All Questions

LPs are not flexible in terms of changing portfolio construction.

LPs are not flexible in terms of changing portfolio construction.

It’s really difficult to roll in an SPV into a fund, because the SPV is a fund. 

It’s really difficult to roll in an SPV into a fund, because the SPV is a fund. 

In Delaware, if the fund is <=$10m then it’s 250 LPs. If the fund is >$10m is 99 LPs

In Delaware, if the fund is <=$10m then it’s 250 LPs. If the fund is >$10m is 99 LPs

You’re not going to be able to honor these terms because they are dependent on the company. What if the company doesn’t want them to lead? These are definitely NOT standard terms.

You’re not going to be able to honor these terms because they are dependent on the company. What if the company doesn’t want them to lead? These are definitely NOT standard terms.

Avoid anchors in Fund 1s and avoid favorable terms for any LP

Avoid anchors in Fund 1s and avoid favorable terms for any LP

You can only use valuations set by rounds of financings

You can only use valuations set by rounds of financings

No - In a high, medium, low projections approach - your low projection should be higher.

No - In a high, medium, low projections approach - your low projection should be higher.

Put 2% average on your terms page. In parentheses next to it you can briefly describe the front loading.

Put 2% average on your terms page. In parentheses next to it you can briefly describe the front loading.

Those are Org expenses so that fund will pay for them

Those are Org expenses so that fund will pay for them

You should assume that they will come from management fees. In general, it’s good practice to reduce the additional expenses to LPs.

You should assume that they will come from management fees. In general, it’s good practice to reduce the additional expenses to LPs.

You can _technically_ charge stuff like this as a fund expense, but some/most LPs would have a problem with that because that’s part of your job and they are commonly paid from management fees. So, typically those are done at the ManCo l...

You can _technically_ charge stuff like this as a fund expense, but some/most LPs would have a problem with that because that’s part of your job and they are commonly paid from management fees. So, typically those are done at the ManCo level.

Though this varies widely, each investment round would sell between 10% and 25% of the company. Best practice is to model the capital journey, tools like this one from Foresight https://foresight.is/cap-table/ are recommended

Though this varies widely, each investment round would sell between 10% and 25% of the company. Best practice is to model the capital journey, tools like this one from Foresight https://foresight.is/cap-table/ are recommended

I would not model them, no. Clawbacks are unusual circumstances that don't occur unless the fund is in trouble. Catch-ups we do not recommend.

I would not model them, no. Clawbacks are unusual circumstances that don't occur unless the fund is in trouble. Catch-ups we do not recommend.

here you go: https://foresight.is

here you go: https://foresight.is

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 Par...

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.

Exits can take longer than the standard fund life. However, typically, when extending the fund, VCs don’t charge management fees. The earlier you invest, the more likely that you may need an extension.

Exits can take longer than the standard fund life. However, typically, when extending the fund, VCs don’t charge management fees. The earlier you invest, the more likely that you may need an extension.