General VC Questions

No it does not. Each VC fund adopts a valuation policy and the hub accounting system reflects markups and markdowns based on this document. The vast majority of VC valuation policies markup an investment if there is a new priced round of...

No it does not. Each VC fund adopts a valuation policy and the hub accounting system reflects markups and markdowns based on this document. The vast majority of VC valuation policies markup an investment if there is a new priced round of financings. Otherwise they keep the investment at cost or they write it off. 

Upon receiving the required agreements and documentation for a valuation update, these are reviewed by fund accounting and sometimes fund operations before updating the system (applied per the fund's valuation policy). 

Upon receiving the required agreements and documentation for a valuation update, these are reviewed by fund accounting and sometimes fund operations before updating the system (applied per the fund's valuation policy). 

Please ask the AI Agreement Reviewer, and if you have additional questions, please post them in Base.

Please ask the AI Agreement Reviewer, and if you have additional questions, please post them in Base.

The AI Agreement Reviewer is specifically designed for these types of questions - if there are still questions afterwards, please post them in Base. 

The AI Agreement Reviewer is specifically designed for these types of questions - if there are still questions afterwards, please post them in Base. 

Sector, geography, and even general check-sizes are essential parts of a Fund's investment thesis and all have strategic considerations. Any related limitations on the fund managers' discretion in making investments usually derives from ...

Sector, geography, and even general check-sizes are essential parts of a Fund's investment thesis and all have strategic considerations. Any related limitations on the fund managers' discretion in making investments usually derives from said factors, rather than the other way around - and these are typically baked into the Fund's Limited Partnership Agreement. Other restrictions upon a fund manager's discretion in making investments will depend on their leverage, the size of the fund, demands from limited partners (particularly family offices and institutional investors), the domicile of the fund, requirements for investment committees, etc. For small and emerging funds, there are often few, if any, of the above types of restrictions.

Yes - the Limited Partnership Agreement spells out a limited partner's obligations and spells out the fund manager's options should a limited partner fail to meet said obligations (mostly relating to funding and capital calls). 

Yes - the Limited Partnership Agreement spells out a limited partner's obligations and spells out the fund manager's options should a limited partner fail to meet said obligations (mostly relating to funding and capital calls). 

Generally speaking, there are no easy exit options for limited partners should a fund underperform - this is why it's critical for limited partners to carefully evaluate and perform due diligence on any fund managers they intend to have ...

Generally speaking, there are no easy exit options for limited partners should a fund underperform - this is why it's critical for limited partners to carefully evaluate and perform due diligence on any fund managers they intend to have manage their money for a decade or more.   In most cases, secondary sales are also not an easy exit option. 

If by "template for an agreement among GPs" this question is asking about an agreement by and between the fund's managers, this is typically the operating agreement for the management company of the firm. In the standard Decile structure...

If by "template for an agreement among GPs" this question is asking about an agreement by and between the fund's managers, this is typically the operating agreement for the management company of the firm. In the standard Decile structure, this would be the Alignment Agreement, which we do have a template for. 

Side letters are still common and allowed by the SEC rules. Ethical managers typically disclose these side-letters because the terms can often affect the performance of the fund.

Side letters are still common and allowed by the SEC rules. Ethical managers typically disclose these side-letters because the terms can often affect the performance of the fund.

The criteria for determining when a portfolio company qualifies for a follow-on investment typically depend on the fund's size, strategy, and the growth trajectory of the company. Factors include the potential for future rounds, market c...

The criteria for determining when a portfolio company qualifies for a follow-on investment typically depend on the fund's size, strategy, and the growth trajectory of the company. Factors include the potential for future rounds, market conditions, and the need to support companies through critical milestones. Approval from the Limited Partner Advisory Committee (LPAC) may be required, especially if there's a conflict of interest, such as when the company was an angel investment of the general partner.

Every transaction that is recorded in the system needs to have supporting documentation, such as a legal agreement. Firms may also use an external auditor to further verify the date. However most small funds in Delaware often don't do an...

Every transaction that is recorded in the system needs to have supporting documentation, such as a legal agreement. Firms may also use an external auditor to further verify the date. However most small funds in Delaware often don't do an audit because: 1. The reports generated by the Decile Partners back office team are audit ready via numerous checks and balances 2. audits create a drag on metrics and 3. audits can create a significant opportunity costs for funds under $25m.

