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Decile Base is an AI-powered knowledge base designed specifically for the venture capital industry. This new product by VC Lab provides immediate responses to complex questions related to all facets of venture capital operations based on...

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/base/16-thesis-and-presentation/2358

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Apr 17, 2024

Can you provide an example of a one-pager fund overview that I can provide a connector?

Top answer:

Here is a template 1 pager: https://fndri.com/383hpyP  One of the best ways to setup a one-pager is to distill down the main slides in your deck into separate sections on the page. 

 -  Mike Suprovici
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Yes, the interest earned from a convertible note is typically added to the cost base in the schedule of investments when the note converts to preferred. The interest is usually converted into additional shares of preferred stock at the t...

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You need to pick a model that fits your strategy, secret sauce, and stage. For example, if you invest in pre-seed, naturally you will lead to a more dispersed approach because the risk of the portfolio companies is so high. It's not unco...

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when is the right time during the program to apply for Decile Launch

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Apr 10, 2024

Min. of PACTs received? Confidence level on Thesis Feedback (after or even before feedback session)?

Top answer:

We recommend that you have ~$1m in PACTs and another $500k - $1m hard to take advantage of Decile Launch.

 -  Mike Suprovici
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General Solicitation - after close of the Fund

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Apr 08, 2024

I understand GP can talk about the Fund thesis publicly after the fund is completely closed. What is the case when Fund 1 and Fund 2 thesis are the same and GP will be starting to raise Fund 2 soon?

Top answer:

In this case, you can talk about Fund 1 publically but not Fund 2.

 -  Mike Suprovici
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Venture Partner Carry percentage

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Apr 07, 2024

A potential Venture Partner, tells me they can help me raise 30% of my target.  I know I cannot give them cash or an earning proportional to the amount they raised. Is a percentage of carry the only compensation option? How much would be a reasona...

Top answer:

Venture Partner claims and reality often do not match up to reality. As a result, most Venture Partners are terminated by Managing Partners. So, use the Venture Share agreement and place a six month cliff on the Carried Interest venting....

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Does the UAE follow the same types of regulations on solicitation of a venture fund as does the US?

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Apr 04, 2024

What differences do I as a need to be aware of as a new fund manager based in US, talking to a US person working in the UAE?

Top answer:

You might find this article generally helpful regarding General Solicitation: https://govclab.com/2023/11/22/general-solicitation/ While we can't speak specifically to the UAE, the answer may be highly dependent on the nature of a relat...

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fund_details.close_at

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Apr 04, 2024

How does one update "fund_details.close_at" that gets shown in a PACT email template?

Top answer:

To update the "fund_details.close_at" variable in Decile Hub, you need to navigate to the Fund Admin section called "Entity Management" in the Back Office. However, this section is only available to Decile Partners customers. Lastly, to ...

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How to solve for the CEO problem in venture studio?

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Apr 02, 2024

Had a meeting with a qualified LP - he was optimistic about the product side but he was unsure how to solve for the CEO problem in the venture studio. He said founders vastly underestimate founders and you wont be able to find a CEO who really dig...

Top answer:

Recruiting CEOs is one of the biggest challenges for venture studios. An effective way to solve this is for the Venture Studio to be narrowly specialized in one vertical. This way, the studio can build the expertise, systems, and strateg...

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What are the most common alterations to the traditional 2/20 compensation model seen in healthcare funds?

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Mar 29, 2024

I asked Decile Base the following question and it responded, "I can't confidently answer this question, please start a new Decile Base post to have this question answered." Below is my question.  What are the most common alterations to the tradit...

Top answer:

LPs are most familiar with the 2/20 model. If you deviate from this, you will struggle to raise money, especially as an emerging manager. There are many areas to innovate as an emerging manager. Innovating on the standard fee model is no...

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What assurance does an LP have that the GP will not call capital faster than over the promised investment period of 3-4 years?

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Mar 26, 2024

An propective LP wants some assurance that their commitment will not be called substantially faster than the proposed 3-4 year investment period. What's the best way to address this contractually in the LPA, and in practice?

Top answer:

There is nothing contractually in the LPA that prohibits a GP to call capital as needed and a GP shouldn't make promises or capital call schedules since they have no definite way of knowing how their deal flow and investment needs will b...

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What's the ideal way to identify quality connectors within my network?

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Mar 24, 2024

My experience with connectors is limited, and it's unpredictable to determine which contacts might be good connectors in advance. Those I initially thought could be good connectors sometimes didn't fit the bill. How can I identify who to approach?...

Top answer:

The best connectors are already 'supporters' of you or your fund or both. As a result, they naturally want to help you on your missions without anticipating something in return. To better help you triangulate on the right archetype, try ...

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Should a VC firm avoid investing in public benefit corporations?

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Mar 23, 2024

What terms should we look out for that are particular to PBCs?  Does having PBCs in a portfolio cause concern for LPs?

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Not necessarily. Typically public benefit corporations (PBC) are taxed as a corporation like a C-Corp.  That being said, a PBC status may make it more difficult for the company to secure capital. This is because the founder has to expla...

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What is the Monte Carlo Simulation and how does it help to model the probability of success during due diligence?

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Mar 21, 2024

I often see various Excel-generated models being included in data rooms.  These models are referred to as a "sensitivity analysis" of various sorts and typically display probability outputs.  I do not understand the significance and how the models...

Top answer:

Fund managers often show various scenarios for how the fund may perform relative to the investment strategy. As an LP, it’s critical to understand the assumptions behind those projections, because models are rarely 100% accurate. For exa...

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Best conferences for new LPs?

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Mar 20, 2024

What are some great conference recommendations that would benefit new LP investors? Especially ones interested in emerging managers. Thanks!

Top answer:

Here is a list of top GP - LP events: https://govclab.com/top-gp-lp-events-in-2024/ Most conferences are a mixed bag both for LPs and GPs. We are working to fix this, and are planning to host a new Decile Summit this year. Typically, th...

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Top answer:

When LPs request a reference, they typically want the name and email rather than a reference letter. However, if you do plan on having a formal reference letter, ideally you want a founder and a co-investor documenting how you helped a ...

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How do I get an api key?

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Mar 14, 2024

I want to be able to use the Decile Hub API. How can I generate a new access token?

Top answer:

Decile Hub API keys are available from Hub Settings > API > API Tokens Not all Hub users have access to the API. If you are on a free Hub plan and want to upgrade to be able to use the API, contact your account rep or support.

 -  Travis Giggy
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Does a post money SAFE got diluted with the Series A?

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Mar 14, 2024

I would like to know the step-by-step process. Scenario: I invested in the pre-seed round via a post-money SAFE of $100k at a $1M post-money CAP valuation. The startup reached Series A and raised $5M at a 50M valuation. How much company partici...

Top answer:

There are a lot of factors at play here. For example, if the company raised an additional SAFE after your investment, the dilution scenario will be different. It also depends on the terms of the Series A. Consider using this Cap Table an...