All Questions

For the thesis, use the place where the fund is being launched in and where it plans to make investments. LPs generally do not like to invest in multiple countries, as funds are a pass through vehicle. Most LPs prefer to invest in a spec...

For the thesis, use the place where the fund is being launched in and where it plans to make investments. LPs generally do not like to invest in multiple countries, as funds are a pass through vehicle. Most LPs prefer to invest in a specified country or region.

For new managers with limited investing experience, 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 ...

For new managers with limited investing experience, 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, ranging from $10 MM to $20 MM and $5 MM to $10 MM respectively.  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 lolled at favorably by all parties.  If a manager can not quickly raise 15% to 20% of the fund size from friends and confidants, then the fund size is too large. 

It's unlikely that the large firm will agree to this arrangement with the VP due to conflicts of interest. It also works vice versa where it creates conflicts of interest for your fund and you will need to disclose it.

It's unlikely that the large firm will agree to this arrangement with the VP due to conflicts of interest. It also works vice versa where it creates conflicts of interest for your fund and you will need to disclose it.

DO NOT INCORPORATE ANYTHING. Stop now. This is a major waste of time and effort. You need a minimum of 10%+ hard circled via PACTs to begin a formation process. Then, you need to work with super specialized VC formation attorneys to get ...

DO NOT INCORPORATE ANYTHING. Stop now. This is a major waste of time and effort. You need a minimum of 10%+ hard circled via PACTs to begin a formation process. Then, you need to work with super specialized VC formation attorneys to get this done and the only viable place is Delaware.  Your law firm must incorporate all 3 entities at the same time and also create all the operating agreements. Decile Launch includes all 3 entities and the operating agreements: ManCo, GP & LP.  With respect to tax, don't provide tax advice to your LPs. This is for your reference only. LLCs are flow through entities. Tax burdens are created when money is distributed to your LPs and they must pay it on their personal returns. Capital gains are not sourced to a specific location. They are taxed in the jurisdiction of the ultimate beneficiary. 

They are both compensated with a venture partner agreement and advisors typically get a bit less carry. 

They are both compensated with a venture partner agreement and advisors typically get a bit less carry. 

Fund Admin is a component of the Back Office function. Typically Fund Admin includes accounting, reporting and filings. Back Office includes a variety of other functions that can be in house or outsourced or both, such as Treasury, inves...

Fund Admin is a component of the Back Office function. Typically Fund Admin includes accounting, reporting and filings. Back Office includes a variety of other functions that can be in house or outsourced or both, such as Treasury, investment reviews, software, etc.. 

A capital call is a request made by a venture capital fund to its investors to contribute capital to the fund. This is typically done when the fund needs additional funds to make investments or to cover its ongoing expenses. Capital Call...

A capital call is a request made by a venture capital fund to its investors to contribute capital to the fund. This is typically done when the fund needs additional funds to make investments or to cover its ongoing expenses. Capital Calls are commonly paid by the Limited Partners as defined by the Limited Partner Agreement (LPA). You can learn more about the capital call process here: https://govclab.com/2023/05/07/vc-capital-calls/

We do not recommend an audit for Delaware funds <$20m. Audits are expensive they will negatively effect your metrics as a result. 

We do not recommend an audit for Delaware funds <$20m. Audits are expensive they will negatively effect your metrics as a result. 

Most LPAs have an 'investment period' clause and 'successor fund threshold' to provide alignment around expectations. If you're planning on deploying significantly faster then the investment period, then you should clear this with your L...

Most LPAs have an 'investment period' clause and 'successor fund threshold' to provide alignment around expectations. If you're planning on deploying significantly faster then the investment period, then you should clear this with your LPAC at a very minimum because it affects the return profile and the potential temporal diversification of the fund. 

Hi Scott, unfortunately it is not ideal for you as a Canadian to domicile your entities in the US. The reason being is that Canada does not recognize US LLC's as an entity type. You end up getting hit at a much higher tax rate on both yo...

Hi Scott, unfortunately it is not ideal for you as a Canadian to domicile your entities in the US. The reason being is that Canada does not recognize US LLC's as an entity type. You end up getting hit at a much higher tax rate on both your management fee income and any carry as it would get hit at a corporate tax rate and again when you take a distribution.

Delaware is VC Lab's recommended domicile in general. The Decile Launch program supports both Delaware and Ontario domiciles and we have worked with a number of venture studios. 

Delaware is VC Lab's recommended domicile in general. The Decile Launch program supports both Delaware and Ontario domiciles and we have worked with a number of venture studios. 