Below are the options for managing a defaulting LP: Option 1: The cleanest and best option is for you have the defaulting LPs sell their position other buyers. To ‘replace’ LPs - new LPs need to buy the entire position from the defaulti...

Below are the options for managing a defaulting LP: Option 1: The cleanest and best option is for you have the defaulting LPs sell their position other buyers. To ‘replace’ LPs - new LPs need to buy the entire position from the defaulting LPs. Here is how it works: 1. You introduce them (defaulting LP 1) to a buyer (LP 2), or they find a potential buyer 2. LP 1 & LP2 agree on a price (i.e. I’ll give you $15k for the $25k capital call that you made and I’ll take over the capital calls) 3. They notify you for approval 4. You notify us and we’ll handle the transfer. Important: new LPs must buy the entire position of the default LP. So, if the defaulting LP signed an LPA for $100k, the new LP needs to buy the entire $100k position (not more, not less) Option 2: Adjust capital account balance. This would effectively reduce the fund size without lowering the total Management Fees. Under this scenario, you re-adjust their contribution as if they committed less capital and there fore you get less fees. So, if $100k commitment wired $50k so far and can’t make any more capital calls - they are now a $50k LP and the fund gets $10k in management fees (20% of the new comittment) vs $20k if the LP continues making their capital calls to reach $100k. Option 3 (last resort): Invoke Default Provision in the LPA. For example, the Cornerstone LPA states: (b) if the Limited Partner has made a Capital Contribution, General Partner may sell the defaulting Limited Partner’s Interest for a purchase price equal to 50% of the lesser of (i) the defaulting Limited Partner’s aggregate Capital Contributions, or (ii) the Fair Value of the defaulting Limited Partner’s Interest at the time of default

There is no concept of GP commit in the Start Fund product. So, there is no expected amount. 

There is no concept of GP commit in the Start Fund product. So, there is no expected amount. 

Yes, no problem. You can sign the agreement when you're ready to launch your Start Fund.

Yes, no problem. You can sign the agreement when you're ready to launch your Start Fund.

No. Start Fund can not accept European LPs due to the strict general solicitation and licensing requirements. Limited partners in the European Union will be blocked and can not be accepted into Start Funds.

No. Start Fund can not accept European LPs due to the strict general solicitation and licensing requirements. Limited partners in the European Union will be blocked and can not be accepted into Start Funds.

The decision of what domicile to set up (register) a venture capital fund in can be complex, especially if a fund manager resides in a different jurisdiction. While many fund managers ultimately decide to set up a Delaware fund, there ar...

The decision of what domicile to set up (register) a venture capital fund in can be complex, especially if a fund manager resides in a different jurisdiction. While many fund managers ultimately decide to set up a Delaware fund, there are many factors to take into account with respect to this question, such as: • Regulations regarding soliciting limited partners to invest in the fund (both in the fund's domicile and in the fund manager's resident domicile); • Taxes, especially cross borders ones (including personal); • Cost of administrative, tax, legal, accounting, and regulatory burdens across borders (which may double or more); • A domicile's suitability for venture capital in general, including the industries or sectors a fund manager desires to invest in; • Etc. It's important to carefully evaluate all factors before doing any entity setup. While we aren't able to go into any specific details regarding running a UK registered Fund while residing in Canada, in our general experience, this may be...quite expensive and burdensome, regulatory-wise as well as tax-wise. 

Kanban was our most highly requested feature, particularly for dealflow funnels/pipelines. A kanban view has the same features as a regular view, it's just a different visualization. This can be helpful for something like later stages of...

Kanban was our most highly requested feature, particularly for dealflow funnels/pipelines. A kanban view has the same features as a regular view, it's just a different visualization. This can be helpful for something like later stages of dealflow or fundraising where there are fewer prospects, and you'd like a visual representation of those prospects, since they each get a large card, rather than just a row.

How does termination work with a Start Fund?The Start Fund Investment Lead Agreement can be terminated in one of two ways. First, the Investment Lead may decide to move the limited partner (LP) under a general partner (GP) or management ...

