When we invest money in a company, we want to be sure every dollar is invested in increasing shareholder value in the business.
Most investors are increasingly concerned about the fees they are paying to their financial advisors and fund managers.
Our commitment to our shareholders is to operate Fundamental Technologies II (FTII) with the lowest possible overheads and expenses.
We are proud that, after expensing everything, our total expenses as a percentage of assets are under 0.5% per year.
No Management Salaries or Management Fees
Our management team draws no salaries from FTII. We don't charge management fees. Our return for the work we do is a 20% share of the realized gains that exceed 8% per year compounding. We only make money from FTII when our investors do.
No Sales Fees
Similarly, we do not pay sales commissions to our financial partners who assist us in raising capital. Many professionals who provide financial services, especially to high net worth clients, are moving their business models to a simple annual fee for all of their services. This is often called a 'wrap' fee. They believe this model is most fair to their high net worth clients. These professionals want to be measured on the returns, advice and information they provide to their clients.
FTII is a perfect fit for this model and an ideal component of an overall portfolio strategy for these professionals and their clients.
Minimizing Legal and Accounting Fees
Another way we keep our costs low is by carefully managing our legal and accounting fees. We keep legal fees low by using simple common-sense agreements with our investee companies. Basil Peters has championed a return to simpler, common sense angel investment agreements and makes some of these available free to anyone on his blog at www.AngelBlog.net.
Accounting and audit fees have skyrocketed as a result of the court cases around Enron and similar cases over the past several years. Every year we will ask our shareholders if they agree to waive the costs of a full formal audit because we don't think it's necessary in a very simple organization like Fundamental Technologies II.
Another way we are frugal with our investors' capital is to have all of our information and communications in electronic form only. BC has very modern electronic information legislation and companies can be fully compliant with only electronic records. We will provide our investors information and records by e-mail, and through the web, saving our all of our shareholders the costs of mailing hard copies and filing paper records.