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Venture Capital Funds can quality for certain exemptions from registering with the SEC as an "Investment Company". Section 3(c)(1) of the Investment Company Act of 1940 provides exemptions for: • private funds with 100 or fewer investors...

Venture Capital Funds can quality for certain exemptions from registering with the SEC as an "Investment Company". Section 3(c)(1) of the Investment Company Act of 1940 provides exemptions for: • private funds with 100 or fewer investors; • venture capital funds with fewer than 250 investors (under $10M and meeting other requirements); Counting the proper number of investors can be a complex and nuanced process due to ultimate beneficial ownership and look-through for entities (and other factors), etc. - therefore we strongly recommend consulting an experienced fund attorney for assistance WELL BEFORE a fund may run up against either of these limits. 

1. Login to fi.co 2. Select the session # from the Program Sessions timeline 3. Write an answer in the text box of a deliverable 4. Select 'Save Your Work' After you have saved your work in each text box, the sprint will be completed an...

1. Login to fi.co 2. Select the session # from the Program Sessions timeline 3. Write an answer in the text box of a deliverable 4. Select 'Save Your Work' After you have saved your work in each text box, the sprint will be completed and submitted. Important: Keep a backup of your work in word or google document. 

Please review this article that specifies the Venture Capital management fee model. During the investment period, a $5m fund on a sliding scale management fee schedule generates ~$150,000 in yearly revenue from fees. This can typically s...

Please review this article that specifies the Venture Capital management fee model. During the investment period, a $5m fund on a sliding scale management fee schedule generates ~$150,000 in yearly revenue from fees. This can typically support 1 full time Managing Partner and one part time partner until they raise Fund 2.

Decile Group has developed this Valuation Policy for the VC Lab community. The policy has been adopted by the majority of Decile Partner firms. 

Decile Group has developed this Valuation Policy for the VC Lab community. The policy has been adopted by the majority of Decile Partner firms. 

The LP needs to speak with their CPA about QSBS and you really should avoid providing advice here. QSBS is complicated and some LPs may not qualify. Providing LPs with tax advice creates a lot of problems for you. 

The LP needs to speak with their CPA about QSBS and you really should avoid providing advice here. QSBS is complicated and some LPs may not qualify. Providing LPs with tax advice creates a lot of problems for you. 

GP - LP events are very effective and are foundational to a succesful fundraising strategy. In order to maximize the effectiveness of your LP events: 1.  Invite LPs that have signed PACTs or have closed 2. Ask the LPs that have signed P...

GP - LP events are very effective and are foundational to a succesful fundraising strategy. In order to maximize the effectiveness of your LP events: 1.  Invite LPs that have signed PACTs or have closed 2. Ask the LPs that have signed PACTs to invite a friend Typically, intimate events convert significantly better. But the events must be curated correctly to ensure that prospective LPs receive an exclusive experience.

No. We do not recommend parallel funds for new and emerging managers. They introduce an enormous amount of complexity as well as additional costs. 

No. We do not recommend parallel funds for new and emerging managers. They introduce an enormous amount of complexity as well as additional costs. 

Management Companies are setup as a Distribution Focus, Hybrid or Operating Company. You can find more information here: https://vcl.to/ManCo-strategy [Image] The majority of new and emerging mangers will setup their Management Compani...

Management Companies are setup as a Distribution Focus, Hybrid or Operating Company. You can find more information here: https://vcl.to/ManCo-strategy [Image] The majority of new and emerging mangers will setup their Management Companies as Distribution Focus. In this case, the healthcare plan maybe setup at the individual level, but not at the company level. If the Management Company is setup as an Operating Company, which is more typical for larger enduring VC firms, then the healthcare plan will be setup at the company level.

Accrual base accounting is the preferred method for VC Funds.

Accrual base accounting is the preferred method for VC Funds.

One thing you could do is to write a small check from the fund and offer the rest via SPV to your LPs as a perk. You can use Decile SPV for this because it’s built for this use case and is managed in hub. Important: Capital lines of cre...

One thing you could do is to write a small check from the fund and offer the rest via SPV to your LPs as a perk. You can use Decile SPV for this because it’s built for this use case and is managed in hub. Important: Capital lines of credit from your bank are NOT an option in this scenario because you have not closed the fund. Banks are not going to provide your a line of credit due to the risk and it's not cost effective. 

