All Questions

There have been some studies in the past on this topic like this one in from MIT. That being said, there has bee very little research on this topic and the number of participants in any of these studies are limited. So, in other-words, t...

There have been some studies in the past on this topic like this one in from MIT. That being said, there has bee very little research on this topic and the number of participants in any of these studies are limited. So, in other-words, there is no much information out there that is credible. 

The vast majority of brand name enduring VC firms were once 'micro' VCs as well. Sequoia's first fund was $3m. What's different today is that there is a Cambrian expansion of startups globally outside of the traditional hubs. As a result...

The vast majority of brand name enduring VC firms were once 'micro' VCs as well. Sequoia's first fund was $3m. What's different today is that there is a Cambrian expansion of startups globally outside of the traditional hubs. As a result, a lot of new VCs are being founded to meet the demand. Many of these new micro VCs, especially alumni of the VC Lab program, are founding their firms with the correct structure, strategy and principles to become the leading enduring brands in their sector or geography. 

DAOs are NOT beginning to play a bigger role in the venture eco-system as of this message, and it's unclear if they will ever become a mainstream financing alternative.  If a startup has a DAO on their cap-table, you may want to diligen...

DAOs are NOT beginning to play a bigger role in the venture eco-system as of this message, and it's unclear if they will ever become a mainstream financing alternative.  If a startup has a DAO on their cap-table, you may want to diligence why the startup had to take money from the DAO and if they received any special terms. 

As a VC, you should do your best to ensure that you get preferred equity. The reason that preferred is more valuable is because of special rights, that this class of stock receives and that's why it's more valuable. It's sub-optimal for ...

As a VC, you should do your best to ensure that you get preferred equity. The reason that preferred is more valuable is because of special rights, that this class of stock receives and that's why it's more valuable. It's sub-optimal for you to value the delta between common and preferred by $$ because there are other more important factors such as where your fund will be in the preference stack at the time of exit that is the difference between a return or a total loss.   My advice is for you to do whatever you can to retain the preferred warrants in this situation. 

It may be possible for you to get a loan for this matter. There are providers that have portfolio lines of credit products that may work in this situation. 

It may be possible for you to get a loan for this matter. There are providers that have portfolio lines of credit products that may work in this situation. 

There are a number of factors that affect capital call schedules, including if the fund is fully subscribed or not, that greatly affect one's capital call planing. As a result, there is no 'rule of thumb'. Please read this article for fu...

There are a number of factors that affect capital call schedules, including if the fund is fully subscribed or not, that greatly affect one's capital call planing. As a result, there is no 'rule of thumb'. Please read this article for further information on this topic:  https://govclab.com/2023/05/07/vc-capital-calls/

The founders and employees of a startup must have vesting schedules to secure investment from reputable VCs. 

The founders and employees of a startup must have vesting schedules to secure investment from reputable VCs. 

Startup valuations are typically set by the market of investors. If there is a high investor demand, the valuation of the startup is typically higher. If there is low investor demand, the valuation of the startup is lower. If there is no...

Startup valuations are typically set by the market of investors. If there is a high investor demand, the valuation of the startup is typically higher. If there is low investor demand, the valuation of the startup is lower. If there is no investor demand, the startup will not secure financing. 

You're defining every early stage startup in the world here when you say "pre-revenue startup with a high potential and high-risk profile". Startup valuations are typically set by the market of investors and not by some methodology or sp...

You're defining every early stage startup in the world here when you say "pre-revenue startup with a high potential and high-risk profile". Startup valuations are typically set by the market of investors and not by some methodology or spreadsheet. 

There are number of factors that are contributing to this phenomenon, including: • VC has number of different funds that invest at various stages. To make things more confusing, there are also a number of PE style investors that have ent...

