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F.A.Q.

Source: Nucleation Capital ~33 min read
From Nucleation Capital — view the original page ↗.

# F.A.Q.

Answers some of the most Frequently Asked Questions about the Nucleation Capital venture fund, syndicate, nuclear power and deep decarbonization.

# General Questions

What is Nucleation Capital?

Nucleation Capital is a venture capital firm that is investing into ventures enabling the energy transition. We do this by investing in exceptional private ventures developing innovative technologies primarily in the advanced nuclear and deep decarbonization sectors.

Who can invest in Nucleation?

Any investor who can establish accreditation by virtue of having investable assets of more than $1 million (not including the value of your primary residence) or income of $200,000 annually or $300,000 when combined with a spouse's income would be considered accredited and can invest in Nucleation Capital. Nucleation’s first fund, Fund I, accepts quarterly subscriptions ranging from $5,000 to $500,000 per quarter, for terms of 4 to 12 quarters, making participation in these sectors affordable for many more investors.

What is your specific fund thesis?

Nucleation Capital seeks to provide investors with a broadly diversified portfolio within the advanced nuclear and deep decarbonization sectors, which we believe are critical to enabling the world's transition to clean energy. We invest in a wide range of enabling technologies relating to nuclear fission, fusion, LENR and related areas, including supply and support ventures (advanced fuels and materials, nuclear AI, waste treatment and storage, integration and automation, etc.) that will support and accelerate sector growth. We believe that this area will supplant demand for fossil fuels in the coming years and will eventually succeed in growing into a $10 trillion industry. We seek to reduce risk by investing into leading ventures and doubling down on those ventures that are meeting their milestones and exceeding expectations.

Why advanced nuclear and not other types of clean energy?

We believe that innovations and technological breakthroughs are poised to make an already great technology (traditional light water nuclear reactors) even better. What is called "advanced nuclear" covers a rapidly emerging area with a wide range of competing approaches. We are a nuclear "native" fund, bringing industry experience and deep expertise to our investment analyses and decisions. In fact, we spend all of our time focused on nuclear and related technology and are participants in the industry, attending conferences, meeting players, speaking on panels and actively engaging full time. Unlike other investors, we don't just watch it from the outside and simultaneously invest in tons of other sectors. We know that nuclear is a complex area where small differences in design, fuel, and deployment strategy can have enormous implications. We think that, to succeed in providing maximum returns, investments in nuclear cannot be made without deep knowledge and up-to-date expertise. Thus, we aim to provide investors with a boutique and focused portfolio that gives them the best opportunity participate in the winners in this space—of which there will be many—rather than merely placing a larger bet on one or two primary reactor developers. With our focused, expert portfolio curation, we offer a risk-reduced way to enable investors to more fully diversify their portfolio’s into next-generation nuclear power and carbon management tech, without meaningful duplication with other funds.

As an investor, will I learn which companies you invest in?

Yes, we send confidential and fairly detailed investment reports on deals done during the prior quarter to all investor participating in that quarter. These reports don't contain company confidential information but we provide an explanation of what the company does and why we like it. These reports are typically sent out slightly delayed, so as to ensure that we don't preempt any announcements planned by the venture itself regarding their financing. We also post basic information about our investments later on our Portfolio page.

Why are you able to discuss your fund publicly when most VCs cannot?

Nucleation Capital is able to have a website that gives the public access to learn about and even apply to Fund I because we operate under a different SEC rule than most venture funds. Fund I is a 506(c) fund that requires all investors who are applying to join us to provide proof of accreditation. Most traditional venture capital funds are 506(b) funds and only accept capital from known qualified investors. They therefore are not required to get proof of accredition for every LP but this means that they are prohibited from making any kind of public solicitation.

How do your fees compare to other venture funds?

Nucleation Capital Fund I has lower fees than most other venture funds. While our standard fee structure of 2% annual management fee and 20% carried interest is comparable, we don't charge our ordinary fund expenses to our LPs, so this eliminates this large impact to LP capital. Additonally, we offer two types of discounts on our fees. Our investors get an automatic 25% discount off our our management fee of 2% with a subscription of 8 quarters or more.  We offer a further 25% discount off of our carried interest fee of 20% for subscriptions of $100,000 or more per quarter.  Because Nucleation Fund I is deployed on an advanced fintech platform that provides a cost-effective full-service back office support to us, we save on costs that allow us reduce our fees relative to traditional venture funds and we pass those savings on.

Will there be capital calls?

