All Questions

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.

General solicitation in venture capital refers to publicly advertising or promoting the opportunity to invest into a fund without a substantive pre-existing relationship and the knowledge that the individual is accredited. To avoid issue...

General solicitation in venture capital refers to publicly advertising or promoting the opportunity to invest into a fund without a substantive pre-existing relationship and the knowledge that the individual is accredited. To avoid issues, one should not: (1) publicly disclose details about the fund on the internet, (2) use social media to promote the fund, (3) solicit investments from unaccredited investors that you do not know, and (4) make misleading or unsubstantiated claims. See this article for more help: https://govclab.com/2023/11/22/general-solicitation/

VC Firms use a 3 entity structure and you can read more about it here. The 3 entities are typically two LLCs and one LP for Delaware domiciled funds. Corporations are generally not used. 

VC Firms use a 3 entity structure and you can read more about it here. The 3 entities are typically two LLCs and one LP for Delaware domiciled funds. Corporations are generally not used. 

It really depends on where the GP is in the process. If they are early, they can tell LPs that they just started the process. If they are further along, the can mention hard/soft circled amounts. 

It really depends on where the GP is in the process. If they are early, they can tell LPs that they just started the process. If they are further along, the can mention hard/soft circled amounts. 

In any case it is important to keep in mind the general solicitation rules in the jurisdictions the manager is reaching out to investors. In the U.S. for Reg D offerings unless the fund is complying with Rule 506(c), managers should ensu...

In any case it is important to keep in mind the general solicitation rules in the jurisdictions the manager is reaching out to investors. In the U.S. for Reg D offerings unless the fund is complying with Rule 506(c), managers should ensure that anyone acting on behalf of the fund does not send out emails to groups in a manner that may constitute general solicitation.  General guidance is that managers should solicit for investment only those persons they have a pre-existing relationship substantive enough to evaluate that such person is an accredited investor.

You may be able to, however, please note in practice transferring the warehoused investment to your fund would be difficult because you would have to obtain consent from the fund you invested in to transfer your ownership to your own fun...

You may be able to, however, please note in practice transferring the warehoused investment to your fund would be difficult because you would have to obtain consent from the fund you invested in to transfer your ownership to your own fund. If you are still actively fundraising, you will not know your fund's final underlying ownership count and this may cause the fund you invested in to blow its securities exemption. In addition if you do transfer this interest to your fund, the investment would count towards your fund's 20% non-qualifying investment bucket.

Fund managers can warehouse an investment for the fund in their personal capacity or through an entity they wholly own and control, prior to the fund's initial closing. 

Fund managers can warehouse an investment for the fund in their personal capacity or through an entity they wholly own and control, prior to the fund's initial closing.