General VC Questions

TL'DR - no, unless it's specified in your fund's valuation policy. Markups are recorded based on your adopted valuation policy. Most VC valuation policies, including Decile Group's, work as follows: SAFEs & Convertible Notes - Keep inv...

TL'DR - no, unless it's specified in your fund's valuation policy. Markups are recorded based on your adopted valuation policy. Most VC valuation policies, including Decile Group's, work as follows: SAFEs & Convertible Notes - Keep investments marked at cost Priced Rounds - Realize a markup Since most Decile Partners are pre-seed and seed, we have developed a cap-adjusted projection to help managers show LPs that the investments are in fact getting more valuable.  The issue with non-dilutive funding is that it doesn't come in the form of an investment and it does not set a new valuation when the funding is received by the company. As a result, the vast majority of valuation policies in VC, especially for early-stage funds, don't count inputs from such financings. 

VC Lab participants have three packages based on the level of help and guidance desired. The basic Program is free. For group office hours and more hands on support, there is a Plus package. For one-on-one guidance, including a private c...

VC Lab participants have three packages based on the level of help and guidance desired. The basic Program is free. For group office hours and more hands on support, there is a Plus package. For one-on-one guidance, including a private communication channel and weekly meetings, there is the Platinum package. The strongest managers coming out of the program have nearly all done the Platinum package, as it provides hands-on assistance with every aspect of launching and building a world-class fund. BasicEssential training and community to quickly close a fund COST: FREE • Weekly curriculum and mentoring to accelerate fund closing • Global peer community and collaborative working groups • Basic access to VC operations platform and resources For all Founders, General Partners, and Managing Partners in a Firm PlusExtended support and guidance for accelerated fund closing COST: $3,000 Post Start / $2,500 Pre Program Start • Enhanced platform access and regular group office hours • Dedicated support channels for program and operations • Diligence support and presentation assistance for LPs For Firm’s Leadership, Venture Partners, and/or Senior Team Members PlatinumOne-on-one support and hands-on assistance for firm success COST: $6,000  Post Start / $5,000 Pre Program Start  • Private expert channel and one-on-one office hours • Comprehensive fundraising support and closing planning • Deal review services and free associate assistance For Firm’s Leadership, Venture Partners, and/or Senior Team Members   Payments are made by one team member for each member of the firm, and the cost is an Organizational Expense, which will be reimbursed by the fund when the fund is formally established. 

@Grant Rogers If you scroll down on event settings you will see a section named Email Templates.  The first template here is the invite itself which you should customize to your own tone of voice.  Within this template is a green variabl...

@Grant Rogers If you scroll down on event settings you will see a section named Email Templates.  The first template here is the invite itself which you should customize to your own tone of voice.  Within this template is a green variable called "prospect.networking_event_url".  This is a personalized URL for registration by the recipient of that email. This is required to stay as the variable otherwise it can cause some complications with managing the registration list and controlling those invited if it is a private event.  When you have these details setup you can populate the guestlist.  You can do this through a few methods 1. Clicking the Event Details tab of a draft event will show you a box for GUESTLIST with a button for add a guest. this will add prospects one by one 2. Clicking the Event Attendees tab of an event will open the event pipeline for guest management, you can add a prospect one by one or through importing a csv as you would in your fundraising pipeline 3. You can go to any other pipeline or your directory and bulk select (clicking the checkbox next to each name desired to be invited) then copy them all in bulk to the event pipeline. When you bulk select a green banner shows at the top, clicking the Copy To link will open a box to select the target pipeline. Select the event you created and select guestlist - NOT YET INVITED as the stage. et voila you have populated the guestlist.  Now that you have: - the event set up with event details - the emails are set up in your voice - determined if you want the invited stage to automatically send out reminder and last call emails - the guestlist populated You will click the green button "Publish Event & Send Invites" What this button will accomplish is two things: 1. you will switch your event from draft to live allowing registrations to flow in 2. you will send out the event invite to all prospects in your guestlist When someone registers, they will then be moved to the "RSVP - Yes" stage and a registration confirmation email will be automatically sent to the registrant.  While the event is live and upcoming, if you would like to invite more, all you need to do is add the prospect(s) to the invited stage and the invite will again be automatically sent out.  Feel free to ask any other questions on this system. Congratulations on getting your first event set up!

