Like most closed-end funds, Invictus Capital’s Hyperion Fund does not facilitate direct liquidation. The fund's underlying assets are not liquid (primarily equity), which means that an on-demand redemption function cannot be provided.
However, token holders can enter and exit their position at will. Traditional venture capital requires investors to lock-up their capital for up to 10 years. IHF tokens are free to trade 24/7 with other market participants, providing token holders with the freedom of instant liquidity - even though it is possible for it to trade at a discount to NAV. The buy-and-burn function assists with liquidity and the transfer of value to token holders.
The Hyperion fund is unique in that it already provides liquidity for its token holders on an ongoing basis, and therefore token holders can exit their positions as they see fit. This is not the case for traditional VCs whereby liquidity can only be provided at the end of the fund’s life. This essentially allows for Hyperion to operate in perpetuity. Liquidity events within the fund, such as the sale of shares via an IPO or buyout, can be reinvested in further startup companies. IHF token holders can then choose whether or not they see the Hyperion portfolio allocation as a good long term investment or not, and restructure accordingly.
Currently there is no end date planned for the Hyperion fund and Invictus Capital will seek to make reinvestments into new cutting edge start-ups as liquidity events allow. As the fund grows in assets under management, so too will the buy-and-burn distributions for its token holders, as 50% of all realized gains over $30m will be allocated towards buying back tokens from secondary markets where it trades under the token NAV.