AV Foundation · Board Decision Paper · Sept 9, 2026
For board approvalThe question
Every investment AVF holds today is a diversified fund: an index fund, or a managed basket of many holdings. Nothing in any pool is a single company. That is policy, not accident. The IPS requires each holding to be index-based (Section IV, criterion 3), and our investment beliefs call concentration "a bet we are not paid to make."
The question for the board is whether that stays absolute, or whether AVF may hold a single name under stated conditions.
Nothing about a specific company is being decided here. This is the rule. Once the rule exists, choosing which name fills the slot is an investment decision under it, the same way we already choose which index fund fills a sleeve.
Why it is coming up
A candidate surfaced that we would want to own if we were permitted to. There will be others. Right now each one arrives as its own argument about whether to break policy. That is the wrong shape. A board should rule on the category once and let staff work inside it, not re-litigate first principles every time a name comes up.
Precedent
The pattern exists in the IPS, and it works. Section VI, the digital-asset policy, permits a crypto index ETF that the general selection criteria would otherwise exclude. It does not argue the merits of any holding. It sets four boundaries and stops:
The current holding is named in a schedule kept outside the IPS, so it can be replaced without a board vote as long as it still meets the boundaries. That is the whole model. What follows applies it to single names.
The recommendation
| Boundary | Proposed |
|---|---|
| Eligible security | US-listed, publicly traded, audited, with real trading volume |
| Where | High Risk pool only. Not Cash Reserve, Low, or Medium |
| Cap, per name | 5% of the pool |
| Cap, all single names combined | 10% of the pool |
| Who selects | Investment oversight, under the IPS criteria, recorded in the schedule |
| Conflicts | Disclosed to the board and recorded before the position is opened |
| Review | Every quarterly investment review, like any other holding |
| Donor funds | Available to individual funds already eligible for the higher-risk election |
Everything in that table answers one objection: a single name is riskier than a fund, so the policy makes the position small, visible, and reversible. Caps make it small. Quarterly review makes it visible. Listed and liquid makes it reversible.
The one real risk
A single company can do two things a fund cannot: fall alone, and stop paying overnight. A diversified fund absorbs one company's bad quarter. A single name is the bad quarter. No amount of volatility math changes that, because the risk is not how much the price moves in normal weather. It is the possibility of a permanent loss in one line, or a dividend that disappears without warning.
That is what the caps are for. They are a concentration limit, not a volatility limit. A 5% position that goes to zero costs the pool 5%. That is a loss the pool can carry. The limit is set where the answer to "what if we are simply wrong about this company" is survivable.
What "no" looks like
Nothing breaks. The pools stay as designed, and every future candidate of this kind gets declined on policy without needing a discussion. That is a defensible answer. The cost is that AVF gives up a category of holding permanently, including cases where we have unusually good information. The benefit is a rule that never has to be argued again.
If the board prefers "no," it should say so as a decision rather than leave it as an unexamined default, because the default is currently doing real work.
The vote
Motion for the board
Amend the IPS to permit single-name holdings in the High Risk pool, subject to the boundaries in the table above.
Two consequential edits follow, and they are mechanical:
A US-listed, publicly traded company with audited financial statements, a public operating history, and ample trading liquidity. No private or non-traded securities. No leveraged or derivative-based substitutes.
The High Risk pool only. Not offered in Cash Reserve, Low, or Medium.
5% of the pool per holding, and 10% of the pool for all single-name and digital-asset holdings combined, rebalanced back to the cap on the normal schedule.
A return-enhancing and diversifying sleeve. It is modeled conservatively and is not relied upon to meet the pool's return objective.
Delegated to investment oversight under the Section IV criteria, recorded in the Investment Implementation Schedule, and reviewed at the next quarterly review. Adding or replacing a holding does not require an IPS amendment, provided it meets the eligibility above.
Where AVF, AV, or a member of the LX community holds a relationship with the company or its management, the relationship is disclosed to the board and recorded before the position is established, and reviewed at each quarterly review.
Available to individual funds meeting the existing higher-risk election conditions, subject to the same caps and a Risk Disclosure Agreement naming concentration risk specifically.
The first candidate, if the answer is yes
TRIN · Trinity Capital
At 5% of the High Risk pool, funded by trimming the two stock funds pro-rata. Gold, crypto, and cash untouched.
Sequence, so the two do not get tangled: the board rules on the policy. Then investment oversight selects the holding under it and records it. If the board would rather handle both in one sitting, that works, but they should be two motions.