SecProbe.io

CORRESP
1
filename1.htm

April
16, 2024

VIA
EDGAR
==========
David P. Mathews
Division of Investment Management
Securities and Exchange Commission

100 F Street, N.E.
Washington, DC 20549

RE: Connetic
                                         Ventures Fund; File Nos. 333-274892 and 811-23906

Dear
Mr. Mathews,

On
October 6, 2023, Connetic Ventures Fund (the “Fund” or the “Registrant”) filed a registration statement
under the Securities Act of 1933 on Form N-2 (the “Registration Statement”). On November 13, 2023, you provided written
comments regarding the Registration Statement. Please find below your comments and the Registrant’s responses, which the
Registrant has authorized us to make on behalf of the Registrant.

GENERAL
COMMENTS

1.         We note that the Registration Statement is missing information and exhibits and contains numerous sections that indicate that
they will be added, completed, or updated by amendment. We may have additional comments on such portions when you complete them
in a pre-effective amendment, as well as on disclosures made in response to this letter, on supplemental information provided,
or on exhibits filed with any pre-effective amendment.

The
Registrant acknowledges your comment.

2.         Where
a comment is made with regard to disclosure in one location, it is applicable to all similar disclosures appearing elsewhere in
the Registration Statement. Please make all conforming changes.

The
Registrant will make all conforming changes as requested.

3.         Please
advise whether the Fund intends to seek initially, or subsequently, any application(s) for exemptive relief (e.g., multi-class
or co-investment relief) or no-action relief in connection with the Registration Statement, and if so, the anticipated timing
of any applications or requests for relief.

The
Registrant intends to seek multi-class exemptive relief. The Registrant anticipates submitting the request for multi-class exemptive
relief on or about October 1, 2024.

4.         Please
tell us if you have presented or will present any “test the waters” materials to potential investors in connection
with this offering. If so, please provide us with copies of such materials.

The
Registrant has not and does not plan to present any “test the waters” materials to potential investors in connection
with this offering other than a “red herring” prospectus in accordance with SEC guidance on pre-effective communications.

5.        Please
confirm that the Fund does not intend to issue debt securities or preferred shares within a year from the Registration Statement's
effective date. If the Fund plans to issue debt securities or preferred shares within a year from the effectiveness of the Registration
Statement, please include additional disclosures of risks to stockholders in the event of a preferred shares or debt offering.
Please also consider the impact have on other disclosures, such as the Fee Table, and revise throughout as appropriate.

The
Registrant does not intend to issue debt securities or preferred shares.

6.         Please
confirm in correspondence to the staff that the Fund does not intend to invest more than 15% of its net assets in hedge funds,
private equity funds, or other private funds that are excluded from the definition of investment company by Section 3(c)(1) or
Section 3(c)(7) of the 1940 Act.

The
Registrant confirms it does not intend to invest more than 15% of its net assets in hedge funds, private equity funds, or other
private funds.

7.        Please
add disclosure to the Prospectus regarding conflicts of interest that may arise in relation to the allocation of investment opportunities
between the Fund and other clients of the Adviser or of its affiliates, and also conflicts of interest as may arise in relation
to the Adviser’s selection of investments, use of techniques or use of technologies that have the potential effect of increasing
the compensation or earnings of the Adviser or of affiliates of the Adviser.

The
Fund is the only client of the Adviser and its affiliates, so there is no conflict of interest in allocating investment opportunities.
Employees of the Adviser also do not invest alongside the Fund in the portfolio companies. The Adviser does not believe there
are any conflicts that may arise in relation to its selection of investments, use of techniques or use of technologies that have
the potential effect of increasing the compensation or earnings of the Adviser or of affiliates of the Adviser.

8.         Regarding
references in the Prospectus (Pages 8 and 25) to the Adviser’s use of proprietary technologies named “Wendal”
and “Team Print” to automate certain aspects of its due diligence process, please enhance the Prospectus’ description
of the Fund’s investment objective and strategies, and the discussion of risks associated with an investment in the Fund,
as follows:

a.       Provide
additional details as to (i) how Wendal and TeamPrint were developed for application to an investment selection process, including
a discussion of signal to noise and interpretability or explainability factors; (ii) how the two technologies are used in combination
by the Adviser; (iii) the types of data inputs entered and the types of signals or outputs achieved; (iv) the basis for the assertion
that Wendal’s output is unbiased and what you mean by such term; (v) how TeamPrint’s data is validated for accuracy
and reliability, and by whom and what specific outputs are considered accurate and reliable; and (vi) any limitations on use of
the technologies and the extent to which the portfolio managers will override or alter recommendations from Wendal and/or TeamPrint
based on their independent discretion or judgment; and

The
Registrant has added the disclosure requested.

 i. Wendal
                                         and TeamPrint were developed internally by the Adviser and its affiliates over the last
                                         four years to be used in the due diligence process of selecting Portfolio Companies.
                                         The Adviser also had input from an external development company and an industrial psychology
                                         consulting company in developing Wendal and TeamPrint. The Adviser has a team of data
                                         scientists and researchers that work on data integrity and apply various data science
                                         and machine learning techniques to flag or eliminate potential “noise” in
                                         the system. The Adviser documents its processes and provides technical manuals to support
                                         interpretability and explainability for the Wendal and the TeamPrint assessment.

 ii. Wendal
                                         is an online, web-based platform where principals of companies who would like to be considered
                                         for investment by the Fund apply for consideration. The application includes information
                                         about more than 100 variables regarding the company and its leadership, and TeamPrint
                                         is used for one type of assessment within the Wendal platform that groups individuals
                                         into four personality profiles used in industrial psychology (e.g., leadership, patience,
                                         extroversion, and attention to detail). The variables include financial data, factual
                                         data (e.g., type of entity such as LLC vs corporation), and personality trait data. Wendal
                                         then provides each potential Portfolio Company a score and corresponding star rating,
                                         which the Adviser uses to sort and prioritize investment opportunities; however, Wendal
                                         does not do specific due diligence on the viability of the business idea of a Portfolio
                                         Company. That analysis is done by the portfolio management team as part of the next step
                                         in the investment process.