The Win-Loss ratio is the percent of investments that you were able to win. Many of the best investments are competitive and it's common for VCs to lose some of those deals unless they provide a strong value add.

The Win-Loss ratio is the percent of investments that you were able to win. Many of the best investments are competitive and it's common for VCs to lose some of those deals unless they provide a strong value add.

For initial evaluation you could request a non-NDA version of materials.  If you initiate serious diligence of the deal you can evaluate signing an NDA or bringing on a 3rd party expert to evaluate the technology under NDA. For an initia...

For initial evaluation you could request a non-NDA version of materials.  If you initiate serious diligence of the deal you can evaluate signing an NDA or bringing on a 3rd party expert to evaluate the technology under NDA. For an initial review, a basic Google or PubMed search will often provide a surprising number of products, publications and patents in a space - the (non NDA question) can be "how are you substantially better, and poised to dominate this market?"

Decile Hub is free for participants of the VC Lab accelerator. In 2024, Decile Hub will be opened up to the public. The product will continue have a robust free offering, and there will also be premium SaaS package for some additional fe...

Decile Hub is free for participants of the VC Lab accelerator. In 2024, Decile Hub will be opened up to the public. The product will continue have a robust free offering, and there will also be premium SaaS package for some additional features, including an AI Advisor. The exact pricing will be announced at a future date. 

Decile Partners provides a unified back office service for venture capital firms. This includes multiple functions such as legal, accounting, tax, and audit, which are typically provided by multiple external vendors. Decile Partners also...

Decile Partners provides a unified back office service for venture capital firms. This includes multiple functions such as legal, accounting, tax, and audit, which are typically provided by multiple external vendors. Decile Partners also includes access to Decile Hub, a venture platform that integrates various tools needed by venture capital firms, such as CRM, data rooms, digital signing, deal tracking, accounting, and more.  The different specific offerings of Decile Partners are based on Playbooks, scripts that Decile Partners and member firms engage in to complete activities. Below are the Decile Partner Playbooks. PLAYBOOKS FUNDRAISINGThe Fundraising Playbooks cover various stages of the fundraising process, from finding and pitching potential limited partners (LPs) to addressing issues and unique requirements raised by LPs. They also offer guidance on closing the fund and handling problematic LPs. - Finding LPs: Secure 10 or more qualified limited partner meetings per week. - Pitching LPs: Improve the pitch to secure >1 yes per 10 pitches with pitch practice and exercises. - Closing LPs: Best practices to convert LPs that sign PACTs but are not Signing LPAs. - Institutional Diligence: Assist the GP to prepare for institutional due diligence by a Deal Room with the appropriate materials. - Capital Call Issues: Help the GP get LPs that signed LPAs to wire if they are facing issues or if the deadline has passed. - LP Closing Issues: Address feedback or issues from LPs on terms, etc. - Unique LP Requirements: Address inquiries from LPs about Crypto Investment or investing from an IRA, etc. - Problematic LPs: Handle complaints or problems raised by LPs. - Fund Closing: Successfully close the fund when the required commitments are met. - Decile Hub: Provide assistance with LP onboarding. OPERATIONSThe Operations Playbooks focus on monitoring the health, compliance, and responsiveness of the general partners (GPs) and the fund. It includes playbooks related to fund strategy, structure changes, special deals, and maintaining regular responsiveness and engagement. - Fund Strategy Issue: Address and resolve issues related to the fund's strategy. - Structure Changes: Accommodate requests for structural changes to the LPA for normal operations. - Special Deals: Manage GP(s) personal investments or other actions that may involve conflicts of interest or fiduciary duty issues. - Upgrade Agreements: Complete semi-annual agreement upgrades for VC Lab. - Decile Hub: Provide assistance to GPs with utilizing Decile Hub features. - [Monthly] Responsiveness: Ensure GPs respond to inquiries within 3 business days. - [Monthly] General Solicitation: Check GP(s) posting on social media and event attendance for information about the fund. REPORTINGThe Reporting Playbooks outline the tasks related to producing monthly newsletters and quarterly reports for each fund, with specific attention to LP engagement and content focused on portfolio and deal pipeline. - [Monthly] LP Newsletter: Prepare the monthly newsletter for LPs. - [Quarterly] LP Reporting: Prepare the quarterly or annual report for LPs. - LP Engagement: Address issues related to LPs not opening reports or newsletters. - Portfolio Velocity and Deal Pipeline: Create newsletter content focused on portfolio and deal pipeline updates. TEAMThe Team Playbooks deal with team changes and additions within the venture capital firm, emphasizing that such changes should be rare and well-considered. - Team Additions: Add a Partner, Venture Partner, Intern, etc., to the team. - Team Changes: Remove or change the role of a Partner, Venture Partner, Intern, etc., within the team. FINANCEThe Finance Playbooks cover the various financial aspects of managing the fund, including accounting, expenses, management fees, capital calls, distributions, year-end filings, forecasting, and addressing any KYC or AML issues. - Accounting Books and Records: Produce and explain financials to LPs. - Expenses: Manage and allocate expenses correctly. - Management Fees: Calculate and transfer management fees correctly. - Capital Calls: Fully calculate and issue a capital call correctly. - Distributions: Fully calculate and make a distribution correctly. - Decile Hub Accounting: Operate Firm Admin and its tools/features within Decile Hub. - Year-end Filings and Tax Process: Manage year-end communication to LPs regarding filings and tax processes. - [Quarterly] Financial Check-In: Produce a quarterly update report to LPs on financial matters. - Forecasting: Help GPs prepare forecasts for the fund's performance. - KYC & AML Issues: Assist GPs in resolving any KYC or AML issues during formation or closing. DEALSThe Deal Playbooks outline the stages of the deal process, from initial assessments and deal sourcing to addressing deal-related problems and managing portfolio companies. It also includes guidance on conducting special purpose vehicles (SPVs) for co-investments and follow-on investments. - Doing Deals - Assessment: Perform a comprehensive assessment after the first close or <2 deal memos per month. - Sourcing Deals: Source less than 10 new deals in the investment pipeline per month. - Capital Deployment Strategy: Develop the capital deployment strategy for the fund. - Deal Problems: Improve the number of closings per quarter by addressing deal completion issues. - Portfolio Problems: Handle unique problems or shutdowns of portfolio companies. - Doing an SPV: Assist GP(s) in setting up SPVs for co-investments or follow-on investments. - Decile Hub Deal Memo: Provide assistance with the deal memo feature within Decile Hub. - [Quarterly] Portfolio Updates: Collect performance data on each portfolio company each quarter for updates.

