Eva Ados, ERShares
Turning Down $1 Billion in Flows to Protect Retail Investors
Eva Ados did something this year that fund companies almost never do in public. The week before an IPO event, her firm closed the door on more than a billion dollars of incoming money and put a 2 percent fee on large institutional creation orders. Turning away flow is turning away revenue. She did it anyway, because the money showing up that week was there to take the gain and leave, and the people who would have paid for it were the retail shareholders who had been holding the whole time.
Eva is Partner, Chief Operating Officer, and Chief Investment Strategist at ERShares. She joined me on Behind the Ticker to walk through that call and the structure that made it possible.
The VC Lens
ERShares was built on research by founder Dr. Joel Schulman, a tenured professor who spent decades studying how venture capitalists pick winners and then tried to run that process on public companies. The result is an 18 attribute framework the firm calls the entrepreneur factor. Some of it is quantitative. A lot of it is not. Leadership, culture, competitive position, all converted into numbers. Schulman used it to buy Nvidia in 2005, when it was a five dollar stock making chips for car cameras, and got into most of what later became the Magnificent Seven early.
That premise is the entire firm. By the time a company is a household name, most of the value creation already happened. Find them before that.
The Problem That Created the Fund
Run a VC screen on public markets long enough and you walk into an uncomfortable fact. The value is not in public markets anymore, or at least not as much of it. Companies stay private far longer than they used to, and if you are not accredited you cannot touch any of it. Eva's point is that the existing workarounds do not really solve this for a normal investor. Closed end funds, interval funds, high minimums, lockups, shares that do not trade near NAV. None of that works for someone putting in a few hundred dollars.
XOVR was the answer. Roughly 85 percent public equities following the firm's entrepreneur index, and a sleeve of private company holdings alongside it. Today that sleeve is SpaceX and Rocket Lab, and the team is actively hunting the next one.
The Plumbing Nobody Asks About
I have launched ETFs and never had to think about most of what Eva described. She was candid that none of it was planned. Each piece came out of a problem.
The first version used an SPV that charged real fees and was not especially transparent, so they moved to a zero zero structure with no management fee and no carry. That change did more than cut cost. It let them reprice the private position quickly and repeatedly. Then conviction on the private side outgrew the standard 15 percent illiquidity cap, so they built a board approved liquidity arrangement to go past it safely.
The shareholder protection plan came last, and it came from getting burned. In January, arbitrage money came in right before a repricing and diluted existing holders. Eva was direct about it. They were not expecting it. What they built afterward is what they reached for the next time large flow showed up: reprice often, close the door when the money is opportunistic, and make the institutional creation order expensive enough that the trade stops being worth doing.
What She Is Watching in AI
Eva also has a clean way to separate companies actually monetizing AI from companies that just talk about it. Her tell is revenue per employee. Nvidia sits around 5.5 million per employee. The S&P 500 average is roughly 650,000. That is close to ten times. Astera Labs, which the firm owned before it joined the Nasdaq 100, runs near 6 million.
With hyperscaler capital spending going from roughly 410 billion in 2025 toward 700 to 750 billion this year, the obvious question is where the return on all that shows up. Her answer was the most useful line in the conversation. Not in an index. Some companies capture that spend on the front end, some on the back end, and most do not capture it at all. Buying the theme buys you all three.
Worth a listen, especially the part about turning down the billion. Ask yourself how many managers would.
Full Transcript
4,500 wordsMachine transcribed from Brad Roth's conversation with Eva Ados, ERShares, with speakers identified automatically. Timestamps link to that moment on YouTube. Lightly cleaned, otherwise unedited.
Welcome to Behind the Ticker, the podcast where we go beyond the symbol and into the strategy. I'm Brad Roth, founder and chief investment officer at Thor Funds. And in each episode, I sit down with ETF managers, CIOs, and industry leaders to break down how these funds are actually built, how they behave in real markets, and how advisors use them in real portfolios. Most people just see a ticker symbol, but we know much more goes on behind the ticker.
Hey, Ava, welcome to the show. Thank you for having me.
So if you could, why don't you give everybody a bit about your background? You're a Fulbright Scholar out of Europe. You started your career as a financial auditor over at PwC in India. I also spent a little bit of time at PwC, so we have that in common. And you worked across techs and startup companies. You got your MBA, and now your partner, chief operating officer and investment strategist at ER Share. So can you walk us through that impressive journey?
