All Questions

Don’t do this for your first fund. The ROI is not worth it.

Don’t do this for your first fund. The ROI is not worth it.

You should include succesful angel investments that are also on thesis. 

You should include succesful angel investments that are also on thesis. 

You don’t need to be accredited to manage a fund.

You don’t need to be accredited to manage a fund.

Limited Partners need to be accredited in the US by the US standard for a fund domiciled in Delaware.

Limited Partners need to be accredited in the US by the US standard for a fund domiciled in Delaware.

For Fund 1, you should pick one approach. It’s hard enough to sell one or the other (FoF is a much harder sell BTW). The LPA will need to updated by counsel if you want to go with this approach.

For Fund 1, you should pick one approach. It’s hard enough to sell one or the other (FoF is a much harder sell BTW). The LPA will need to updated by counsel if you want to go with this approach.

This sounds like you will be working for them :slightly_smiling_face: They are asking you to manage their fund. If you want to run your own firm, consider politely declining them.

This sounds like you will be working for them :slightly_smiling_face: They are asking you to manage their fund. If you want to run your own firm, consider politely declining them.

Yeah, they can be. It depends on the company and their responsibility. Venture partners can serve various roles: https://govclab.com/2022/03/10/venture-share/

Yeah, they can be. It depends on the company and their responsibility. Venture partners can serve various roles: https://govclab.com/2022/03/10/venture-share/

You may be able to list yourself as Managing Partner (and ensure that there is no "contact us" anywhere) - however please review the following carefully with respect to general solicitation: https://govclab.com/2022/06/28/general-solici...

You may be able to list yourself as Managing Partner (and ensure that there is no "contact us" anywhere) - however please review the following carefully with respect to general solicitation: https://govclab.com/2022/06/28/general-solicitation/

The amount is not as important in warehouse deals, what’s more important is markups. Let’s say that you invested 10k in warehouse deal, but now that position is up 30x. That’s a meaningful markup for your LPs that they would get at cost....

The amount is not as important in warehouse deals, what’s more important is markups. Let’s say that you invested 10k in warehouse deal, but now that position is up 30x. That’s a meaningful markup for your LPs that they would get at cost. And, if you can follow into deal or have pro-rata, that’s even better.  You are going to need to set clean and consistent rules about the deals you warehouse because you can’t cherry-pick. So, for example, you can say, all deals in 2022 will get moved into the fund. You CAN NOT warehouse an SPV.

The answer is No. That being said, depending on your strategy, you may want to put together a set of LP dinners where the LPs can meet the companies. But just set the expectations straight about the rules of engagement.

The answer is No. That being said, depending on your strategy, you may want to put together a set of LP dinners where the LPs can meet the companies. But just set the expectations straight about the rules of engagement.

Here’s a cleaner incentive: minimum check size will go up in the 2nd closing

Here’s a cleaner incentive: minimum check size will go up in the 2nd closing

It’s money paid in by LPs

It’s money paid in by LPs

Cap adjusted projection

Cap adjusted projection

Most jurisdictions have limits on the number of Limited Partners, and they also have accreditation standards for investing LPs. As a rule of thumb, you don't want a lot of LPs to manage, so you want to try and limit the number to 50, may...

Most jurisdictions have limits on the number of Limited Partners, and they also have accreditation standards for investing LPs. As a rule of thumb, you don't want a lot of LPs to manage, so you want to try and limit the number to 50, maybe 75. Now, you may want some strategic investors at the $50K level, so you make the first close minimum $50K, let in a few strategic LPs, and then raise the minimum to $100K or $250K.

An advisory board member is a Venture Partner. We have created standards around compensation, which you can find here: https://govclab.com/2022/03/10/venture-share/ It can be useful to have a VP that helps with fundraising but you can’...

An advisory board member is a Venture Partner. We have created standards around compensation, which you can find here: https://govclab.com/2022/03/10/venture-share/ It can be useful to have a VP that helps with fundraising but you can’t make the carry transactional. So for example - you can specify a quota of intros in exchange for carry. However, our agreement supports vesting and you can use that as mechanism to ensure performance.

Yes, however there are several issues with having Limited partners be Venture Partners. First, Limited Partners will loose various protections because the Venture Partners make decisions for the fund. Second, this creates a challenge for...

Yes, however there are several issues with having Limited partners be Venture Partners. First, Limited Partners will loose various protections because the Venture Partners make decisions for the fund. Second, this creates a challenge for the GP in situations where the VP doesn't deliver on expectations because it's difficult to fire a Venture Partner because they are also a Limited Partner. Review the Venture Share agreement for details on VP compensation: https://govclab.com/venture-share/