There are number of factors that are contributing to this phenomenon, including: • VC has number of different funds that invest at various stages. To make things more confusing, there are also a number of PE style investors that have entered the asset class as late stage investors. The later stage VCs have raised mega funds in the $1b+ range and they have a very different strategy then new managers with $5m funds. Though the market correction primarily affected large legacy VCs, folks that are not well versed on the asset class like journalists, lump the whole market as whole.  • There are a number of old VCs that primarily invested in very developed eco-systems like Silicon Valley who don't have access to new sectors like emerging markets, under-represented founders etc... These folks struggle to see or take advantage of the vast opportunities. Therefore, when journalists ask their opinions, they often will respond with a statement like: 'the market can't support that many VCs'. • The VC asset class in general does not have a great reputation in areas such as diversity and ethics. However, during the market expansion, many of these issues were masked by the performance of VC portfolios.  That being said, there is a whole new breed of ethical venture capitalists who are abiding by the Mensarius Oath that are turning the VC asset class into a force for good in the world.  The biggest risk to venture capital are regulations that are not well thought out by the governing bodies like we see in Europe today, as well as global conflict. 

Read VC Lab's Limited Partner guide: https://govclab.com/the-venture-capitalists-guide-to-limited-partners/

Read VC Lab's Limited Partner guide: https://govclab.com/the-venture-capitalists-guide-to-limited-partners/

You may find this thread helpful. Since this is such a general question, it's very complicated to answer it. A biotech company will have different risks and opportunities vs SaaS. A pre-seed company will much riskier then a Series-B comp...

You may find this thread helpful. Since this is such a general question, it's very complicated to answer it. A biotech company will have different risks and opportunities vs SaaS. A pre-seed company will much riskier then a Series-B company. 

No there is not. Venture Capital has historically been a very opaque industry where it's very difficult to obtain information. 

No there is not. Venture Capital has historically been a very opaque industry where it's very difficult to obtain information. 

No, there is not a limit to the number of venture partners in a venture capital fund. However, the more VPs the more challenging it is for the GPs to manage them. As a result, it's sub-optimal to have a lot of VPs for new or emerging fir...

No, there is not a limit to the number of venture partners in a venture capital fund. However, the more VPs the more challenging it is for the GPs to manage them. As a result, it's sub-optimal to have a lot of VPs for new or emerging firms. 

Delaware formation with any reputable law firm can range from $50k - $100k+. Fund administration will typically range from $25k/year to $100k+ a year depending on a variety of factors related to the complexity of the setup. Both legal an...

Delaware formation with any reputable law firm can range from $50k - $100k+. Fund administration will typically range from $25k/year to $100k+ a year depending on a variety of factors related to the complexity of the setup. Both legal and administration costs are typically variable with traditional legacy vendors. Decile Launch offers turnkey formation and flat rate back office for top performing venture capital funds: https://decilegroup.com/decile-launch/

This is private information and we can not disclose this information. 

This is private information and we can not disclose this information. 

On a high level, first time managers need to be able to demonstrate to LPs that they: • Invested in amazing companies in Fund 1  • They subscribed their target fund size • They operated their fund to the highest standards

On a high level, first time managers need to be able to demonstrate to LPs that they: • Invested in amazing companies in Fund 1  • They subscribed their target fund size • They operated their fund to the highest standards

Decile Launch supports Delaware and Ontario as of this message but we are reviewing other domiciles for future expansion. Please review why Delaware is the domicile of choice for the vast majority of VC Firms here: https://govclab.com/20...

Decile Launch supports Delaware and Ontario as of this message but we are reviewing other domiciles for future expansion. Please review why Delaware is the domicile of choice for the vast majority of VC Firms here: https://govclab.com/2023/06/10/delaware-is-the-vc-domicile-of-choice/

We will not see major changes in the VC model. The traditional 2 and 20 model works really well for venture capital and LPs are slow to adapt to changes in structure. 

We will not see major changes in the VC model. The traditional 2 and 20 model works really well for venture capital and LPs are slow to adapt to changes in structure. 

The most effective way of sourcing LPs is via 1st or 2nd degree connections in their network. 

The most effective way of sourcing LPs is via 1st or 2nd degree connections in their network.