Yes. Thank you for asking. So it's not PwC in India. It was in Europe. But my first, I had an undergrad in economics and business. And then I joined PwC right after my undergrad. I did not like it. Although, thanks to it, I can study companies now and analyze them. But I hated the job. I don't know about you. I did not like it. I don't know if it was because I finished my undergrad earlier than normal at three years. I was the youngest. The PwC and all my friends were still studying. But it was very bureaucratic for me. And that's when I realized I want to be in innovation and entrepreneurship, companies that are less bureaucratic. And they dream about the future and they build the future.
Read the full transcript (49 more sections)Collapse transcript
Yeah. I had a similar experience, only I was on the tax side. And I knew after one tax season that I never wanted to be in tax again.
I was an auditor. So it was like, the least creative job you can have. So it was a no-go for me. But that was very helpful because now, everything you do in life, even the things that might not be, of interest to you, it comes in handy in the future. So, I'm very grateful for that.
So I ask everybody outside of work, when you're not behind the desk or you and I were just talking, you're going to be behind the camera this morning or later this afternoon, I should say, what do you like to do when you're not working?
So my favorite thing in the world, if I could, that would be traveling. I love meeting new people and new cultures. I speak four languages. So that would be it. But I don't have that much time. Um, so the, the, what I like to do, um, is swim a lot. I was a competitive swimmer growing up. So swimming is the only time in my day, um, that I have no distractions. So it's not just exercise for me. It's like meditative. That's when I get my best ideas. I think about, uh, my work also personal anything. So this is the only time of day that I get to myself to think. So I would say this and
Spending time with friends and family. Yeah. I love it. So let's talk about ER shares. The firm is founded by Dr. Joel Schulman with, more than 30 years of academic research behind it came out of Babson college in Hartford for listeners who haven't come across ER shares before. Can you give us like a high level of the firm and Joel's entrepreneur factor framework? Yes. So, um,
Joel was, uh, a professor and still is, but he, he's a tenured professor, but he does this part-time, uh, just for $1 a year. Um, but the, his whole research, he's, he spends time and decades actually studying how VCs invest and how successful VCs invest and what makes a company, an entrepreneurial, what we call an entrepreneurial company successful long-term. And so he, he studied this and then he wanted to apply this framework to the public markets. Um, so he, um, he combined, he brought what we call the VC lens, um, because we studied public markets like VCs, uh, he brought the VC lens to the public market and, and that's, um, an extensive academic research where our, um, where our model is based on, um, that, uh, that has about,
We have 18 attributes. Now we're adding a couple more, um, that are both qualitative and quantitative. So because VCs study the team and how, uh, the founders and how, uh, the company is growing the culture, there's a lot of qualitative, um, characteristics that we analyze. We obviously convert them into numbers, but he came up with this proprietary, um, model. We call it the VC lens, otherwise known as the entrepreneur factor that has these 18 attributes. And this is how we screen all companies, uh, public companies, but lately we added also the private sleeve to this.
Yeah. And so Joel was an early identifier of what became like the mag seven. And, that was a real credibility marker for him. What does the framework or this VC lens or the framework look for that gets you into these names before maybe consensus catches up?
Yes. I love this question. So, um, he was to your point, he, um, he got into NVIDIA in 2005 when it was a $5 stock back then they were doing, making chips, uh, for the cameras, um, for, uh, chips for the cameras, uh, of the cars. So, um, and then he got into all magnificent seven or fangs very early. Um, so his whole model is to find these companies very early, like VCs do because by the time they become household names, much of the value creation has already happened. So this, this is the beauty of being a VC in the private market. And this is the beauty that he wanted to bring that characteristic to the public market. So for people to be able to
Access these companies very early. Now, lately, we'll speak about this. We added the private sleeve to this because we saw a change. We'll get back to this, a change in the market, how much of the value creation now happens before the IPO. So because we noticed that our VC framework brought us back to where we, the, the thesis originated in the private market. That's, that's who we study. We study VCs, we study how entrepreneurs become successful and which entrepreneurs become successful. And we wanted to bring that thesis to the public market for everyone to have access to these great
Opportunities. Yeah, for sure. I definitely want to talk about that. But one of the things that's interesting to me that I want to go a little bit deeper on is that companies are staying private a lot longer than they used to, right? look at SpaceX, all the AI companies, a lot of the value is, you'd argue has been created. Can you talk about that trend and what public investors are actually missing by only owning post IPO exposure?
