Moonfare and the Democratization of Private Equity

Founded in 2016, Moonfare headquartered in Europe, was a pioneer in the “democratization” of private equity investments. Historically, private equity was accessible only to institutional investors like pension funds, endowments, sovereign wealth funds, and large family offices. However, as personal wealth has grown among broader segments of the population, along with advancements in technology and a slowdown in traditional fundraising, figuring out how to facilitate individual investors access to private equity has become increasingly attractive. Moonfare was among the first to enable individual investors to access a range of private equity funds by developing proprietary technology with fully digitalized onboarding and investment processes. Initially, Moonfare’s model facilitated direct access to funds for high-net-worth individuals and family offices. However, with the broader alternative industry facing pressure to find solutions for fundraising from "retail" investors, competitive pressures evolved rapidly. In this context, Moonfare considered creating an investment vehicle with an unprecedented minimum investment of €10,000. Given that retail investors' participation in private equity was still a relatively new trend, there was no established playbook for effectively managing this investor base. The Moonfare team had to address several considerations: the unit economics of onboarding retail investors, the increased risk of default, and the challenge of both attracting and retaining these investors. On the flip side, tapping into smaller check sizes could strengthen Moonfare’s position as a leader in the industry and unlock the potential of a large, untapped investor base. The key question remained: what would be the ideal investor segment to target, and which product would be best to launch?