All Questions

For any fund over $5 MM, syndicates are a waste of time. They take an enormous amount of effort to close and to manage, and they don’t raise sizable amounts of capital. For example, it’s not uncommon to spend hundreds of hours, $50,000 U...

For any fund over $5 MM, syndicates are a waste of time. They take an enormous amount of effort to close and to manage, and they don’t raise sizable amounts of capital. For example, it’s not uncommon to spend hundreds of hours, $50,000 USD and 6 months to raise less than a million.

If most of your investors and investments are in the US, then don’t bother looking at a Cayman subsidiary or shell. The advantages of these tax havens have been degraded as a result of expanding KYC and taxation regimes.

If most of your investors and investments are in the US, then don’t bother looking at a Cayman subsidiary or shell. The advantages of these tax havens have been degraded as a result of expanding KYC and taxation regimes.

As a general rule, the fund reimburses fund formation expenses, which tend to be legal expenses, and the fund does not reimburse other setup expenses, such as marketing. Pre-marketing is also highly regulated in most jurisdictions, so fu...

As a general rule, the fund reimburses fund formation expenses, which tend to be legal expenses, and the fund does not reimburse other setup expenses, such as marketing. Pre-marketing is also highly regulated in most jurisdictions, so funds tend to avoid marketing until after the fund is fully closed with 100% of the capital committed.

The best practice is to have a high minimum, but also to increase the minimum for each close as a closing strategy. With a $10 MM fund, the minimum for the first close might be $50K for friends moving to $100K for normal investors. By th...

The best practice is to have a high minimum, but also to increase the minimum for each close as a closing strategy. With a $10 MM fund, the minimum for the first close might be $50K for friends moving to $100K for normal investors. By the second close, the minimum might commonly be $250K.

If you trust the person, and you know who they will forward it to, then yes. If not, it’s not worth it because then you will always have to audit your mailing list to ensure you want everyone on there.

If you trust the person, and you know who they will forward it to, then yes. If not, it’s not worth it because then you will always have to audit your mailing list to ensure you want everyone on there.

It’s not really going to build your credibility in the market. Your brand and your experience will do that. Also, they will not make investment decisions on your timeline, most likely, because they have to get approvals etc… There are ot...

It’s not really going to build your credibility in the market. Your brand and your experience will do that. Also, they will not make investment decisions on your timeline, most likely, because they have to get approvals etc… There are other ways to build a relationship with them besides doing co-investments that will yield just as good of an ROI. In my personal opinion, this is a distraction right now.

You can find the PACT here: https://govclab.com/2023/01/30/the-pact-a-commitment-letter-to-hard-circle-lps-2/

You can find the PACT here: https://govclab.com/2023/01/30/the-pact-a-commitment-letter-to-hard-circle-lps-2/

The KPMG article is correct, capital gains are not sourced to the US and therefore will not be taxed in the US for your foreign LPs. To address your point about engaging in US trade or business, investment entities are not considered to ...

The KPMG article is correct, capital gains are not sourced to the US and therefore will not be taxed in the US for your foreign LPs. To address your point about engaging in US trade or business, investment entities are not considered to be engaged in a trade or business unless they are trading pretty much daily more like a hedge fund (venture capital and private equity do not take part in as many transactions). The income generated by the LP entity would not be considered ECI and they foreign LP would only need to pay tax in their home country.

You could ask the companies to comply with the For Progress (https://fi.co/progress) designation, and then the company would publish their results every month or quarter. You can then roll up the results into your own reporting.

You could ask the companies to comply with the For Progress (https://fi.co/progress) designation, and then the company would publish their results every month or quarter. You can then roll up the results into your own reporting.

The LP is asking for the ability to invest in future follow-on rounds into your portfolio companies. You allocate an LP a portion of your pro rata tights. This is normally offered verbally and handled by creating an SPV for each deal in ...

The LP is asking for the ability to invest in future follow-on rounds into your portfolio companies. You allocate an LP a portion of your pro rata tights. This is normally offered verbally and handled by creating an SPV for each deal in the subsequent rounds. It’s common to offer this to investors in your first close.

We don’t have examples because theses are confidential. But here is a framework to help:  Catchy subject Intro sentence announcing some great news with some sort of call to action.  Summary Section  • Section 1 summary (~5 words)  • Se...

We don’t have examples because theses are confidential. But here is a framework to help:  Catchy subject Intro sentence announcing some great news with some sort of call to action.  Summary Section  • Section 1 summary (~5 words)  • Section 2 summary (~5 words)  • Section 3 summary (~5 words)  Section 1 Paragraph  Section 2 Paragraph  Section 3 Paragraph  Closing with with reminder to call to action

No. “Fund rules” represent how you manage areas of conflict. For example, many VCs created rules that preclude them from making investments outside of their fund. “Investment criteria” represents what you look for in a company. I.e....

No. “Fund rules” represent how you manage areas of conflict. For example, many VCs created rules that preclude them from making investments outside of their fund. “Investment criteria” represents what you look for in a company. I.e. pre-seed in Italy etc…

You will be an employee, not a fund manager, and I have never seen these situations work out. As a simple test, ask them to send you an LOI plus a term sheet for the economics by next Wednesday for you to seriously evaluate the opportuni...

You will be an employee, not a fund manager, and I have never seen these situations work out. As a simple test, ask them to send you an LOI plus a term sheet for the economics by next Wednesday for you to seriously evaluate the opportunity. My guess is that this will not happen. There is a phenomenon called ‘LP Love,’ where prospective LPs will say things that shower you with love, but they never execute. You will have people promise that they will participate for 50% of your fund, and they never do anything but keep promising. So, get it signed as an LOI and in writing. Then, there is a 75% chance that this is real. Ask Rafeh Saleh about his similar experiences in the last cohort.

That is not a common term. The title signifies that the partner is in the GP, versus the ManCo, and handles fund operations. This would be for a larger fund, and not relevant for small firms.

That is not a common term. The title signifies that the partner is in the GP, versus the ManCo, and handles fund operations. This would be for a larger fund, and not relevant for small firms.

Your goal is to build relationships. Many of the folks may become connectors to LPs or invest directly. Learn about them and try to be helpful where you can.

Your goal is to build relationships. Many of the folks may become connectors to LPs or invest directly. Learn about them and try to be helpful where you can.

Read this: https://govclab.com/2022/03/10/venture-share/

Read this: https://govclab.com/2022/03/10/venture-share/