All Questions

You must amend your Form ADV each year by filing an annual updating amendment within 90 days after the end of your fiscal year. For best practice, you should have you legal counsel file this amendment for the fund.

You must amend your Form ADV each year by filing an annual updating amendment within 90 days after the end of your fiscal year. For best practice, you should have you legal counsel file this amendment for the fund.

You should share how much you have closed, if an LP asks. However, unless you have closed at least 50% of the fund, it's sub-optimal to lead with this type of information because it's unclear if you will reach your target. This is also w...

You should share how much you have closed, if an LP asks. However, unless you have closed at least 50% of the fund, it's sub-optimal to lead with this type of information because it's unclear if you will reach your target. This is also why it's absolutely critical to set your fund size as the minimum target rather then your maximum. The timing also matters. For example, if you recently did a 1st close and you have 20% subscribed, that's a great signal to LPs. On the other hand it doesn't look great if you set your fund size at $20m and you only closed on $5m with 6 months left in your fundraising period. If you have a lot of fundraising momentum you can create a scarcity effect that 'the train is leaving the station, get on now'. You can use this momentum to ask current LPs for additional introductions etc.. and if they are excited about the opportunity, they will comply. 

First, confirm that you and any other Managing Partners or General Partners (Partners) have the capacity to invest up to 1% or more of the Fund Size in cash or possibly in startup equity at cost. Next, confirm that all Partners can work ...

First, confirm that you and any other Managing Partners or General Partners (Partners) have the capacity to invest up to 1% or more of the Fund Size in cash or possibly in startup equity at cost. Next, confirm that all Partners can work between 9 and 18 months on fund formation without being fully compensated for that work, writing the name and the number of hours per week that each Partner can commit with limited or no compensation. Then, reflect upon the fact that each Partner is making a minimum of 12 year commitment to the firm, writing the name and the means by which you have validated the long-term commitment that each Partner has made. Finally, use an agreement like this one (https://vcl.to/mmm) to put finalize the scope for each partner. 

The LP Institute is an 8 week online program built to teach Limited Partners (LPs) the process of investing in top venture capital managers. The program focuses on sourcing, conducting due diligence, and successfully closing on at least ...

The LP Institute is an 8 week online program built to teach Limited Partners (LPs) the process of investing in top venture capital managers. The program focuses on sourcing, conducting due diligence, and successfully closing on at least one investment. This hands-on approach ensures that participants not only learn the theoretical aspects of venture capital but also apply this knowledge to an investment. Find out more here: https://govclab.com/lp-institute/

We have developed an article for GPs to share with LPs: https://govclab.com/2023/04/26/how-to-invest-in-vc/. That being said, your proposed approach will not work. Sending LPs information about how the emerging managers over-perform othe...

We have developed an article for GPs to share with LPs: https://govclab.com/2023/04/26/how-to-invest-in-vc/. That being said, your proposed approach will not work. Sending LPs information about how the emerging managers over-perform other asset classes is a guaranteed fail. LPs that invest in new and/or emerging managers invest in the Managing Partner(s) because they believe that those INDIVIDUALS are uniquely qualified to executed on the thesis and they resonate with the thesis and want to be part of the mission. If an LP asks you questions like: how does this compare to investing in [insert asset class], you have lost. This is a no and you will struggle to recover from this. That means that your pitch was un-succesful. 

Feature requests for Decile Hub can be shared in the Decile Base Hub Feedback channel, which can be found here: https://www.decilehub.com/base/40-hub_feedback. Your insights and suggestions are always welcome as they help improve the pla...

Feature requests for Decile Hub can be shared in the Decile Base Hub Feedback channel, which can be found here: https://www.decilehub.com/base/40-hub_feedback. Your insights and suggestions are always welcome as they help improve the platform.

Yes. It's not uncommon for large LPs to want to request to be on the IC. That being said, you need to be very careful with who you nominate on the IC because it is making investment decisions for the fund. 

Yes. It's not uncommon for large LPs to want to request to be on the IC. That being said, you need to be very careful with who you nominate on the IC because it is making investment decisions for the fund. 

Some business expenses that are typically paid from management fees include: Laptops & Equipment, Salaries, LP Events, Software, Due Diligence and Travel. Please review this article on fund expenses: https://govclab.com/2022/11/07/mana...

Some business expenses that are typically paid from management fees include: Laptops & Equipment, Salaries, LP Events, Software, Due Diligence and Travel. Please review this article on fund expenses: https://govclab.com/2022/11/07/managing-fund-expenses-for-venture-capitalists/ Below is a summary. [Screen Shot 2024-01-03 at 6.20.08 PM.png]

VC Lab has developed a free Venture Share Agreement that is designed to be used by venture capital firms and Venture Partners alike to quickly start working together. The template agreement is designed to specify the duties and compensat...

VC Lab has developed a free Venture Share Agreement that is designed to be used by venture capital firms and Venture Partners alike to quickly start working together. The template agreement is designed to specify the duties and compensation of a Venture Partner by checking boxes. All the details can be found here: https://govclab.com/venture-share/ IMPORTANT: All conversations about VP compensation should be high level over a call. Do not put anything in writing until after you have formed and performed a 1st close. These agreements are between the VP and the fund, so none of this can take place until the fund is operational. Below is a summary: [Image]

The main metrics track record metrics are IRR, TVPI & DPI. However there are others that you can review in this question. In addition, you may also find this article helpful. 

The main metrics track record metrics are IRR, TVPI & DPI. However there are others that you can review in this question. In addition, you may also find this article helpful. 

