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General VC Questions

What is the importance of a PPM for a new VC firm during fundraising?

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Feb 19, 2024
Hi VC Lab,

I'm in the process of establishing a new VC firm, New Light Ventures, focusing on innovative startups. I am considering the need for a Private Placement Memorandum (PPM) to facilitate our fundraising efforts and ensure compliance.

Could you share insights on:
- What is the importance of a PPM for a new VC firm during fundraising?
- Any best practices or resources for drafting a PPM?

Appreciate your guidance!
1 answer
Accepted Answer
Feb 19, 2024
PPMs are not common for small emerging manager funds. They are typically more common in very large funds >$50M. The legal cost is not often justified for small fund sizes. Small emerging firms typically do not manage enough money to where the legal exposure would justify it.

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