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1

In the Balance Sheet (Assets section), why will the “Portfolio Investments, at Fair Market Value” show a negative balance if on the Schedule of Investments FAIR VALUE is higher than the COST?

I will assume that a negative balance in an assets account would only happen if the fair market value of the investment has gone to zero and thus the balance was zero less the cost of the investment. But in the example I'm looking at, in the Schedule of Investments it is clearly shown that FAIR VALUE is positive. Another option is that maybe those investments were made using SAFE notes and thus the investments are registered at cost instead of FMV because there hasn’t been a priced round on that company yet. But if that was the case, then the Cap Adjusted section should show a valuation projection using the cap defined in the SAFE notes as the valuation of the portfolio companies, and that's not the case in the example I'm looking at. The only additional option I can think of is that maybe the SAFE notes were issued without a valuation cap and thus rely on a discount to the next equity financing round, rather than a predefined cap. But in the example I'm looking at, by clicking on each Portfolio Company’s name, their respective “Founding Rounds” tabs seem to indicate that the fund holds Common Shares and not SAFE notes.

Top answer:

Yes, I can confirm the dataset is incorrect in the system.

 -  Rob Del Prete 1
1

Are Capital Contributions from GPs always set by default as exempt from Management Fees in Decile Hub?

Can you select in Decile Hub whether the GP commits are to be included or not in Management Fee calculations?  I tried the following sections but couldn’t find an option to do so:  Back Office > Manage Capital Accounts > Type “GP” > Clicked on “Decile Admin” Back Office > Entity Management > Venture Institute Cohort 3 GP > Clicked “Edit” on both “General Partner” and “Fund”

Top answer:

Yes, you can enable the GP to pay management fees by going to Back Office > Entity Management > Fund "Edit" > Click "Enable GP management fees"

 -  Rob Del Prete 1
1

Updating the Investments section in Decile

- How are comments in the "Transaction comment" section  typically structured within Decile Hub? - How is automation in activity triggered when updating valuations? Are there parameters to trigger automation?

1

What does the message for capital calls look like for LPs when we call capital from Decile Hub?

Do the LPs receive something like a one-click invoice in the form of a capital call or a link with a personalized message from the GP?

Top answer:

They receive an email that summarizes the capital call notice and a link to log in to Decile Pro (https://decilepro.com/) to review more details and to retrieve wire instructions. 

 -  Mike Suprovici
0
1

What are “Retained Earnings”?

Top answer:

Retained earnings are the cumulative net earnings or profits of a firm after accounting for distribution payments. As an important concept in accounting, the word “retained” captures the fact that because those earnings were not paid out...

1

Can the law firm of one of our fund partners (GP) advise a portfolio company on trademark registration? (that firm is not our fund counsel)

I understand a law firm advising a venture fund should not also advise a portfolio company in that fund due to potential conflicts (especially with corporate counsel). One of our fund partners is also an attorney in a firm that does patent/trademark registration work. (The fund uses a different firm for legal counsel) With a specific scope on trademark registration, there seems to be little chance for conflict in that narrow scope -- more of a value-add. Is the answer the same regardless of the partner's firm association? Firm Partner, Fund GP, Venture Partner?

Top answer:

They can. Typically the law firm partner will evaluate if there is a conflict and recommend the next steps. Often they will recommend that someone else in their firm lead the project. 

 -  Mike Suprovici
0
1

While setting up a capital call in Decile Hub, what are the best practices to include in Notes To LP? Are there any specific things that are a must to include in notes to LP during capital calls?

Top answer:

Anything specific to the details of the call (investments, fund expenses, management fees) that details why you are making the capital call.

 -  Rob Del Prete 0
1

What can be the different components of the Liability section in the balance sheet of a fund’s account?

Top answer:

The Liability section in the balance sheet of a fund’s account can include various components such as: - Management Fee Payable - Legal formation fees - State domicile filing fees - Blue Sky Fees - Form ADV Filing - Annual Tax Preparati...

1

I generated the annual report on Decile Group (Back Office section) , but by some reason it does not appear as a downloaded material. Where can I download it?

Top answer:

under back office > Fund Overview Click "Generate a Report" This pops up a modal with what reports to generate as well as a list of all reports that have been generated.  This list of all generated reports is where you can download usi...

1

Why is unrealized gain/loss in schedule of investments calculated by adding the cost and fair market value in the annual report?

The cost of investment is $25,000 and Fair Market Value is $100,000. But the unrealized gains in the report is $125,000, rather it should be $75,000.

Top answer:

It's calculated by taking the difference between the FMV and Cost of the investment.

 -  Rob Del Prete 0
1

If I make an investment in Fund I with no follow-on reserves, can I follow on that investment in Fund II using the pro rata rights from Fund I?

Fund I has no reserves and is investing in Seed stage.  In future, I hope to establish a Fund II with follow-on reserves, investing in Seed plus Series A.  If I get pro rata rights from my investments in Fund I, can I use those rights to invest using the new Fund II? 

Top answer:

The best practice is to offer that pro-rata to fund 1 LPs first via SPVs. Next, bring the investment to your LPAC to clear any conflicts. Then, make the investment. 

 -  Mike Suprovici
1
1

When does an emerging fund typically reach profitability?

This question came up as it tied together several common themes, including the overall success rate of emerging funds (i.e, a fund that failed will not reach profitability), fund model between distributed/concentrated/hybrid, capital deployment, and liquidity events. At the same time, emerging funds have shown the ability to outperform, so I would love to learn more about when they are able to reach profitability and greatly reduce risk while retaining upside. 

1

On a VC Fund's financial statements, where would the GP commit show up?

On the Statement of Assets on Decile Hub, under Investor's Capital, I see Capital Contributions - Limited Partners. Where would GP commit show up on the financials? Would it be under Assets but not under Investor's Capital? Is there a separate line item for GP commit?

Top answer:

There is a separate line item for the GP commit labelled Capital Contributions - General Partners.

 -  Rob Del Prete 0
1

Can you explain the importance and function of Most Favorite Nation regarding updating valuation of an investment? Can you gave an example?

Top answer:

Most Favorite Nation (MFN) is a negotiated provision in SAFE or convertible investments, which provides the investor with the best terms for that group of investments. This is sometimes used in early investments where other terms (valuat...

1

why the total cost, FMV and Unrealized Gain/Loss for each PortCo in Cohort 3 Investments do not add up?

why the total cost, FMV and Unrealized Gain/Loss for each PortCo in Cohort 3 Investments do not add up? 

Top answer:

The dataset in the system is incorrect, which is incorrectly reflecting investments and their values.

 -  Rob Del Prete 0