All Questions

I recommend avoiding deal by deal offers, as team members in a first time fund need to help with everything. If someone is helping with a deal, just give them less carry for the whole fund.

I recommend avoiding deal by deal offers, as team members in a first time fund need to help with everything. If someone is helping with a deal, just give them less carry for the whole fund.

Well - you’re not an emerging manger. You’re a new manager. And, sadly, many of these FoFs don’t fund new managers very often. I think you need to focus on what you can realistically close and deploy. You can always over-subscribe and yo...

Well - you’re not an emerging manger. You’re a new manager. And, sadly, many of these FoFs don’t fund new managers very often. I think you need to focus on what you can realistically close and deploy. You can always over-subscribe and you can mention that should some FoF push back on the fund-size (which is really just a NO in disguise). Say: Great - we’re open to oversubscribing and our model allows for that. And, we’re open to it if we bringing the right partner onboard.

If your deck is already awesome, then you can test ideas like this. Otherwise, focus on making the core deck awesome.

If your deck is already awesome, then you can test ideas like this. Otherwise, focus on making the core deck awesome.

Offer to get on a call. You need to have a pre-existing relationship and to ensure that they are wealthy before officially pitching them. If you are just getting feedback from a friend, then that is fine.

Offer to get on a call. You need to have a pre-existing relationship and to ensure that they are wealthy before officially pitching them. If you are just getting feedback from a friend, then that is fine.

It depends on the LP For HNWs a good data room is about it. Same for smaller family offices. However, for larger LPs they will reference check your portfolio, which is why your deal memos are important, as well as your legal and will ver...

It depends on the LP For HNWs a good data room is about it. Same for smaller family offices. However, for larger LPs they will reference check your portfolio, which is why your deal memos are important, as well as your legal and will verify the back office team. 

The best practice is to *not* share the names of investors with a prospect until their are signed on themselves.

The best practice is to *not* share the names of investors with a prospect until their are signed on themselves.

Yes, they will be Venture Partners. Click this link to learn more about Venture Partner Agreements: https://govclab.com/2022/03/10/venture-share/

Yes, they will be Venture Partners. Click this link to learn more about Venture Partner Agreements: https://govclab.com/2022/03/10/venture-share/

Yes - there will so many conflicts for you to have to work through, that it likely will not be worth it

Yes - there will so many conflicts for you to have to work through, that it likely will not be worth it

Just put in your fund's name. This is a non-binding document so don’t worry about it too much. 

Just put in your fund's name. This is a non-binding document so don’t worry about it too much. 

A fund manager is a professional money manager and LPs expect them to primarily focus their energy on generating returns for them. LPs are generally not enthused if a fund manager's investing attention is focused otherwise. LPAs are us...

A fund manager is a professional money manager and LPs expect them to primarily focus their energy on generating returns for them. LPs are generally not enthused if a fund manager's investing attention is focused otherwise. LPAs are usually pretty restrictive with regards to fund managers investing personal money - it makes sense. Even if a fund has an LPA that is not as restrictive, a fund manager's biggest challenge (in personally investing into deals) is how they manage this with their LPs.   For example, if a personal investment has any overlap with fund's thesis, LPs are not likely to be happy. The fund manager will likely have to/should take any deal in this category to the fund's Investment Committee - and, irrespective of the result, it’s good practice to offer LPs the opportunity to invest (which will slow things down and may prevent the deal from getting done in the first place). TL:DR: a fund manager should tread carefully and err on the side of the fiduciary responsibility owed to the fund. 

Yes, you should standardize on one currency. 

Yes, you should standardize on one currency. 

Under U.S. securities laws, the issuance of securities requires registration with the SEC or an exemption from registration.   For employees who are not accredited investors, the fund should consider ways to compensate such employees tha...

Under U.S. securities laws, the issuance of securities requires registration with the SEC or an exemption from registration.   For employees who are not accredited investors, the fund should consider ways to compensate such employees that do not involve the issuance of securities unless there is an exemption such as through a stock option plan. Note that the definition of accredited investor does include "knowledgeable employees" of certain private funds.  This includes directors and certain executive officers of the private fund, or of an affiliated person of the private fund that manages the investment activities of the private fund (“affiliated management person”). This also includes employees who participate in the investment activities of the private fund or other private funds or investment companies managed by the affiliated management person.

That is a “no”, so put them on the newsletter and move on. This is a process of managing a funnel with a few hundred people on it. Any signal of a “no,” is a no.

That is a “no”, so put them on the newsletter and move on. This is a process of managing a funnel with a few hundred people on it. Any signal of a “no,” is a no.

PACTs have ~6 months effective window. They are non-binding letters of intent, and there is no set timing. As with most things, ‘time is the enemy of all deals’

PACTs have ~6 months effective window. They are non-binding letters of intent, and there is no set timing. As with most things, ‘time is the enemy of all deals’

Anything that is not a yes is a no. Move on. You need to be pursuing dozens of people simultaneously. Compliance is a relatively easy issue to solve with larger companies. He or she just needs to submit the materials for review and appro...

Anything that is not a yes is a no. Move on. You need to be pursuing dozens of people simultaneously. Compliance is a relatively easy issue to solve with larger companies. He or she just needs to submit the materials for review and approval. It can take time, but it is not hard. Hesitation means that they are not interested.

You would ‘Warehouse’ this deal into your fund. This is a common practice which makes your fund more attractive to investors. Basically, you would move your investment into your fund. LPs would invest in your fund and get a return onc...

You would ‘Warehouse’ this deal into your fund. This is a common practice which makes your fund more attractive to investors. Basically, you would move your investment into your fund. LPs would invest in your fund and get a return once a liquidity event takes place from this deal.

Generally speaking, hard no and nowhere.  A fund usually cannot solicit investors publicly, irrespective of how many closes it has completed. However, a fund can (carefully) do PR to attract entrepreneurs as investment targets for capita...

Generally speaking, hard no and nowhere.  A fund usually cannot solicit investors publicly, irrespective of how many closes it has completed. However, a fund can (carefully) do PR to attract entrepreneurs as investment targets for capital deployments. For more information, please read this: https://govclab.com/2022/06/28/general-solicitation/

For small funds, the managers frequently take distributions and do not get paid as either an employee or as a contractor. Only when the fund sizes are above $20 MM do managers start looking at salaries, and the salaries are reserved for ...

For small funds, the managers frequently take distributions and do not get paid as either an employee or as a contractor. Only when the fund sizes are above $20 MM do managers start looking at salaries, and the salaries are reserved for junior team members without carry.