All Questions

Hurdle rates and net return multiple are very uncommon in Venture Capital funds. 

Hurdle rates and net return multiple are very uncommon in Venture Capital funds. 

Yes, that’s what we mean.

Yes, that’s what we mean.

Everyone has to be on the same schedule.

Everyone has to be on the same schedule.

One of the most effective activate weak connectors is to have them make a connection to another connector. 

One of the most effective activate weak connectors is to have them make a connection to another connector. 

you should have low - medium - high scenarios and ideally in the medium you should have a realistic pathway to ~5x

you should have low - medium - high scenarios and ideally in the medium you should have a realistic pathway to ~5x

It’s common for confidants to become LPs. Ideally, you speak with confidants that are HNW individuals.

It’s common for confidants to become LPs. Ideally, you speak with confidants that are HNW individuals.

For SAFE rounds, in many cases the SAFE itself is the term sheet. For priced rounds, NVCA model documents include a term sheet https://nvca.org/model-legal-documents/ . The more standard deal documents are, the more streamlined and lower...

For SAFE rounds, in many cases the SAFE itself is the term sheet. For priced rounds, NVCA model documents include a term sheet https://nvca.org/model-legal-documents/ . The more standard deal documents are, the more streamlined and lower cost the legal process will be. References "Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist" and "The Business of Venture Capital: The Art of Raising a Fund, Structuring Investments, Portfolio Management, and Exits" provide detail on all aspects of term sheets.

Exits were possible as early as the Series A for total success stories through secondary transactions when the overall startup market was frothy. Frothy times are gone for the time being. Assume that you need to hold until the company i...

Exits were possible as early as the Series A for total success stories through secondary transactions when the overall startup market was frothy. Frothy times are gone for the time being. Assume that you need to hold until the company itself exits, which will be 8 to 12 years out for a startup studio. Lemons will ripen first, as they saying goes, so you may have some 2x to 3x returns in 3 to 5 years. Startup studios take a loooooong time to get any liquidity, since they are so early in the formation and funding process.

If 95%+ of investments are in dollars, keep it in dollars and talk with your bank about their capabilities on this matter.

If 95%+ of investments are in dollars, keep it in dollars and talk with your bank about their capabilities on this matter.

Case by case. But, in general, you want to handle the relationship because the VP is part time and they may not be there long term.

Case by case. But, in general, you want to handle the relationship because the VP is part time and they may not be there long term.

It's generally not appropriate to ask if fund x is investing, but it is appropriate to ask if others are investing. However, most good founders will not disclose for the same reason you wouldn't disclose your LPs.

It's generally not appropriate to ask if fund x is investing, but it is appropriate to ask if others are investing. However, most good founders will not disclose for the same reason you wouldn't disclose your LPs.

Everything is defined in the LPA. As a rule, you don’t want any one LP to own 25% or greater, otherwise they control the fund. You could build in custom protections. You can read a sample and simple LPA with the Cornerstone for some exa...

Everything is defined in the LPA. As a rule, you don’t want any one LP to own 25% or greater, otherwise they control the fund. You could build in custom protections. You can read a sample and simple LPA with the Cornerstone for some examples on how the control provisions work with the Majority in Interest of the Limited Partners.

You can't use deals done through SPVs as track record unless you sourced and led the syndicate. 

You can't use deals done through SPVs as track record unless you sourced and led the syndicate. 

Once LPs have invested in the fund, you will need to provide reports on your companies. Before that, you can show select companies in your data room to investors who have signed a letter of intent.

Once LPs have invested in the fund, you will need to provide reports on your companies. Before that, you can show select companies in your data room to investors who have signed a letter of intent.

Yes. The Firm is the brand. The fund can be called something else if you want.

Yes. The Firm is the brand. The fund can be called something else if you want.

You need to apply a very consistent rule to which of your previous investments are warehoused into the fund, you can't pick and choose.

You need to apply a very consistent rule to which of your previous investments are warehoused into the fund, you can't pick and choose.

Yes, Venture Partners can also be LPs. However, if they make investment decisions for the fund, that may affect their limited partner status. 

Yes, Venture Partners can also be LPs. However, if they make investment decisions for the fund, that may affect their limited partner status. 

Your costs will be higher because you will need local counsel and probably local tax advice (in addition to counsel for your fund). Legal agreements may be differently drafted, require different procedures, etc. Your LPs may also face si...

Your costs will be higher because you will need local counsel and probably local tax advice (in addition to counsel for your fund). Legal agreements may be differently drafted, require different procedures, etc. Your LPs may also face similar challenges. 

No. Send them a PACT after they have indicated interest.

No. Send them a PACT after they have indicated interest.

We don’t have a template affirmation agreement. Everyone does this differently, but in general most people start with a verbal agreement first.

We don’t have a template affirmation agreement. Everyone does this differently, but in general most people start with a verbal agreement first.