Is it common that funds charge the startup investee a fee to cover for your due diligence costs?
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Community Member
Accepted Answer
May 03, 2023
No. VCs will commonly charge portfolio companies for legal fees associated with a deal up to a cap in the term sheet, but it is uncommon to charge for due diligence fees, such as a software audit. These fees can be charged to Limited Partners as Fund Expenses versus coming from Management Fees.