How does termination work with a Start Fund?The Start Fund Investment Lead Agreement can be terminated in one of two ways. First, the Investment Lead may decide to move the limited partner (LP) under a general partner (GP) or management company (ManCo) and terminate the Start Fund for a larger engagement with Decile Partners for support. Second, Decile Group may terminate the agreement if the Investment Lead fails to fulfill responsibilities, including fundraising, investing, and managing the portfolio. What constitutes "Failure to fulfill Investment Lead Responsibilities" in a Start Fund?The Investment Lead Agreement lists the responsibilities of the Investment Lead, including (i) raising capital; (ii) research and consulting relating to the deployment of capital; (iii) updating portfolio valuations; and (iv) assisting with distributions. If the Investment Lead fails in these core activities, they will be notified and given 45 days to resolve the situation amicably. What is considered a "material breach that cannot be reasonably remedied" in a Start Fund?Material breaches are breaches that impact the Start Fund or Decile Group in a significant manner. Examples include reputational damage, violations of securities laws, misappropriation of fund assets, or other violations of fiduciary duty. A material breach may lead to the immediate termination of the agreement without the time to cure of 45 days. How does the 45-day cure period process work in a Start Fund?If a breach is identified, Decile Group will notify the Investment Lead in writing and the Investment Lead will have 45 days to remedy the breach. Decile Group will check in with the Investment Lead to validate that the breach has been resolved. To cure the breach, the Investment Lead may resume fulfilling responsibilities, increase time dedication, or fix any identified issues. At the end of the 45 days, if the breach is cured, then everything will return to normal, and, if the breach is not cured, then the agreement may be terminated. If the Investment Lead is terminated, how are existing LPs and portfolio companies handled?If the Investment Lead is terminated or ceases to perform investment activities, Decile Group will return unused capital to the limited partners less the expected amount of remaining fees. The existing Start Fund portfolio, if any, will be managed by Decile Group until all portfolio companies exit or until the end of the fund's life. If terminated as the Investment Lead, how are ongoing management fees and future carried interest handled?Upon termination of Investment Lead, General Partner shall be entitled to receive Investment Lead’s future Management Fees and Carried Interest in the Fund in an amount to compensate General Partner in filling the role of Investment Lead and to cover any expenses of General Partner or ManCo due to such breach, each as determined by General Partner in good faith. This is forward-looking only (future fees/carry) and does not affect already-earned fees or carried interest. Decile Group has discretion in determining compensation amounts to be fair.  What is the dispute resolution process with a Start Fund?Parties with a dispute will first attempt to resolve the dispute through direct discussions, followed by mediation if necessary. If the dispute continues following mediation, the dispute will be adjudicated through the Delaware courts.

Here’s a concise comparison of Start Fund (Decile Group) vs. Carta Fund Administration, highlighting where Start Fund excels: • Launch Speed: Start Fund: <1 day | Carta: Weeks to months Why Start Fund Wins: Near-instant setup vs. Carta’...

Here’s a concise comparison of Start Fund (Decile Group) vs. Carta Fund Administration, highlighting where Start Fund excels: • Launch Speed: Start Fund: <1 day | Carta: Weeks to months Why Start Fund Wins: Near-instant setup vs. Carta’s longer onboarding for full fund admin services. • Upfront Costs: Start Fund: $0 | Carta: Varies, often significant setup fees Why Start Fund Wins: No initial cost makes it more accessible for new managers. • Minimum Fund Size: Start Fund: $250K-$500K | Carta: Typically $5M+ Why Start Fund Wins: Lower entry point suits smaller, emerging funds. • Support Scope: Start Fund: Full Admin (legal, tax, admin, software) | Carta: Basic Admin + Premium Why Start Fund Wins: Comprehensive, hands-off support tailored for novices vs. Carta’s reliance on expert staff. • Fee Structure: Start Fund: 5% over 2 years (10% total) | Carta: Follows LPA Why Start Fund Wins: Condensed fees provide earlier cash flow; lower carry for managers. • Ease for New VCs: Start Fund: Designed for new managers | Carta: Geared toward mid-tier funds Why Start Fund Wins: Simpler, guided path for first-time managers. Summary: Start Fund outperforms Carta Fund Administration in speed, cost, accessibility, and beginner-friendly design, making it ideal for new VCs launching small funds quickly with minimal expense.