 iii. Wendal
                                         collects a host of data inputs, including behavioral profiles and psychology factors
                                         on the principals and team, as well as financial and company metrics that allow Wendal
                                         to assess company performance and generate a score and corresponding star rating. The
                                         behavioral profiles and psychology factors as assessed through questions on the application
                                         that are designed to elicit responses that can be analyzed from an industrial psychology
                                         perspective to assess the strengths and weaknesses of a management team. The financial
                                         and company metrics are questions regarding the company’s revenue, growth rates,
                                         capital raised, and ownership structure.

 iv. Wendal
                                         is designed to be unbiased in that the information it gathers gets a consistent response
                                         from people regardless of gender, race, or age. The technology has been tested for fairness
                                         in its assessments across gender, race, and age in a study conducted by a third-party
                                         industrial psychology consulting firm.

 v. In
                                         industrial psychology, accuracy and reliability are generally assessed by the consistency
                                         of measurement. The Adviser followed an industry accepted structured process for establishing
                                         scale development to obtain internal consistencies among factors analyzed by TeamPrint.
                                         According to the industrial psychology consulting company that was used in the development
                                         of TeamPrint and a host of other experts, an adequate level of alpha for assessments
                                         is 0.70 or above, the coefficient alpha for each of our 4 main factors were Leadership
                                         (0.92), Social (0.88), Technical (0.84), and Reaction (0.79) where each factor produces
                                         more than adequate levels of internal reliability.

 vi. Two
                                         important limitations of the technology are that Wendal requires startups to apply before
                                         it can conduct any analysis, so the pool of potential Portfolio Companies from this source
                                         is self-nominated. In addition, Wendal does not do specific due diligence on the viability
                                         of the business idea of a Portfolio Company. We believe that our investment team and
                                         their deep industry experience add the perfect complement to Wendal’s behavioral
                                         science and company health due diligence and use their experience to assess the business
                                         idea of a Portfolio Company and to ultimately make the determination whether to invest
                                         in a particular Portfolio Company.

b.       Add
additional disclosure of risks associated with the use of these technologies or other automation technologies or artificial intelligence
in connection with managing the Fund’s investment portfolio, including but not limited to a discussion of the potential
negative impacts of (i) incomplete, erroneous or limited data; (ii) potential for changes in relationships among data sets that
may result in less useful outcomes or recommendations; and (iii) potential for loss due to coding or logic errors, malware or
other potential technology degradation associated with use of the technologies.

The
Registrant has added the following risk disclosure.

Use
of Technology. Using technology like Wendal and TeamPrint may limit the pool of potential Portfolio Companies in that
the analysis performed is only done on companies that apply. The accuracy and usefulness of Wendal and TeamPrint’s recommendations
depend significantly on the quality of the data input. Incomplete, erroneous, or limited data could lead to incomplete analyses
or incorrect recommendations, thereby affecting the Fund’s decision-making process. The Adviser’s heavy reliance on
Wendal and TeamPrint for screening potential investments may limit the Fund’s ability to adjust its strategies quickly in
response to new information that the technologies do not incorporate. Like any digital platform, Wendal and TeamPrint face the
risk of coding or logic errors that could affect functionality. Additionally, the risk of unauthorized access, malware, or other
technological issues could not only disrupt the Adviser’s operations but also lead to loss of proprietary information or
negatively impact the Fund’s operations.

Algorithmic
and Model Risk: Wendal and TeamPrint rely on algorithms and models that may contain inherent biases despite efforts to
ensure neutrality, or they may not fully account for all the nuances in human behavior and market conditions. This could potentially
lead to over- or under-weighting certain factors in the investment selection process. Further, the relationships among data sets
can evolve over time, resulting from market dynamics, economic factors, or changes in law or regulation. Such changes might render
previous algorithms and assessments less effective, potentially leading to suboptimal investment decisions. The testing and validation
of Wendal and TeamPrint are performed based on historical data and may not accurately predict future outcomes. There is a risk
that the technologies might not perform as expected in different or changing market conditions.

PROSPECTUS

Cover
page

9.         In
the seventh bullet point risk on the Cover Page (Page 5), concerning return of capital, please also briefly disclose that (i)
any capital returned to shareholders through a distribution will be distributed after payment of fees and expenses, and (ii) and
the tax impact of any such return of capital.

The
Registrant has revised the disclosure as requested.

10.       In
the eighth bullet pointed risk on the Cover Page (Page 5), and elsewhere in the Prospectus, the disclosure states that the Fund
may pay distributions from sources unrelated to Fund performance, including from offering proceeds. Please confirm in correspondence
to the staff that the Board has approved the use of offering proceeds for this purpose.

The
Registrant confirms that the Board of Trustees of the Registrant has approved the use of offering proceeds for this purpose.

Prospectus
Summary

11.       Under
the heading “Investment Objective and Strategies” (Pages 8-9), or elsewhere in the Prospectus, as applicable, and
to aid investors’ understanding of the scope and implementation of the Fund’s investment objectives:

a.       Please
describe or provide examples in the Summary, or cross-reference to disclosure elsewhere in the Prospectus, the types and characteristics
of companies that the Adviser deems to be “private, venture capital investments,” and “private, operating growth
companies,” “early-stage companies” and “private venture-backed companies;”

The
Registrant has revised the disclosure as requested.

b.       Explain
the types of “equity-linked” securities in which the Fund i