All Questions

You can find the PACT here: https://govclab.com/2023/01/30/the-pact-a-commitment-letter-to-hard-circle-lps-2/

You can find the PACT here: https://govclab.com/2023/01/30/the-pact-a-commitment-letter-to-hard-circle-lps-2/

The KPMG article is correct, capital gains are not sourced to the US and therefore will not be taxed in the US for your foreign LPs. To address your point about engaging in US trade or business, investment entities are not considered to ...

The KPMG article is correct, capital gains are not sourced to the US and therefore will not be taxed in the US for your foreign LPs. To address your point about engaging in US trade or business, investment entities are not considered to be engaged in a trade or business unless they are trading pretty much daily more like a hedge fund (venture capital and private equity do not take part in as many transactions). The income generated by the LP entity would not be considered ECI and they foreign LP would only need to pay tax in their home country.

You could ask the companies to comply with the For Progress (https://fi.co/progress) designation, and then the company would publish their results every month or quarter. You can then roll up the results into your own reporting.

You could ask the companies to comply with the For Progress (https://fi.co/progress) designation, and then the company would publish their results every month or quarter. You can then roll up the results into your own reporting.

The LP is asking for the ability to invest in future follow-on rounds into your portfolio companies. You allocate an LP a portion of your pro rata tights. This is normally offered verbally and handled by creating an SPV for each deal in ...

The LP is asking for the ability to invest in future follow-on rounds into your portfolio companies. You allocate an LP a portion of your pro rata tights. This is normally offered verbally and handled by creating an SPV for each deal in the subsequent rounds. It’s common to offer this to investors in your first close.

We don’t have examples because theses are confidential. But here is a framework to help:  Catchy subject Intro sentence announcing some great news with some sort of call to action.  Summary Section  • Section 1 summary (~5 words)  • Se...

We don’t have examples because theses are confidential. But here is a framework to help:  Catchy subject Intro sentence announcing some great news with some sort of call to action.  Summary Section  • Section 1 summary (~5 words)  • Section 2 summary (~5 words)  • Section 3 summary (~5 words)  Section 1 Paragraph  Section 2 Paragraph  Section 3 Paragraph  Closing with with reminder to call to action

No. “Fund rules” represent how you manage areas of conflict. For example, many VCs created rules that preclude them from making investments outside of their fund. “Investment criteria” represents what you look for in a company. I.e....

No. “Fund rules” represent how you manage areas of conflict. For example, many VCs created rules that preclude them from making investments outside of their fund. “Investment criteria” represents what you look for in a company. I.e. pre-seed in Italy etc…

You will be an employee, not a fund manager, and I have never seen these situations work out. As a simple test, ask them to send you an LOI plus a term sheet for the economics by next Wednesday for you to seriously evaluate the opportuni...

You will be an employee, not a fund manager, and I have never seen these situations work out. As a simple test, ask them to send you an LOI plus a term sheet for the economics by next Wednesday for you to seriously evaluate the opportunity. My guess is that this will not happen. There is a phenomenon called ‘LP Love,’ where prospective LPs will say things that shower you with love, but they never execute. You will have people promise that they will participate for 50% of your fund, and they never do anything but keep promising. So, get it signed as an LOI and in writing. Then, there is a 75% chance that this is real. Ask Rafeh Saleh about his similar experiences in the last cohort.

That is not a common term. The title signifies that the partner is in the GP, versus the ManCo, and handles fund operations. This would be for a larger fund, and not relevant for small firms.

That is not a common term. The title signifies that the partner is in the GP, versus the ManCo, and handles fund operations. This would be for a larger fund, and not relevant for small firms.

Your goal is to build relationships. Many of the folks may become connectors to LPs or invest directly. Learn about them and try to be helpful where you can.

Your goal is to build relationships. Many of the folks may become connectors to LPs or invest directly. Learn about them and try to be helpful where you can.

Read this: https://govclab.com/2022/03/10/venture-share/

Read this: https://govclab.com/2022/03/10/venture-share/

Generally speaking, ERAs must file the Form ADV within 60 calendar days of becoming an ERA - thus they generally must file within 60 calendar days of a fund's first closing, in most cases. Please see the following (Item 13 in particular...

Generally speaking, ERAs must file the Form ADV within 60 calendar days of becoming an ERA - thus they generally must file within 60 calendar days of a fund's first closing, in most cases. Please see the following (Item 13 in particular) for more information: https://www.sec.gov/about/forms/formadv-instructions.pdf

Family offices care a lot about deal flow. You will likely have pro-rata opportunities that the fund will not be able to fill. Build your pitch narrative around the fact that they will have opportunity to double down on some of your best...

Family offices care a lot about deal flow. You will likely have pro-rata opportunities that the fund will not be able to fill. Build your pitch narrative around the fact that they will have opportunity to double down on some of your best deals.

Do not register any entities until you’re ready to start closing. This is a major mistake. MAJOR. All 3 entities will need very specific operating agreements and they need to have relationships. It will be so hard for you to fix this mi...

Do not register any entities until you’re ready to start closing. This is a major mistake. MAJOR. All 3 entities will need very specific operating agreements and they need to have relationships. It will be so hard for you to fix this mistake that you will likely need to throw it way and start from scratch.

Just say that you will provide standard quarterly reporting when the fund is set up with a quantitative analysis of the returns and qualitative updates on the portfolio.

Just say that you will provide standard quarterly reporting when the fund is set up with a quantitative analysis of the returns and qualitative updates on the portfolio.

1. it should be similar, but there are other sections that are important as well that are not in your deck, such as the fund rules section 2. it gives a quick snapshot of the fund, similar to an executive summary. it does not replace the...

1. it should be similar, but there are other sections that are important as well that are not in your deck, such as the fund rules section 2. it gives a quick snapshot of the fund, similar to an executive summary. it does not replace the PPM

It appears that the limited partner is asking for there to be a penalty or catch-up fee for late entrants into the fund. You can simply response that you are not adding any penalties or catch up fees, as you your intention is to close qu...

It appears that the limited partner is asking for there to be a penalty or catch-up fee for late entrants into the fund. You can simply response that you are not adding any penalties or catch up fees, as you your intention is to close quickly and keep fund admin complexity to a minimum. With most smaller funds the costs of administering such programs can be high, and, worse, the programs scare aware qualified LPs. In general, we strongly discourage this until you are an established fund manager with top returns.