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Fund Economics

Can a sample spreadsheet be produced for fund expenses paid yearly or over the term of the fund?

Asked by:
Community Member
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Nov 10, 2023
Following the table here: https://govclab.com/2022/11/07/managing-fund-expenses-for-venture-capitalists/

What are typical caps and best practices (which are limited and unlimited?) and for different size funds.

Also a bit confusing that something like Travel & entertainment is a fund expense but paid for by the manager (I get it, and wouldn't if it was a fund expense it would be paid for by the fund?) - can you explain?

Thanks!
1 answer
Mike Suprovici
Accepted Answer
Nov 10, 2023
The table in this blog post is a good start: https://govclab.com/2022/11/07/managing-fund-expenses-for-venture-capitalists/

There are no best practices here. Every fund is different. For example, a Deep Tech fund many need to spend a lot of money to perform heavy IP diligence on an investment and it may be justified as a fund expense. Another fund may be required by LPs to have an audit and that is also the justified as a fund expense. Finally, every fund expense has an opportunity cost because that is capital that could be deployed into a startup. Therefore, most new and emerging GPs with small fund-sizes that are optimized for the carry try to keep fund expenses to a minimum. 

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