Nucleation’s investors fund their subscriptions on a regular quarterly basis. Angellist sends out a reminder notice at the end of the quarter to request the quarterly payment prior to the start of the next quarter. Management fees are deducted out of this capital by Angellist and Nucleation Capital pays all of our own fund expenses out of our earned management fee. So, unlike with most other funds, there are NO unscheduled capital calls in the ordinary course of the fund.

Are other VCs investing in nuclear?

Nucleation Capital was the first venture fund founded with a focus on the advanced nuclear sector. But a number of traditional venture capitalists have made occasional investments into nuclear ventures including Founders Fund, Union Square Ventures and Venrock, whose first foray into fusion was captured by venture capitalist Ray Rothrock in a notable article titled What's the big idea in 2016.  While more VCs have been willing to make an occasional investment into fusion over the last decade, fewer have historically been willing to invest in fission. Lately, with Nucleation's presence in this space and orders being placed by Google, Amazon, Meta for power from advanced fission reactors, the number of venture funds starting to cover nuclear has grown tremendously. Among those that are now active include DCVC, Sequoia Capital, Andreessen Horowitz, Prime Movers Lab, Alumni Ventures, Draper Associates, Boost VC and even MCJ.

Is Nucleation an Impact or concessionary fund?

Nucleation Capital is focused on investing into ventures enabling the energy transition, which include various climate solution technologies that help reduce, reuse or manage the impacts of carbon dioxide emissions. We recognize the urgency of reducing emissions and the power that addressing the climate crisis has on markets. So, while our thesis seeks to benefit from demand for low-carbon energy solutions, we nevertheless invest with a profit-first filter and select those ventures we believe most likely to succeed in bringing their technologies to market and generating enormous value. So, yes, our thesis is fully focused on addressing climate and thus directly or indirectly address 14 of the 17 Sustainable Development Goals (see #1, 3, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17) but we make these investments in order to generate exceptional returns for our investors.

When will investors see fund return and how is that calculated?

Like most other venture funds, Nucleation uses a ten year term. Ten years is standard because it takes many years for young ventures to build up enterprise value. However, if and when there is a liquidity event (an IPO, merger, SPAC, reverse merger or acquisition, etc.) we will seek to distribute those proceeds back to investors as soon as feasible.  Investors can expect to receive returns anytime between year 4 and year 10. As soon as any investment made during the subscription term achieves full liquidity and we are able to provide return, Nucleation (through its fund custodian) will distribute proceeds to investors. We first use the proceeds to repay all paid-in principal by the subscriber for the full term of their subscription. Thereafter, remaining net proceeds are divided between the subscriber and Nucleation Capital based upon the rate of carry applied.

Why do you call investors "Limited Partners" (LPs)?

Venture Capital avoids double taxation through a partnership structure between the fund managers, called General Partners (GPs) and the fund’s investors, called Limited Partners (LPs). This partnership structure protects LPs from incurring any liability for the operation of the fund yet enables both GPs and LPs to receive highly favorable tax treatment for returns on invested capital. This combination of limited liability with superior tax treatment is favored by professional venture capital firms and their investors.

How do I invest in Nucleation Capital?

Investors interested in Nucleation Fund I may apply directly through our online subscription portal at Angellist Ventures. There you get access to all our fund descriptive materials, fee information and legal docs. Angellist provides step-by-step instructions for selecting subscription terms, setting up a client account and submitting accreditation information. We're now accepting subscriptions ranging from $5,000 per quarter up to $500,000 per quarter. The whole process is paperless and can take as little as 20 minutes (a paper close, if preferred, can be arranged). Once you apply, Nucleation reviews your application, approves it and applies the appropriate discount. If you have trouble subscribing, please contact our customer support team at nucleation-support@angellist.com.  (For LPs interested in Fund II, our traditional venture fund, please indicate your interest here and we will get back to you.)

Can I use my IRA to invest in Fund I?

Yes, you can use a self-directed IRA to invest on Angellist, provided your custodian supports such investments. Angellist maintains a list of Supported IRA Custodians here. If your IRA custodian is not on this list, please confirm with your custodian that you are able to make IRA investments on Angellist. If not, you can contact Angellist's IRA support team to see if they can work within the custodian’s requirements. Alternatively, you can start a new self-direct IRA, such as Alto IRA, specifically for your investment into Nucleation Capital and get the benefits of using an IRA.

I'd like to invest but what if I need to cancel my subscription?

With Nucleation’s Fund I, we allow LPs to cancel their unfunded subscription for any reason. If you need to cancel, please contact our support team at nucleation-support@angellist.com and they will help you either pause or cancel your ongoing subscription.

# About Rolling Funds

What is a rolling fund?