Yes. Um, I love the question and it's the reason why we created XOVR, the crossover ETF. That's exactly the reason. So, um, over the last few years, not a few anymore, but you've seen a big shift in the market. We have, this year is going to be a record year for IPOs, um, big names. So much of this value creation now happens before the companies go public. And that's a big shift and retail investors in particular, if you're not an accredited investor, if you don't have over 1 million of investable income, like you cannot access this. And by the time they get to the market, it's already not late, but much of this value creation has already occurred. And because our whole model was to get into these companies
Early. And now we see that shift to the market. We're like, is there a way to make it more accessible to retail investors? And there is closed in funds out there. There's interval funds out there, but in some cases you need to be an accredited investor. Um, there's high minimums, there's lockups. Um, they don't trade that near NAV. And so we realized that the current structures, the current, um, funds that are out there might not be the most efficient for a simple person who wants to invest a thousand bucks, like a hundred, but we have, uh, we have investors in XOVR that might have like $50 in XOVR, you know? Um, so that's the beauty that anyone can be part of these companies that were
Traditionally reserved only for institutional or accredited investors and people were missing out.
Yeah. let's, you touched on some of the highlights of XOVR there, which is the ER shares private public crossover ETF. This was kind of relaunched under the structure in August of, uh, 2024. So if you were to give kind of like your elevator pitch on what is XOVR and what problems
Does it solve for investors? Could you do it? Yes, of course. I love this. Uh, it is, um, so it's an ETF. So it trades like an ETF. Uh, it has a 75 basis points management fee, which is, uh, kind of inexpensive for the, for the work we do because we don't charge more for all the private equity work we do, which is a lot of work. Um, and so it trades like an ETF, but it provides access, uh, to both private and public companies. And we were the first to do it. XOVR was the first ever crossover ETF that allowed, um, exposure to private companies are, and, people know us because of SpaceX. SpaceX was, was a great company to own, but that's not
XOVR. XOVR is more than SpaceX. XOVR is supposed to allow retail investors to get access to these, what we deem category leaders before they become accessible to the market or before they become household names. So even our public companies, and we can mention some, some examples later, even these in some cases, and I have two examples that stand out. Um, we got into them before they became household names and before a lot of appreciation happened. So we're trying to find the category leaders very early. That's what XOVR is. It brings you, uh, the VC lens. It's a, it's an ETF that follows a VC lens. So you get access to what we deem, uh, an entrepreneurial company, a company that will become a category leader in the future, like a magnificent seven,
But we try to get into them very early. So let's, let's talk a little bit about the structure,
Right? XOVR is this private public crossover. Most of the portfolio is in, it's called the ER 30TR Public Equity Foundation. And there's a, there's a measured sleeve of select private company exposure in that. So how does that combination actually come together in one, in one ETF without getting
Too nerdy on the legal side? So, um, 85% of the ETF, um, plus is following the ER 30TR index. That's the entrepreneur 30 total return index. And this is the result of what I, uh, I mentioned earlier, the entrepreneur factor or what a VC lens, uh, comes up with. So we take the universe of many companies, then we put that universe into that factor, which is automated, right? And I mentioned before it's qualitative and quantitative characteristics. Um, and then it screens them and then it ranks them, it ranks them in, um, based on how entrepreneurial they are, meaning how, um, are they going to be a category leader? Do they have a competitive advantage? Are they growing with a high rate? Uh, how is their leadership?
Is that, a unique leader that's going to be Elon Musk, for example? Uh, so this is how this framework works. And so, um, um, the result of this is the entrepreneur, uh, 30 total return index, and that has outperformed most indices over the last two decades. And so before that, before the relaunch, uh, XOVR used to be called ENTR and it followed a completely, not completely different, but a different methodology. Um, and so we realized that their entrepreneur 30 TR index was beating, um, ENTR and we said, okay, now we have to convert. We need to focus on the ER 30 TR index and then add the private sleep because we mentioned, we saw that change in the market and getting to these companies early, but that's
About 15%. With SpaceX, we were able to exceed this because we had the liquidity arrangement, which was one of the innovations we made. Um, but XOVR is 85% the index and 15% private companies.
So let's talk about some of the innovations that were made in XOVR and made it like very structurally different. So the crossover ETF format itself is something different. Private company exposure inside of an ETF wrapper is different. The zero, zero SPV structure is very different. The funds liquidity arrangement and the shareholder protection plan. Like these are very different from, I run a couple of ETFs. We don't even have to think about these things. So can you walk us through those and why each one matters?
