All Questions

You will not be able to warehouse the assets. If you’re going to warehouse, the assets must be startup equity.

You will not be able to warehouse the assets. If you’re going to warehouse, the assets must be startup equity.

You can warehouse a deal of any size that is related to your Thesis. If they are too small, then it may appear strange to have in your fund. Unless your fund has a follow on strategy, then don’t plan to do a follow on, as this would be o...

You can warehouse a deal of any size that is related to your Thesis. If they are too small, then it may appear strange to have in your fund. Unless your fund has a follow on strategy, then don’t plan to do a follow on, as this would be off strategy.

Generally speaking, for AML, all that is truly required is the full legal name and birthday - for KYC more details and identification documents are typically required.  If a prospective portfolio company wants to be thorough about dilig...

Generally speaking, for AML, all that is truly required is the full legal name and birthday - for KYC more details and identification documents are typically required.  If a prospective portfolio company wants to be thorough about diligence, they may ask if a Fund has any LPs in certain categories. You may want to ask what KYC/AML service they are using, and that will tell you what they really “need” versus that they “want.”  Fund managers are obligated to maintain confidentiality with respect to the identities of limited partners - and similarly, certain agreements of the Fund itself are also usually confidential (please check the agreements, as they will vary from jurisdiction to jurisdiction). You may wish to research what are the actual legal obligations for the portfolio company's jurisdiction - for example, for a Delaware domiciled fund, there is no such thing as a formal register of shareholders.  Formation documents (such as those filed with the Delaware Secretary of State), and information required to run KYC on the ultimate beneficial owners of the a fund's entities (such as the ManCo or General Partner), are sometimes requested, and would not be too unusual. 

It’s normal for anchors to ask for preferential terms, which you can manage in a side letter. That being said, anchors tend to delay closings and are very difficult to work with. So, to qualify them before wasting time with them, send th...

It’s normal for anchors to ask for preferential terms, which you can manage in a side letter. That being said, anchors tend to delay closings and are very difficult to work with. So, to qualify them before wasting time with them, send them a PACT first. You can offer them the ability to buy some of the GP as well, and several VC Lab alumni have done this and our template docs make this process pretty straight forward. The key is that you prioritize people who will make your first closing now, and this LP is probably not going to make it.

I think it’s better that you don’t because you can’t really control if someone forwards it and the newsletter is usually a broader audience. We like to send the deck to super qualified leads that came from introductions. Then, for people...

I think it’s better that you don’t because you can’t really control if someone forwards it and the newsletter is usually a broader audience. We like to send the deck to super qualified leads that came from introductions. Then, for people that looked at the deck, we think they should be in a different stage in your pipeline in your crm with a completely different set of follow-up messages.

That is bad advice from a previous age when such things mattered. The world has changed, and the advice is therefore wrong. Is it possible to get corporate backing? Yes, but it takes 18+ months and is very slow and painful. Will a VC p...

That is bad advice from a previous age when such things mattered. The world has changed, and the advice is therefore wrong. Is it possible to get corporate backing? Yes, but it takes 18+ months and is very slow and painful. Will a VC possibly invest in other fund? Maybe, but very unlikely. Less than 2% chance. Most are prohibited by the LPA to invest in other funds. Following this advice would be a wild goose chase that could take years.

It's ok to do so if you want. Just make sure the site doesn't mention the fund or the thesis. You can mention the Firm however (the name of the ManCo) and a very high level description of what the Firm does.

It's ok to do so if you want. Just make sure the site doesn't mention the fund or the thesis. You can mention the Firm however (the name of the ManCo) and a very high level description of what the Firm does.

Founder Institute created For Progress, which you can check out here: https://fi.co/progress

Founder Institute created For Progress, which you can check out here: https://fi.co/progress

Your best ROI per unit of time spent for your first closing is high net worth individuals. The others are better for your 2nd close or Fund 2 because they typically don't invest in new managers.

Your best ROI per unit of time spent for your first closing is high net worth individuals. The others are better for your 2nd close or Fund 2 because they typically don't invest in new managers.

No, avoid mentioning LPs or their comittment in your deck.

No, avoid mentioning LPs or their comittment in your deck.

You can share the deck if they request it

You can share the deck if they request it

A fund manager probably needs to spend 20 hours per top Rockstar company, spread over a few months.

A fund manager probably needs to spend 20 hours per top Rockstar company, spread over a few months.

It’s virtually impossible/very difficult for you to transfer an interest that you don’t own 100%.

It’s virtually impossible/very difficult for you to transfer an interest that you don’t own 100%.

Legal fees can be an organizational expenses and paid by LPs. It can cost a lot more for legal work depending on the setup etc… You should only work with law firms that specialize in VC fund formations.

Legal fees can be an organizational expenses and paid by LPs. It can cost a lot more for legal work depending on the setup etc… You should only work with law firms that specialize in VC fund formations.

You need to use numbers, preferably exits or markups. If you can't get these metrics, then look for revenue increases or some other clear indication of value creation and growth.

You need to use numbers, preferably exits or markups. If you can't get these metrics, then look for revenue increases or some other clear indication of value creation and growth.

LPs are not flexible in terms of changing portfolio construction.

LPs are not flexible in terms of changing portfolio construction.

It’s really difficult to roll in an SPV into a fund, because the SPV is a fund. 

It’s really difficult to roll in an SPV into a fund, because the SPV is a fund. 

In Delaware, if the fund is <=$10m then it’s 250 LPs. If the fund is >$10m is 99 LPs

In Delaware, if the fund is <=$10m then it’s 250 LPs. If the fund is >$10m is 99 LPs

You’re not going to be able to honor these terms because they are dependent on the company. What if the company doesn’t want them to lead? These are definitely NOT standard terms.

You’re not going to be able to honor these terms because they are dependent on the company. What if the company doesn’t want them to lead? These are definitely NOT standard terms.

Avoid anchors in Fund 1s and avoid favorable terms for any LP

Avoid anchors in Fund 1s and avoid favorable terms for any LP