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location of the VC fund as per VC Lab template - what if the team is distributed?

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Jun 30, 2023
  • Question to VC Lab faculty and all: what if the GP team (3 partners) are residing in the following places: one in San-Francisco, the second in London, the third in Miami. Just to remind everyone, the template thesis as per VC Lab model assumes in the Country/City section that the whole GP team lives in one single location and does not seem to encompass the possibility of a distributed team of GPs and investment managers. This is how is is described in the curriculum article (https://govclab.com/2021/09/15/venture-capital-investment-thesis) [Country / City] This is the city or country where the New Managers are living or plan to live while running the fund. Now, most funds have a life of at least 10 years, so make sure to pick a city or country where you and your fellow New Managers plan to be for some time. In addition, if you are living in a large country, then it is better to specify a city or region. “East Coast” is better than the United States.

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Accepted Answer
Jul 01, 2023
For distributed teams, pick the country or region where most of the active team members are located and where most of the deals are being done. If one team member is likely to be the most active in the team, then you can also pick the city where that team member is based. 

It should be noted that distributed teams in venture face a harder operating environment that may negatively affect returns. For example, deal decisions for the top opportunities need to be made quickly, and time zone differences can slow decisions down. In addition, partners may have different tax and regulatory burdens based on where they live, which will impact the fund operating costs and overhead. Lastly, since venture teams normally last 16 years or more, the required cammaraderie can be hard to build and develop when people live far away from one another. 

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