It's really difficult to build an enduring VC firm on AngelList. Consider getting off AL. If you're going to setup a fund in BVI, all entities need to be in BVI. It's super expensive and inefficient for you to have entities in multiple d...

It's really difficult to build an enduring VC firm on AngelList. Consider getting off AL. If you're going to setup a fund in BVI, all entities need to be in BVI. It's super expensive and inefficient for you to have entities in multiple domiciles, especially for a small fund 1. By having entities in multiple domiciles, your operations costs will go to exponential because you need 2 sets of lawyers, 2 sets of fund admin, 2 sets of tax, 2 sets of treasury. Then, they have to talk to each other etc... The operational complexity is just not worth it.

TL'DR - leave your valuation policy in-tact and manage these LP communications at the newsletter/report summary level rather then at the financial level. Each quarterly/yearly report where you include financial statements should be accom...

TL'DR - leave your valuation policy in-tact and manage these LP communications at the newsletter/report summary level rather then at the financial level. Each quarterly/yearly report where you include financial statements should be accompanied by a newsletter that summarizes the information. In the newsletter, you can discuss this investment. ---- Tokens are considered non-qualified investments in VC funds. Each VC fund can allocate up to 20% of the capital to non-qualified investments. Because of this, as well as several other factors, it's unusual for VC funds to have a valuation policy that also manages tokens. Crypto/Blockchain/Web3 funds generally keep the tokens and the equity separate. The equity gets managed via a traditional valuation policy, financials approach and fund structure. The tokens are often managed by a different valuation policy, custodial policy and often a separate hedge-fund like structure.  So, you have 2 options here: 1. Setup the infrastructure to handle crypto which is expensive and complicated given that your Fund 1 is operational. 2. Manage the communications with current LPs via your newsletter/report summary and leave everything else in-tact.  I recommend approach 2. Unless you plan launching a blockchain/crypo/web3 focused fund 2, it's just not worth the hassle to research all this so you can come to the same conclusion.

Valuation increases are determined by the fund's valuation policy. In venture capital, the valuation of the company is typically set by priced equity round. Other inputs don't factor in unless the fund is writing down a company. 

Valuation increases are determined by the fund's valuation policy. In venture capital, the valuation of the company is typically set by priced equity round. Other inputs don't factor in unless the fund is writing down a company. 

Underrepresented represents the demographics of the founder (gender, ethnicity, economic background, underserved region for example.) Overlooked relates more to some investors' bias or the founder's lack of access or influence. This cou...

Underrepresented represents the demographics of the founder (gender, ethnicity, economic background, underserved region for example.) Overlooked relates more to some investors' bias or the founder's lack of access or influence. This could be a first-time founder or someone not from a central tech hub.  A great underrepresented founder can be overlooked. An overlooked founder doesn't necessarily mean they are underrepresented. 

Fund operations providers such as Decile Partners generate full financials for Limited Partners including: • Statement of Assets, Liabilities, and Investors' Capital • Income Statement  • Schedule of Investments • Statement of Changes in...

Fund operations providers such as Decile Partners generate full financials for Limited Partners including: • Statement of Assets, Liabilities, and Investors' Capital • Income Statement  • Schedule of Investments • Statement of Changes in Investor's Capital Limited Partners can access the above documents via their Decile Pro dashboard along with reports and the following additional metrics: • Portfolio Net IRR • Portfolio Fair Market Value • Capital Account Summary Reports summarizes the information outlined above and it's common for funds to highlight the following metrics:  • Committed Capital • Called Capital • Portfolio Investments • Cap Adjusted TVPI* • TVPI • DPI * The Decile Group valuation policy provides a Cap Adjusted TVPI projection which takes the cap defined in a SAFE note as the valuation of portfolio companies, which may be high depending on future financings.

If your fund is optimized to fund companies from your accelerator, then it could make sense to make it the focal point of your thesis. If you do mention the accelerator, provide metrics for how succesful alumni have become. This way LPs ...

If your fund is optimized to fund companies from your accelerator, then it could make sense to make it the focal point of your thesis. If you do mention the accelerator, provide metrics for how succesful alumni have become. This way LPs make a clear connection for why the fund will over-perform by specializing on investing in accelerator participants.  On the other-hand, if the accelerator is just one source of deal-flow amongst many, experiment with a different secret sauce.

The target fund size should be thought of as the minimal viable fund size to operate. Most new and emerging mangers set fund size targets that are too large, resulting in them under-subscribing and ensuring an extremely difficult time ra...

The target fund size should be thought of as the minimal viable fund size to operate. Most new and emerging mangers set fund size targets that are too large, resulting in them under-subscribing and ensuring an extremely difficult time raising future funds. For most new managers, the fund size should be $5 MM to $10 MM in the developed world and $2.5 to $5 MM in the developing world. If a new manager has extensive angel experience with strong returns or venture experience dealing with limited partners, then the fund size can be up to twice that size. For emerging managers on Fund III or Fund III, the next fund size can be 1x, 2x or 3x the previous fund size. If the returns from previous fund or funds are exceptional, an emerging manager can consider a fund size as large as 5x the previous fund size. The goal of any manager is to have a target fund size that they can easily hit or exceed. It is very difficult to recover from raising less than your target fund size. Conversely, oversubscribing is looked at favorably by all parties. If a manager cannot quickly raise 15% to 20% of the fund size from friends and confidants, then the fund size is too large.

You can find more resources at this on the Foresight website here: https://foresight.is/fund-resources

You can find more resources at this on the Foresight website here: https://foresight.is/fund-resources