Risk
Considerations

Kapunda Ventures Fund I operates under an independent Solo GP model. The fund is entirely dependent on the continued involvement of Jeremy Atkin as General Partner. His incapacitation, death or permanent departure would pose a significant risk to the fund's ability to source deals, support portfolio companies and manage the portfolio to liquidity.

While a level of key person risk is unavoidable under a single GP model, Kapunda maintains a high-calibre Advisory Board and Investment Committee with deep experience across private equity, venture capital, investment banking and transaction advisory. In the event that the GP is incapacitated, this group will assume responsibility for managing the portfolio to liquidity and returning capital to LPs. Kapunda's Investment Committee provides ongoing oversight and a structured decision-making framework that reduces dependence on any single individual for investment decisions.

Managing a portfolio of 20–25 companies as a solo GP creates meaningful operational demands across deal sourcing, due diligence, execution, portfolio support and LP reporting. If not appropriately managed, there is a risk that bandwidth constraints limit the quality of investment decisions or portfolio support.

The fund’s design has been optimised to minimise administrative complexity: fixed cheque sizes eliminate bespoke negotiation, standardised investment terms reduce execution time, a nil reserve policy eliminates follow-on decision-making, and a governance model without board seats minimises ongoing administrative obligations. Kapunda also utilises the GXE fund management platform to automate compliance, reporting, capital calls, tax and audit processes. AI tools further support preliminary company research and meeting note capture.

Hard-tech startups typically take longer to reach commercial scale than software businesses. The timeline to traditional sources of liquidity — IPO or acquisition — has lengthened in recent years as the availability of growth capital in private markets has enabled startups to stay private for longer. Investors should expect that capital will be locked up for a significant period and should not commit capital they may need to access within the fund's 10-year life.

Kapunda intends to proactively pursue secondary sale opportunities — where early-stage investors sell their stakes to growth funds in parallel with later-stage funding rounds — to enable returns within the prescribed 10-year fund life. The GP has prior experience managing secondary sales in the Kapunda syndicate portfolio, including a partial secondary sale of Infravision shares at Series B valuation. This approach to proactive liquidity management is a core part of the fund's operating strategy.

While Kapunda’s prior syndicated investments have performed strongly on a marked-to-market basis and compare favourably with funds of similar vintage, only three have had liquidity events to date. Sea Forest listed on the ASX in November 2025 (2.2× MOIC), Bueno was acquired by a strategic buyer in January 2026 (1.4× MOIC with further earn-out upside), and some investors participated in a partial secondary sale of Infravision shares (3.5× MOIC). MOIC figures for the remaining portfolio are unrealised and are based on subsequent priced funding rounds.

This is not atypical given that all investments were made within the past five years, and hard-tech companies do not lend themselves to quick growth and sale cycles. Prospective LPs should evaluate the track record on the basis of portfolio quality and marked-to-market performance rather than distributed cash returns, and should be aware that Fund I returns may take the full 10-year fund life to fully materialise.

The ongoing conflict in the Middle East is driving persistent uncertainty in the global economy. A deterioration in global economic conditions could reduce the appetite of corporate customers to adopt new technologies, increase the cost of capital for later-stage funding rounds, and reduce the valuations at which portfolio companies can be sold or listed.

The recent conflict has awoken global investors to the importance of supply chain resiliency and will provide sustained tailwinds for innovation in the sectors where Kapunda specialises — energy, industrials and agriculture.

Portfolio companies will require follow-on funding from Series A investors and beyond. If later-stage funding options were to become unavailable — due to market conditions, a contraction in venture capital activity, or a deterioration in investor appetite for hard-tech — this would significantly constrain portfolio companies' ability to scale and Kapunda's ability to drive strong investment returns.

A number of later-stage Australian funds are currently active in Kapunda's target sectors, including Climate Tech Partners, Main Sequence, Virescent, Adamantem and Wollemi, all of which Kapunda has established relationships with. A core part of Kapunda's value proposition to portfolio companies is helping them manage the transition to well-capitalised US markets — where valuations are materially higher and capital is more abundant. This cross-market strategy reduces dependence on the domestic funding environment.

The past 24 months have seen significant shifts in policy settings globally, with environmental targets unwound in multiple jurisdictions. Many ‘climate-tech’ companies with business models reliant on tax incentives, carbon credits or corporate sustainability mandates have been adversely affected. A reversal of Australian energy or industrial policy could affect market conditions for certain portfolio companies.

Kapunda’s investment philosophy explicitly requires that every portfolio company be commercially viable independent of any environmental benefits it produces. We do not invest in companies whose business model depends on subsidies, carbon credits or sustainability-driven procurement. This discipline means the portfolio is structurally insulated from negative regulatory changes, while retaining the upside from any future positive policy shifts.