Yes. Um, so they didn't come from the beginning, by the way. Um, so we started the first innovation was to come up with this structure, the crossover structure, private and public. And then initially, and we admit that it wasn't the most, um, efficient structure, right? So the innovations were a result of the problems we, we encountered. And again, we were the first one. So this is uncharted waters. No one has ever done this before. Uh, we come out to the market and we're trying to figure out what's the most efficient way. Right? So, um, the first innovation was the ETF. Uh, the second innovation was that, uh, initially we were in an inefficient SPV, um, that was charging a lot of fees and we, we, it was not as transparent. So we converted that to a zero, zero SPV, which has no management
And no carry. And it's very transparent. So you can reprise SpaceX very, for example, very easily. So that was the first innovation. Then, um, we realized that people want more SpaceX and we had the stronger, stronger conviction. Um, and so we added to it, we exceeded the 15%, uh, SEC limit by creating a liquidity arrangement that let us, um, um, um, get, um, exceed that 15% in a safe way. We could, it was safe. It was board approved. Um, um, so we were able to do that. And then the last innovation was, um, the shareholder protection plan. And that was very important because, um, um, in, in Q2, um, XOVR appreciated by about 27.5% in Q2. And much of that appreciation was because of the space exposition. Um, and then in, in the month of, and actually the space exposition
Was, uh, is about now $370 million in the XOVR. And that was about, uh, uh, 180, uh, million of appreciation in Q2 alone for SpaceX. And then June, um, XOVR was up, I think 5.5%, around 5%. When the SMP was down 2.7%. Again, much of this appreciation was, I think 75% of the appreciation was because of SpaceX, um, that provided about 85 million to XOVR. So the, the way we would have never done this before without the shareholder protection plan. And I can give you two examples. One is XOVR in January where, um, we had ARBs come in and one, we had an inefficient SPV and two, we had, um, uh, billions come in just before our repricing event and, and SpaceX went to 2% of,
Of the ETF. So we lost, uh, we got diluted and, that was the first time it happened to us. So we were not expecting it. And then, um, and then with Cathie Wood's RKK has happened many times during the year that 6 billion come in, came in even on the day of the IPO and got all that appreciation. So we tried very hard to come up with a shareholder protection plan. We worked with our council and our providers to come up with an innovative way to make sure we give as much appreciation as we can to our long-term investors or retail investors, for example. Um, and that happened with, um, and that's multiple steps in that shareholder plan. Uh, number one, we repriced
SpaceX multiple times and our zero zero SPV allowed us to do that multiple times in, in Q2. Uh, number two, uh, we said no to more than a billion dollars of AUM flows that would have been obviously revenue for your shares, but we prioritized, um, the appreciation of the fund for the retail investors. So we, we closed our doors the week before, uh, the IPO and people couldn't come in. And then we also applied the 2%, um, redemption fee to big create creation orders. And see use obviously, uh, cause you have your ETFs. So big orders from institutions that wanted to take that appreciation away from our long-term investors. And so that first of all, um, made sure that fewer of them, them would want to
Come in. And also we had people sell because they didn't want to have this 2%. So we tried all these part, all these were, um, super important for XOVR to have the appreciation it had, uh, in Q2.
Interesting. So one of the pieces you've touched on a couple of times, but I don't think people, I want, I want advisors who are listening to this to realize the importance is the zero zero SPV piece, right? Um, in traditional private market investing, investors face management fees and incentive fees in a private vehicle on top of the fund's own fees. So why did you guys decide to structure it
Differently and make it zero zero? Um, okay. So for the space exposition specifically, um, that was the best way for us to structure it. The most transparent way there was no, no extra fees. It was very transparent. Um, but that doesn't mean that every time is the same, right? So it might be another purchase, uh, down the road where we see, uh, it makes no sense to have zero zero and the upfront fees are, um, higher than let's say two and 20. So it's that specific, um, deal that we did. It made more sense to have a zero zero. It also allowed us to reprice multiple times to have a transparent vehicle, but there is, it's not like a hundred percent rule, right? There might be cases
In the future and, private equity people do that. So that, that does not make that much sense. So it's also economic. So there's many factors you have to take into consideration.
So let's talk about Q2 specifically, uh, XOVR returned 27.45% in Q2 of 2026, 5.3 in June alone. AUM grew from 400 to 2.2 billion during the quarter. Uh, it's a 5.5 X increase. So let's just talk, what was it like inside the doors of the firm as like all this was going on over the last
Quarter? Um, we, uh, so we expected it didn't come. So the money did, unlike January, uh, when we had like seven trades of ARBs come in and out, this time was very organic. So it was people who come in and, I speak with many people, many retail investors with smaller ones who wanted to be part of this, uh, long-term people who see XOVR as a long-term hold as something they want to have in their portfolio to allow them to get access to, to companies private and public very early. So, um, it came naturally. So it was not sudden. It was something that this time we knew, we knew from, uh, historic data that we had with XOVR, what works and what doesn't. Um, and we saw the interest, um,
A lot of people were interested in this for the long-term because they saw that, um, we, we tried to, to help the retail. So our whole thesis and mission, I think it, it, it shows that XOVR is not just, we're not prioritizing your shares, your shares revenue. We always put retail investor first and that will be always be the mission of XOVR. And so I think many people understand this.