Rolling funds are a type of venture capital fund with no pre-set required close date. The rolling fund utilizes a Master Series LLC structure and can continue to raise capital and deploy for as long as the General Partner wishes to continue it. The main difference of the rolling fund is that while it doesn't close by a set date, new investors get get access to deals done in the quarter in which they start and those going forward, but do not get access to any of the investments closed in prior quarters.  This structure is a type of "evergreen" fund which also rolls any capital not invested in the current quarter into the next quarter, increasing the amount available to be invested. Angellist Ventures introduced rolling funds in 2020 using a tech-enabled platform that also automates many aspects of the fund's administration, legal and accounting activities.  Most traditional venture funds are closed-end funds with a limited window in which to raise capital. Typically after an 18 month raise period, the fund cannot accept new investors but all investors who joined during the raise period can participate in every deal closed with the capital raised. After that, to raise more funds, the venture firm will have to start a new fund.

How does the subscription process work?

Investors wishing to participate in Nucleation’s Fund I apply online through our subscription portal and follow a fully-electronic process. The entire subscription and account set-up process can take as little as fifteen or twenty minutes. Anyone who needs accreditation will be shown the options for submitting proof of accreditation. Assuming the investor has access to suitable accreditation documents (or can provide contact info for their investment manager or CPA), accreditation can also happen very quickly as well. Thereafter, Nucleation Capital will be notified of your application and we will review it, approve it and apply any appropriate discount. We will send you back a messaging that confirms your acceptance into the fund. This whole process can take less than a few hours.

What documentation do I need to do to make an investment?

You need very minimal documentation. Those who are new to AngelList need to provide evidence of accreditation, which could be a bank statement, tax return or contact information for their investment manager. Angellist’s fraud prevention team follows “Know Your Customer” (KYC) protocols and may occasionally require investors to provide additional identification information (Legal Name, Address, Social Security Number).  When you apply, you have an opportunity to indicate how you found Nucleation Capital through a comment box. If you found us through our website or referral, please indicate that in your comment to us.

How are subscriptions funded?

Once your application is accepted, you will be guided through setting up a bank ACH or wire connection to fund your subscription. You then fund one quarter at a time in level installments, either prior to or during the quarter. Angellist sets up a cash account for you and your wired subscription funds are held in your own cash account at Angellist until the time that your investment is officially closed into our fund, typically around the time that we close an investment. Angellist does not provide any interest payments on cash held in your Angellist cash account, so most investors simply fund quarterly.

Do investors get exposure to all fund deals?

Yes, as a current subscriber, you get a *pro rata* allocation in all of Nucleation’s deals for each of your subscribed quarters. Subscribers do not get allocations to deals closed in prior quarters or after your subscription ends. In the event that uninvested capital from your last subscribed quarter rolls over to a subsequent quarter, you will receive an allocation in the deals invested in that next quarter as well, even if not specifically subscribed to that quarter.

What are other differences between rolling funds and traditional VC funds?

As a tech-enabled Rolling Fund, we can allow investors to participate at far lower capital levels. A typical traditional fund may have a multi-million dollar minimum. Our minimum starts at $5,000 per quarter and our maximum has grown to $500,000 per quarter. Our LPs fund on a level quarterly basis, making funding totally predictable. Traditional funds generally issue random capital calls for funds, giving you only a week or two to provide your capital. Traditional funds charge a standard fund expenses to their LPs, which can increase the number of capital calls and their total capital exposure. Nucleation's fund expenses are extremely low, so we don’t charge ordinary fund expenses to our LPs making Nucleation less costly than most other funds.

Nucleation’s rolling fund uses a simplified and secure subscription process, a confidential and automated accreditation process, a secure online account and investor portal with a dashboard to access fund information, reporting and messages, and a fund custodian that provides fund administration, accounting and customer support services. For those LPs who prefer it, we can also provide a more standard offline closing process.

What does it cost to use the AngelList service to subscribe to Nucleation?

There is no cost to our LPs to set up an account on the AngelList platform, to be accredited and join our fund. AngelList charges an Admin fee to all rolling funds for their use of the platform and most funds deduct this fee from LP principal. Nucleation does not do that. We pays this platform fee ourselves so this fee is not felt by our LPs, making Nucleation one of the best values in venture capital. (Note: Nucleation has covered this fee from the very beginning of our fund and continue to cover this fee through the 2x+ price increase that was rolled out by AngelList starting in 2025.

What is the tax treatment for the Nucleation Capital fund?