Typically this is done at the LP entity level because it's the fund's portfolio company. If you were to do it at the ManCo level you would have an audit trail that showed that the stock was transferred to the manager and you would need t...

Typically this is done at the LP entity level because it's the fund's portfolio company. If you were to do it at the ManCo level you would have an audit trail that showed that the stock was transferred to the manager and you would need to explain the reason even if it was temporary.

Yes, however it's not a good idea to do so from a business perspective because: 1. Most SPV providers are not setup to do capital calls. As a result the costs involved in setting up an SPV that can manage capital calls is prohibitive.  ...

Yes, however it's not a good idea to do so from a business perspective because: 1. Most SPV providers are not setup to do capital calls. As a result the costs involved in setting up an SPV that can manage capital calls is prohibitive.  2. There is no benefit to the GP because every member of the SPV counts towards the 99 investor limit. 3. They can make investor relations more challenging.

Yes, E*TRADE, Fidelity, and Schwab generally allow VC funds to open brokerage accounts to hold shares before distribution to LPs. However, it's advisable to check with each institution for specific requirements and services tailored to V...

Yes, E*TRADE, Fidelity, and Schwab generally allow VC funds to open brokerage accounts to hold shares before distribution to LPs. However, it's advisable to check with each institution for specific requirements and services tailored to VC funds.

UK is not a desirable domicile unless you're based in the UK and all your LPs are in the UK. Indian GPs that are based in India and plan to invest in local companies domicile in India. Alternatively, many also domicile in Delaware if the...

UK is not a desirable domicile unless you're based in the UK and all your LPs are in the UK. Indian GPs that are based in India and plan to invest in local companies domicile in India. Alternatively, many also domicile in Delaware if the companies they invest in also are headquartered in a major domicile like Delaware or Singapore. 

A deal warehouse involves a prospective fund manager making an investment personally or through a wholly-owned entity before the venture capital fund is set up and reaches its first close. After the fund's first close, these investments ...

A deal warehouse involves a prospective fund manager making an investment personally or through a wholly-owned entity before the venture capital fund is set up and reaches its first close. After the fund's first close, these investments are transferred into the fund, typically at cost. To warehouse a deal not part of the current fund, you need to: 1. Invest personally or via a wholly-owned entity. 2. Secure approval from the company to change the owner. 3. Transfer the investment to the fund after the first close, following consistent rules for such transfers. Ensure all warehoused investments are disclosed to LPs before closing.

This is likely in reference to General Solicitation under SEC Rule 506(c) - you can learn more about it here: https://www.decilehub.com/base/17-fund-operations/1782-what-is-this-506-c-thing-i-keep-hearing-about-should-i-do-it

This is likely in reference to General Solicitation under SEC Rule 506(c) - you can learn more about it here: https://www.decilehub.com/base/17-fund-operations/1782-what-is-this-506-c-thing-i-keep-hearing-about-should-i-do-it

Yikes! There is little need to do this. People that are trying to do stuff like this do so because they are desperate. First, "receive incentives for raising capital" is a MAJOR broker dealer violation. Second, a $5k investment is not wo...

Yikes! There is little need to do this. People that are trying to do stuff like this do so because they are desperate. First, "receive incentives for raising capital" is a MAJOR broker dealer violation. Second, a $5k investment is not worth your time (do the math of 2% for $5k). Third, the kind of people that can only invest $5k in a fund typically will struggle to help GPs because their networks rarely contain people that can invest $500k in a fund or that would use their investment as a 'signal' for quality.

For SAFE (or convertible note) portfolio investments 1. managers should track progress of the company, and potentially help the team negotiate to ensure fair terms for investors, founders and employees. 2. carefully review the docs and c...

For SAFE (or convertible note) portfolio investments 1. managers should track progress of the company, and potentially help the team negotiate to ensure fair terms for investors, founders and employees. 2. carefully review the docs and confirm conversion calculations. 3. participate in pro rata investment - if available - potentially offering this to LPs - potentially creating an SPV as a rollup vehicle and taking carry. Following conversion, the manager enters the updated holding information into Hub as a new Funding Round.