Deal Memos are dynamic documents that evolve as more information about a potential investment becomes available. It is not necessary to upload a term sheet, but it can be added as it becomes available (the Attachments and Links tab).

Deal Memos are dynamic documents that evolve as more information about a potential investment becomes available. It is not necessary to upload a term sheet, but it can be added as it becomes available (the Attachments and Links tab).

We recommend that you review VC Lab's Venture Share agreement. Principal level can receive anywhere from strategic to executive level compensation based on the recommended chart.

We recommend that you review VC Lab's Venture Share agreement. Principal level can receive anywhere from strategic to executive level compensation based on the recommended chart.

Generally speaking, yes - this can be done (though the LP may wish to consult a tax advisor).  If the LP has already wired in some capital, an Assignment and Contribution Agreement or its equivalent is typically signed between the LP an...

Generally speaking, yes - this can be done (though the LP may wish to consult a tax advisor).  If the LP has already wired in some capital, an Assignment and Contribution Agreement or its equivalent is typically signed between the LP and the LP's trust. If the LP has not yet wired any capital, it is often easier to have the LP sign a Withdrawal Agreement or its equivalent and then sign the LPA again in the name of the trust (or another name/entity as desired).  Decile Partners has standardized templates for both of the above situations (designed to work with Decile Group's standard suite of templates), and will coordinate to assist Decile Launch customers in completing them. Please contact your Venture Associate to inquire. 

Start here: https://foresight.is/templates/

Start here: https://foresight.is/templates/

I created the original SAFE Note. It was designed to replace convertible debt, which was being used for all early stage financings from 2002 to 2007. The original purpose and purpose still today is to be a fast and easy financing vehicle...

I created the original SAFE Note. It was designed to replace convertible debt, which was being used for all early stage financings from 2002 to 2007. The original purpose and purpose still today is to be a fast and easy financing vehicle for early stage companies without creating a preferred class of equity, which can cost tens of thousands of dollars.

Some of the benefits for a venture studio to have a fund and the structure is covered in this article here: https://govclab.com/2023/04/25/how-to-build-a-venture-studio/ Inevitably, almost all successful venture studios will have a fun...

Some of the benefits for a venture studio to have a fund and the structure is covered in this article here: https://govclab.com/2023/04/25/how-to-build-a-venture-studio/ Inevitably, almost all successful venture studios will have a fund, since this allows the venture studio to scale in a more structured and thoughtful way. The fund allows the venture studio to control their own destiny by backing the best outputs with more capital and, possibly, through multiple funding rounds. Since the outcome is inevitable to have a fund, then it makes often to start with a fund or to launch a fund early in the process.

The management fee is structured as the average of fees over the duration of the fund, which is normally 10 years. Depending on the LPA, managers may have the discretion to charge different amount per year. Most managers choose a waterfa...

The management fee is structured as the average of fees over the duration of the fund, which is normally 10 years. Depending on the LPA, managers may have the discretion to charge different amount per year. Most managers choose a waterfall starting at 3.5% in the first years and declining to 0.5% later on. This is designed to reflect the activity of investments and returns.

There are two solutions if you encounter an LP who would like to sign the LPA with a different name/entity than their pipeline prospect entry: 1. You can add their entity (e.g. LLC) to the "Organizations" directory and then add that LLC ...

There are two solutions if you encounter an LP who would like to sign the LPA with a different name/entity than their pipeline prospect entry: 1. You can add their entity (e.g. LLC) to the "Organizations" directory and then add that LLC as a Capital Account (e.g. Closing pipeline) 2. You can add the Individual who signed the PACT as a Capital Account. Either way, the person who receives the email will have an option to modify their data before signing the LPA. If they get an email as an "individual", they will have the option to switch to an entity on the first page of the LP Onboarding questionnaire. 

Reverse solicitation occurs when an investor reaches out to you first to request fund information. Many jurisdictions have a reverse solicitation safe harbour exemption that says if an investor reaches out to you first to request informa...

Reverse solicitation occurs when an investor reaches out to you first to request fund information. Many jurisdictions have a reverse solicitation safe harbour exemption that says if an investor reaches out to you first to request information regarding the fund offering then you do not have to register the fund offering in the jurisdiction. Reverse solicitation is fact-based, so in order to rely on any reverse solicitation safe harbour you need to be able to prove (with email or text evidence) that you did not market the fund to any investor without them requesting fund information first.