mo profit

13

Illustrative Transaction

B2B SaaS · $4M ARR · 78% Gross Margin · Series A @ $32M · 6 weeks runway

Before

$4M ARR

($400K)/mo burn

35 employees

6 weeks runway

→

After

$3.5M ARR

$100K/mo profit

10 employees

Indefinite runway

RavenRock Investment: $750K Convertible Note

Targets Met: Converts at $12M cap → ~6% ownership

Targets Missed: Converts at $1.5M cap → 51%+ ownership

Exit at 3x ARR = $10.5M

7-8x Return

14

Risk Mitigation

Structural downside protection. Uncapped upside.

Revenue from day one. No product-market fit risk.
Cost basis = fraction of replacement value. $750K into $20M+ of sunk R&D.
Profitability is within our control. We cut costs. We don't need the market to cooperate.
Multiple exit paths. Strategic sale to software acquirers and AI-native operators, PE roll-up, cash distributions, or long-term hold.

Even if ARR drops 30%, our basis is low enough that capital recovery is likely.

15

Why Everyone Says Yes

Aligned incentives across all stakeholders.

The Founder

Challenge:

Trapped. Can't raise. Can't sell — preferences eat the proceeds.

Solution:

The only path forward that doesn't require a miracle.

Existing VCs

Challenge:

Every zombie drags down IRR and poisons the next fundraise.

Solution:

Free option on recovery. New money in, board seat off their hands.

Our Investors

Challenge:

Traditional VC: long J-curves, binary outcomes, concentrated returns.

Solution:

Venture exposure with downside protection. Faster distributions.

16

Deal Flow

Proprietary sourcing in a market with no competition.

01

Direct GP Outreach

2019-2021 vintage funds with stranded portfolios looking to clean up

02

Founder Network

Every successful restructuring creates referrals. Stuck founders know stuck founders.

03

Signal Monitoring

Hiring freezes, missed launches, founders updating LinkedIn to "open to opportunities"

04

Secondary Brokers

See distressed positions before the market does

The Flywheel: Successful outcomes → reputation → inbound → better selection → better outcomes

17

Team

Jason Mackey

Co-Founder & Managing Partner

Serial entrepreneur and investor. Deployed AI systems for Fortune 500 and US government agencies. Ownership in Anthropic, OpenAI, and Anduril.

Yuri Cataldo

Co-Founder & Partner

MIT MBA. Co-founded Autodesk's Innovation Program, evaluating 800+ startups. Deep expertise in construction, manufacturing, and industrial AI.

Key Hire: Technical Operating Partner

Executes the restructuring playbook inside portfolio companies. Engineering leadership, lean teams, AI-native operations. Critical to scaling the strategy.

18

Deal Structure

How we structure each investment.

Structure	Deal-by-Deal SPV
Check Size	$500K – $1.5M per deal
GP Economics	2% management fee / 20% carry
Initial Deals	2–3 (portfolio assembly phase)
Min. Per Deal	$100K
Target Hold	2–4 years
Target Return	3–8x per deal
Exit Path	Software acquirers & AI-native operators (3–5x revenue)
Fund I Path	Post-assembly: $25M target based on proven performance

19

Portfolio Assembly

Assembling the initial portfolio before institutionalizing the fund.

The Approach

We are executing 2–3 initial deals via independent SPVs. Each deal offers full transparency into the target company, the terms, and the restructuring plan. Investors participate deal-by-deal.

Priority Access

Early SPV investors receive priority allocation in Fund I ($25M target), which will scale the proven playbook to 15–25 companies with an institutional operator bench.

Risk Mitigation: Revenue from day one. Cost basis is a fraction of replacement value. Profitability is within our control. Multiple exit paths. Even if ARR drops 30%, capital recovery is highly likely.

20

Why Now

Four forces converging.

Supply at Historic Peak

Post-ZIRP correction stranded thousands of companies at once. Largest inventory of quality targets ever.

AI Makes It Possible

A 5-person team can now maintain what required 20 two years ago. This strategy couldn't work in 2019.

GP Motivation at Maximum

Funds deployed 2020-2022 are approaching end-of-life. They need solutions. They'll send us deals.

The Category Doesn't Exist

First mover defines it. We're not entering a market. We're creating one.

21

The Vision

Building permanent infrastructure for the other side of the power law.

Now

Portfolio Assembly

2–3 SPV deals. Prove the playbook. Build the track record.

12-18 Months

Fund I

$25M target. 15–25 companies. Built-in LP base from SPV investors.

36+ Months

Fund II+

Scale the platform. Build operator bench. Become the default destination for stranded startups.

Venture capital will always produce more stranded companies than unicorns. RavenRock is building permanent infrastructure to capture this opportunity.

22

The Moment

This is a category-defining opportunity.

Venture Equity doesn't exist as an institutional asset class — yet.

The question isn't whether this market exists. The data is clear.

The question is whether you want to own the platform that institutionalizes it.

Portfolio assembly is how you get in at the ground floor.

23

Venture Equity. A new asset class.

Jason Mackey · jason@ravenrock.vc · (617) 388-6629

Yuri Cataldo · yuri@ravenrock.vc · (917) 547-8230

ravenrock.vc

Confidential · For Qualified Investors Only