European GPs (General Partners) looking to fundraise in Europe, even with the domicile of the fund in Delaware, face a complex regulatory environment. When pitching EU limited partners before the fund is launched, manager must adhere to ...

European GPs (General Partners) looking to fundraise in Europe, even with the domicile of the fund in Delaware, face a complex regulatory environment. When pitching EU limited partners before the fund is launched, manager must adhere to the Alternative Investment Fund Managers Directive (AIFMD), which regulates pre-marketing activities. A key pre-marketing strategy in the EU is reverse solicitation.  Reverse solicitation in the EU context requires that the initial request for materials be made by the investor or limited partner, without the manager explicitly pitching the fund. The fund manager must document this investor-initiated contact and limit their response to the specific request of the investor. For example, a prospective limited partner may ask the manager if they are launching a fund, and then the manager can share fund-related information. EU fund managers often domicile their funds in the US for a more favorable regulatory framework. If a manager chooses to domicile in the EU, they must either obtain the European Venture Capital Funds (EUVECA) designation or adhere to the individual laws of EU member states where they have limited partners. Due to high regulatory and compliance costs in the EU, it does not make sense to place a fund in the EU that is less than $15 MM in size. Additionally, it can take over a year to get the basic approvals and licenses. See: https://govclab.com/2023/12/14/eu-fundraising-for-new-managers/

Cornerstone V3 is currently being finalized, in the meantime you can find v2 here. https://govclab.com/2023/01/05/cornerstone-lpa-version-2/

Cornerstone V3 is currently being finalized, in the meantime you can find v2 here. https://govclab.com/2023/01/05/cornerstone-lpa-version-2/

Though it's usually difficult to get attribution for your work from your previous employer, you should ask. Otherwise, you can't mention your achievements because LPs will ask for proof during the DD process. In addition, consider speaki...

Though it's usually difficult to get attribution for your work from your previous employer, you should ask. Otherwise, you can't mention your achievements because LPs will ask for proof during the DD process. In addition, consider speaking with your co-workers to see if they are open to becoming a reference. The most likely solution here is that you will have to find something else to mention in your secret sauce in your thesis.