By definition, a studio will have a lot more ownership then most investors. Because of the complicated cap-tables of studio companies, many, if not most VCs avoid investing in such companies. Rather then attempting to figure out how to m...

By definition, a studio will have a lot more ownership then most investors. Because of the complicated cap-tables of studio companies, many, if not most VCs avoid investing in such companies. Rather then attempting to figure out how to minimize dilution, it's better for studios to focus on spinning out venture scale businesses addressing large markets that can attract follow on financings from downstream VCs despite their cap-tables. 

Yes. LPs can see various metrics, including historicals via Decile Pro. 

Yes. LPs can see various metrics, including historicals via Decile Pro. 

Decile Hub has the capability to calculate and showcase how much capital is called and which investors have fulfilled their capital call. For non-compliance, fund managers can send reminders and contact directly with their investors to r...

Decile Hub has the capability to calculate and showcase how much capital is called and which investors have fulfilled their capital call. For non-compliance, fund managers can send reminders and contact directly with their investors to remind them to satisfy their contribution to the fund.

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...

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 to investors as distributions, they were instead retained by the company. For this reason, retained earnings decrease when a company either loses money or pays distributions and increase when new profits are created.

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...

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 using the download icon to the right of the line item

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. 

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. 

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...

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 (valuation cap or discount) are not yet decided, and the investor and company want to execute the investment quickly. Some MFN provisions require the investor be informed of new investments with better terms, then specifically electing to take the new terms. Some MFN provisions apply on conversion, where the actual conversion to shares is determined based on the MFN and any other terms.

The best practices for an Employee Stock Ownership Plan (ESOP) include ensuring that founders and employees of a startup have vesting schedules to secure investment from reputable VCs. This helps align the interests of the employees with...

The best practices for an Employee Stock Ownership Plan (ESOP) include ensuring that founders and employees of a startup have vesting schedules to secure investment from reputable VCs. This helps align the interests of the employees with the long-term success of the company and provides a structured approach to equity distribution.

The income in a fund's Profit and Loss statement (P&L) typically includes realized gains from the sale of investments, unrealized gains from the increase in fair market value of investments, and any income generated from the investments ...

The income in a fund's Profit and Loss statement (P&L) typically includes realized gains from the sale of investments, unrealized gains from the increase in fair market value of investments, and any income generated from the investments such as dividends or interest. It's important to note that the specific components can vary depending on the fund's investment strategy and the types of investments it holds.

this question has already been answered, and is a great example of something that you should ask the AI (the field at the top of the screen) here is the previous answer Here is the answer from Decile Base AI “Management fees are the ...

this question has already been answered, and is a great example of something that you should ask the AI (the field at the top of the screen) here is the previous answer Here is the answer from Decile Base AI “Management fees are the annual charges that are allocated to the General Partner (GP) as a percentage of committed capital in a venture capital fund. These fees are typically used to cover operational costs such as legal and accounting fees, due diligence, and other expenses. The standard rate is usually around 2%, although this can vary. The fees are often structured on a sliding scale, starting higher during the active investment period and declining in later years. ” Here is an article we wrote on the topic over on govclab.com And here is another article on the management fee models

Generally speaking, SPVs (Special Purpose Vehicles) are investment entities (commonly LLCs) formed for the purpose of making a single investment into a single startup.  • For example, let's say a fund has received a follow-on opportunity...

Generally speaking, SPVs (Special Purpose Vehicles) are investment entities (commonly LLCs) formed for the purpose of making a single investment into a single startup.  • For example, let's say a fund has received a follow-on opportunity into a startup it previously invested into - however Fund A is not set up to do follow-on investments nor does it have the capital to do so.  • Fund A could set up an SPV and "syndicate" the follow-on opportunity, offering the SPV to its limited partners or others (depending on the circumstances). The SPV would collect the capital (after all legal setup and agreements have been completed) and then make the follow-on investment. SPVs are also sometimes set up when an investor has received an allocation into a hot deal, but they are not able to make the the full allocation by themselves. Note that not all startups/companies are willing to accept investments via SPV, so be sure to check. 

There is no typical split. But, in general, there should be one founder who owns a bit more that is the final tie-breaker. 

There is no typical split. But, in general, there should be one founder who owns a bit more that is the final tie-breaker.