1
Fund Economics

What are the costs to manage a fund in dollars?

Asked by:
Community Member
1
0
0
Dec 22, 2023
1 answer
Accepted Answer
Feb 21, 2024
A fund has costs that are both one-time and recurring. A fund incurs one-time organizational expenses in the first year, usually in the form of legal, accounting, and state compliance expenses. Here are the vendors that typically make up those expenses.
  • State domicile filing fees (eg: Delaware)
  • Blue Sky Fees (Filed with NASAA, fees based on state where LPs reside)
  • Form ADV Filing (IARD)
  • Legal formation fees (law firm or fund administrator)
Typical estimates for organizational expenses for a small fund range from 50-100k.

A fund also incurs recurring expenses to maintain and manage the funds starting in the first year. Broadly, they are called fund administration expenses and, for smaller funds, include at a minimum the following:
  • Annual Tax Preparation
  • CPA/Accountant for bookkeeping, financial statement prep
  • Legal Operations
  • KYC/AML and other compliance expenses
  • Treasury (banking)

Typical estimates for the annual costs of a small fund range from 20-60k depending on the service provided.

Log In or Sign Up

Please Log In, or Sign Up to participate in the discussion.

Apply to VC Lab Cohort 15

Get full access to Decile Base and the Decile Hub venture platform for free by joining the VC Lab program.

Apply to VC Lab Cohort 15