All Questions

You/your fund admin, will need to re-verify LPs after a certain time period to ensure they are accredited investors. Very large LPs are not going to be comfortable disclosing their financial or tax information and it's very likely that t...

You/your fund admin, will need to re-verify LPs after a certain time period to ensure they are accredited investors. Very large LPs are not going to be comfortable disclosing their financial or tax information and it's very likely that they will pass on investing in your fund.

The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. Additionally investing in Section 1202 Qualified Small Business Stock could eliminate any tax burden for non-corporate LPs.

The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. Additionally investing in Section 1202 Qualified Small Business Stock could eliminate any tax burden for non-corporate LPs.

Try to avoid telling LPs who else is investigating. It's bad practice to name drop. You just don't know if they like each other.

Try to avoid telling LPs who else is investigating. It's bad practice to name drop. You just don't know if they like each other.

A Delaware 3 entity structure is strongly recommended if your goal is to build an enduring VC firm. 

A Delaware 3 entity structure is strongly recommended if your goal is to build an enduring VC firm. 

If the contact that you asking for feedback from is not excited about what you are doing and not engaged to learn more, then your Thesis is not good enough. Most of the time, specific feedback is not useful. Measure success of your Thesi...

If the contact that you asking for feedback from is not excited about what you are doing and not engaged to learn more, then your Thesis is not good enough. Most of the time, specific feedback is not useful. Measure success of your Thesis by their engagement. If they are not a “yes,” then they are a “no.” Paul spoke about this in the webinar today.

Ideally 0% of fund capital is laying around in cash before deployment into an investment. If you have a lot of money in your bank account you messed up.

Ideally 0% of fund capital is laying around in cash before deployment into an investment. If you have a lot of money in your bank account you messed up.

Your operations will be outsourced to vendors like Decile Partners. Also, don’t work with people you don’t know really well.

Your operations will be outsourced to vendors like Decile Partners. Also, don’t work with people you don’t know really well.

$100k - $250k is pretty normal for a 1st closing. It’s hard to predict the close rate because it really depends on your thesis and pitch.

$100k - $250k is pretty normal for a 1st closing. It’s hard to predict the close rate because it really depends on your thesis and pitch.

No - it is not common for venture partners to be compensated with both a fixed amount per deal in addition to carry. The compensation is typically only carry. 

No - it is not common for venture partners to be compensated with both a fixed amount per deal in addition to carry. The compensation is typically only carry. 

No we don’t. It’s a non-binding letter of intent. So just, update it to your local jurisdiction and remove US specific language as first step.

No we don’t. It’s a non-binding letter of intent. So just, update it to your local jurisdiction and remove US specific language as first step.

Potentially, however you will need to be careful of potential conflicts of interest. These may need to be managed via an additional agreement - otherwise it may not be a good idea to proceed.  If the charity provides separate additional...

Potentially, however you will need to be careful of potential conflicts of interest. These may need to be managed via an additional agreement - otherwise it may not be a good idea to proceed.  If the charity provides separate additional legal agreements, we would strongly recommend having an expert fund attorney review before signing anything. There may be implications for your Fund (or for tax purposes) that may arise. 

VC Lab and Decile Partners strongly recommend the following: • 10% is the minimum first close target size for funds that are $10m or larger.  • 20% is the minimum first close target size for funds under $10m.  The key is to get the fund...

VC Lab and Decile Partners strongly recommend the following: • 10% is the minimum first close target size for funds that are $10m or larger.  • 20% is the minimum first close target size for funds under $10m.  The key is to get the fund operational and to be able to fund its warehoused deals. Sometimes a fund may have to do a smaller 1st close of just shy of 10% so that it can get operational. If the choice is between being operational and reaching the desired amount, being operational is by far the most important (if within striking distance). Attempting to do a first close significantly under these targets (particularly for a fund under $10M), may leave a fund unable to pay organization expenses and/or fund warehoused deals (to say nothing of deploying capital or how LPs might view things). TL:DR - don't do it. 

You will not be able to predict your schedule until you do a first close. Before that, you can assume a 25% capital call on first close LPs. You will do the same on all future closed LPs (but not the LPs who you have already called capit...

You will not be able to predict your schedule until you do a first close. Before that, you can assume a 25% capital call on first close LPs. You will do the same on all future closed LPs (but not the LPs who you have already called capital on before), until the entire $5m is closed. Then, you are free to set a new schedule because all LPs have been equalized.

For any fund over $5 MM, syndicates are a waste of time. They take an enormous amount of effort to close and to manage, and they don’t raise sizable amounts of capital. For example, it’s not uncommon to spend hundreds of hours, $50,000 U...

For any fund over $5 MM, syndicates are a waste of time. They take an enormous amount of effort to close and to manage, and they don’t raise sizable amounts of capital. For example, it’s not uncommon to spend hundreds of hours, $50,000 USD and 6 months to raise less than a million.

If most of your investors and investments are in the US, then don’t bother looking at a Cayman subsidiary or shell. The advantages of these tax havens have been degraded as a result of expanding KYC and taxation regimes.

If most of your investors and investments are in the US, then don’t bother looking at a Cayman subsidiary or shell. The advantages of these tax havens have been degraded as a result of expanding KYC and taxation regimes.

As a general rule, the fund reimburses fund formation expenses, which tend to be legal expenses, and the fund does not reimburse other setup expenses, such as marketing. Pre-marketing is also highly regulated in most jurisdictions, so fu...

As a general rule, the fund reimburses fund formation expenses, which tend to be legal expenses, and the fund does not reimburse other setup expenses, such as marketing. Pre-marketing is also highly regulated in most jurisdictions, so funds tend to avoid marketing until after the fund is fully closed with 100% of the capital committed.

The best practice is to have a high minimum, but also to increase the minimum for each close as a closing strategy. With a $10 MM fund, the minimum for the first close might be $50K for friends moving to $100K for normal investors. By th...

The best practice is to have a high minimum, but also to increase the minimum for each close as a closing strategy. With a $10 MM fund, the minimum for the first close might be $50K for friends moving to $100K for normal investors. By the second close, the minimum might commonly be $250K.

If you trust the person, and you know who they will forward it to, then yes. If not, it’s not worth it because then you will always have to audit your mailing list to ensure you want everyone on there.

If you trust the person, and you know who they will forward it to, then yes. If not, it’s not worth it because then you will always have to audit your mailing list to ensure you want everyone on there.

It’s not really going to build your credibility in the market. Your brand and your experience will do that. Also, they will not make investment decisions on your timeline, most likely, because they have to get approvals etc… There are ot...

It’s not really going to build your credibility in the market. Your brand and your experience will do that. Also, they will not make investment decisions on your timeline, most likely, because they have to get approvals etc… There are other ways to build a relationship with them besides doing co-investments that will yield just as good of an ROI. In my personal opinion, this is a distraction right now.