Venture funds, including Nucleation, are classified as partnerships for US federal income tax purposes. Investors are deemed "Limited Partners" (LPs), and treated as a partner of the fund. As a partnership, venture funds are not subject to paying US federal income tax at the entity level. Rather, each partner shares in all taxable events, typically spanning long-term income gains and/or losses, which roll down to the individual for inclusion in your income for each taxable year of the partnership.  You will receive a set of K1 forms from Angellist which you then share with your tax accountant, so they can include it in your tax report.

I have an issue with my subscription, what should I do?

Nucleation offer customer support for any issue that you have with your account. Please reach out to our online support team at nucleation-support@angellist.com for help on any matter pertaining to your account.

# About Syndications

What is a syndicate and how does it work?

An investment syndicate is a group of investors who come together to pool capital to invest in a particular venture. These syndicates use a special purpose vehicle (SPV) created specifically to hold the pooled equity shares. This makes it feasible and lower cost for investors who wish to invest in smaller amounts into an equity deal. The SPV also simplifies the process of closing a larger number of smaller investors for a venture. Occasionally, Nucleation will float a syndicate to allow our fund investors and our broader LP network to invest more capital into a particular venture. Learn more about the Nucleation Syndicate here.

Who can participate in a syndicate?

Any accredited investor can participate in a syndicate. Nucleation offers priority access to its fund LPs to syndicated allocations. Thereafter, Nucleation opens access to our network of Angellist LPs, investors who have joined the Nucleation Syndicate. There is no cost to join and participation is open to anyone (including most foreign investors except for those in China, Russia, North Korea and Hong Kong). We ask that only join if you are able to meet the US SEC accreditation requirements, whether you are a US citizen or a foreign national. Angellist does not typically require proof of accreditation for participation in a syndicate.

Can I just join the Nucleation Syndicate and not subscribe to the fund?

Yes. You won’t get access to every deal that Fund I invests in but you will likely get access to any deals that we syndicate. These deals are a one-time option to invest starting as low as $1,000. Access to these allocations are provided to Fund I LPs first, then they are opened up to our broader syndicate network. Deals tend to fill quickly and we don't always have an opportunity to circle back to remind people to participate. Unless you act quickly, an allocation is not guaranteed.

How does Nucleation decide whether or not to syndicate a deal?

Nucleation Capital’s current priority is in investing Fund I capital in the best deals available. We aim to invest as much capital from Fund I as we deem appropriate first. Then, if there is additional equity available, we may opt to syndicate as well. We only syndicate deals that we have diligenced. In our first two years, we were able to syndicate only about 1/3rd of our deals.

What is the cost for participation in a syndicate?

Participants in Nucleation’s syndicates do not pay any management fee on that participation but they do pay carried interest (“carry”). Carry for most syndicated deals is 20%. Carry is paid to us only when the deal successsfully returns proceeds to investors. Additionally, all syndicate participants share the formation costs of floating the syndicate. Fund I subscribers get a discount on syndicate carry for any additional capital they choose to put into the deal.

Will the names of those participating in syndications be disclosed publicly?

No. Both rolling fund subscribers and syndicate participants remain confidential and are not disclosed by Nucleation Capital. Cap tables in both cases only list Nucleation Capital. AngelList lists members of a syndicate who have participated in at least one investment on our syndicate page within the private AngelList community. Some investors may also choose to list their participation in the rolling fund or their syndicates as part of their AngelList bios.

Why haven’t I heard of investment opportunities like this before?

Syndications have been around a long time but technology has only recently made it really affordable and widely accessible. This means that it’s not just the top 1% of high net worth individuals (and professionals in the finance industry) who get access to invest in these kinds of deals. Nucleation Capital is working to build a network that broadens access to more qualified investors, especially those in engineering, energy, management and other non-finance professions.

What number of potential deals will be syndicated each quarter?

You can expect to see two or three syndicated deals per year. In contrast, we made an average of five fund investments in our first two years. For better deal access, consider fund participation.

# About Nuclear Energy

Where does our energy come from anyway?

All of our energy orginates from the Big Bang, which created stars and planets. Mankind has been fortunate that we’ve been gifted with special metals with the ability to fission (split). This phenomena (called nuclear power) produces the greatest amount of heat from the smallest amount of mass. Nuclear fusion (aka, the sun) drives other types of power that we have today.  We hope this graphic helps explain the origins of energy (click to enlarge).

Where can I learn more about nuclear energy?

There are dozens if not hundreds of governmental and authoritative groups that endeavor to help people learn the truth about nuclear energy. (Unfortunately, there are also many activist-oriented sites spreading inaccurate information which aim to make people fear nuclear.)

Authoritative sources include:

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The Department of Energy: Office of Nuclear Energy

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Other reliable sources we like include:**

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