Yeah. So we talked about this, the SpaceX trade maybe enough, but you've been very clear that XOVR is not just a SpaceX trade. Like, how do you talk about the fund's identity beyond, that one position that has kind of consumed, uh, the media and everything
Over the last handful of months? Uh, SpaceX was, uh, one of the companies that we have the strongest conviction. Um, and so, and we believe this is going to be a long-term hold for XOVR. We're not selling. Um, it's a very big percentage of the ETF. It's about 17 to 18% right now of XOVR is in SpaceX. And if that appreciates that we'll get higher too. Um, so we're not selling, we have long-term conviction. We think it's going to be the best magnificent seven. And we, um, we believe that, um, before we made the purchase, the private purchase. So we had very strong conviction from the beginning, but XOVR is not just SpaceX and it's all definitely not a space ETF. We only have SpaceX and Rocket Lab right now in the ETF. Uh, it's more about this. So we're currently trying to find
Out what is the next category leader that we want to add where that's private. We we're trying to get into all these category leaders very early. So it's a bigger thesis than SpaceX. SpaceX was a very, a great case study and there couldn't be a better company, uh, to launch XOVR with. So we are very happy. It was, it works perfect. And, um, I, I honestly believe, um, SpaceX will be the leader when it comes to space. So we'll be the category leader. That's exactly. XOVR is meant to find
These companies like SpaceX very early. Well, let's talk about kind of this, um, the AI space and everything that's going on right now. Maybe zoom out a little bit. Q2 showed us a lot about how companies are actually monetizing AI. You've been focused on revenue per employee as a signal for where AI is really improving business efficiency or not. So what's
The data telling you right now? So revenue per employee, and I mentioned before the, the framework that we use, the entrepreneur factor is proprietary, but this is one extra statistic, for example, that we're looking at other than the 18 attributes. Um, I think it's a very telling statistic, uh, because it shows you, and people have been saying like companies invest too much in AI, where does all this money go? But if you look at this statistic, it's very telling. For example, um, Nvidia has about, I think four, 5.5 million of revenue per employee. Now you compare this to the S&P 500 average, which is about 650,000 per employee. That's 10, almost 10 times X. Another company that, that I, really like, um, and we got into it very early before it joined the
Nasdaq 100, before it became a household name is Astera Labs. That's another company that I, again, revenue per employee, it's 6 million, uh, per employee. So I think AI shows in some companies, there's many companies that speak about AI or they use AI and you can't really see this in their financials, but in some cases, um, there are some companies that are doing a great job of, um, first of being part of the, for example, Astera Labs is, um, a front end AI capture. So anytime a hyperscaler invests in AI, Astera Labs is one of the companies that gets benefited first. So it gets that money.
So looking at these, I think is very, I think Astera Labs will be a category leader, uh, just like AppLove and another company we found very early. So, um, I think AI is here and, um, it's, it, if you look at their financials, it's easy to identify which company does a good job with it and which one doesn't. Let's talk about just briefly a little bit more about the hyperscaler
AI CapEx, right? It's going from 410 billion in 2025 to be 700 to 750 billion in 2026. From your VC lens, where do you think the returns on all that spending are actually going to show up?
Um, they don't show up in an index. So it's not that every AI company is benefiting. Um, I think it's, it's a, it's very selective. So, we don't want to have an AI basket. We get into that AI basket immediately. Um, no, you look at each company and how they benefit. And some, some of them is like a front end AI capture, like Astera Labs that, every time a hyperscaler invests that, that benefits or AppLove is a backend AI capture. Uh, the way they use AI, the way they grow their platform now globally, the, their action platform, the way they, they optimize their advertising is based on AI. So looking at these, um, from a thematic point of view, uh, thematic analysis,
But also in the financials, like the revenue per employee that we mentioned before, I think can guide you into which, which company actually benefits from all this investment.
Well, I really, really appreciate you spending some time with me today, but before I let you go, where can people learn more about ER shares and XOVR?
So, uh, on our website, er shares.com, we also are very active on social, uh, X or LinkedIn, or even my personal Instagram. Um, and we try to have, um, a lot of FAQs on the website. Every time people ask us something, we upload an FAQ, we send a lot of press releases, uh, and definitely subscribe to our newsletter. That's, uh, uh, we send about a newsletter every two weeks.
So it's very informative. Well, again, thanks so much for spending some time with me. Thank you for having me, Brad.
Thank you.
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