All Questions

Each investor will be charged retroactively on the date they are admitted into the fund, as if they were part of the first close. If the first close is $2.5MM with a management fee of 2%, the fees will start at $50k per year or $12.5k q...

Each investor will be charged retroactively on the date they are admitted into the fund, as if they were part of the first close. If the first close is $2.5MM with a management fee of 2%, the fees will start at $50k per year or $12.5k quarterly.  If a second close takes place 3 months into the life of the fund, bringing the new fund size to $5MM, the LPs that are part of this second close would be charged a catch up fee for the first 3 months of the fund, on the day they are admitted. This would bring the management fees to $100k per year or $25k quarterly.  In the end, each investor will have a 2% management fee charged to their Capital Account balance in the first year of the funds life. 

Generally, you desire to oversubscribe. So, you state a very realistic target, and then work to raise more. So, I would say that you are raising $20 MM, and then shoot to try and get $30 MM.

Generally, you desire to oversubscribe. So, you state a very realistic target, and then work to raise more. So, I would say that you are raising $20 MM, and then shoot to try and get $30 MM.

This depends on what you have. It is not uncommon to include: Presentation, Deal Memo, Term Sheet and Legal Agreements. It can also include any Research, Models and Bios, particularly for later stage deals. Try to make the folders as con...

This depends on what you have. It is not uncommon to include: Presentation, Deal Memo, Term Sheet and Legal Agreements. It can also include any Research, Models and Bios, particularly for later stage deals. Try to make the folders as consistent as possible with information on the deals.

Generally, you can not directly compensate for sourcing and closing money, as these are fundraising commissions that require licensing in many jurisdictions. Funds normally offer Venture Partner roles to people that help with fundraising...

Generally, you can not directly compensate for sourcing and closing money, as these are fundraising commissions that require licensing in many jurisdictions. Funds normally offer Venture Partner roles to people that help with fundraising after the funding closes.

It’s more of an exception and you should try to avoid hurdles.

It’s more of an exception and you should try to avoid hurdles.

New firms do SPVs. Established firms set up growth funds with a separate team.

New firms do SPVs. Established firms set up growth funds with a separate team.

You should offer the LPs in Fund 1 the opportunity to invest first. You will also need LPAC approval if Fund 1 has reserves. 

You should offer the LPs in Fund 1 the opportunity to invest first. You will also need LPAC approval if Fund 1 has reserves. 

Send them a PACT and don’t over-think this. It’s a LONG way between here and them wiring money. So say: Great, here is a non-binding commitment as a next step.

Send them a PACT and don’t over-think this. It’s a LONG way between here and them wiring money. So say: Great, here is a non-binding commitment as a next step.

I would not share a Deal Memo with anyone that did not sign a PACT, and the PACT has light NDA language.

I would not share a Deal Memo with anyone that did not sign a PACT, and the PACT has light NDA language.

It's more of a nice to have. In my experience, this usually causes more confusion that it's worth. First, people usually don't read them. Second, the data room should not be opened until after an LP signed a PACT for you, and at that po...

It's more of a nice to have. In my experience, this usually causes more confusion that it's worth. First, people usually don't read them. Second, the data room should not be opened until after an LP signed a PACT for you, and at that point you don't want to over-inform.

Focus on the thesis first. Once you get the thesis right, then focus on the story, then focus on portfolio construction. There is no right answer to your question, because this is dependent on your stage, and thesis. The vast majority of...

Focus on the thesis first. Once you get the thesis right, then focus on the story, then focus on portfolio construction. There is no right answer to your question, because this is dependent on your stage, and thesis. The vast majority of Fund 1s will not have follow-on because they funds are too small for example.

You can’t talk about a fund until it is closed, so having an established VC or GP as an LP does not add anything to your fundraising process. Furthermore, you should NEVER talk about LPs with other LPs, or you risk both reputational dama...

You can’t talk about a fund until it is closed, so having an established VC or GP as an LP does not add anything to your fundraising process. Furthermore, you should NEVER talk about LPs with other LPs, or you risk both reputational damage and losing LPs. Some established funds want access and deal flow, which is why they have the ability in their LPA to invest in other funds. Select LP investing is part of their Thesis and / or strategy. Making these types of investments is commonly prohibited in the LPA AND presents both conflicts of interest and fiduciary duty issues. It’s fairly uncommon to see established VCs or GPs make LP investments, so don’t waste a lot of time on this. Among nearly 300 alumni firms, I’ve heard of this happening only a handful of times.

It’s very complicated and the KYC is also very difficult. Unless the amount is very large, like $1 MM or more, then it is not worth it. The LP should convert the crypto and invest like normal.

It’s very complicated and the KYC is also very difficult. Unless the amount is very large, like $1 MM or more, then it is not worth it. The LP should convert the crypto and invest like normal.

No - a Fund does not need to finalize arrangements with specific Venture Partners at fund formation.   Typically, the Fund authorizes a Share Pool (similar to an option pool or stock plan) for future and intended Venture Partners, and a...

No - a Fund does not need to finalize arrangements with specific Venture Partners at fund formation.   Typically, the Fund authorizes a Share Pool (similar to an option pool or stock plan) for future and intended Venture Partners, and after hitting a first close, it will issue specific amounts (usually subject to vesting) using the Venture Partner Share Agreement template.  If you are a Decile Launch customer, we will prepare these agreements using the template - please contact your Venture Associate to coordinate. 

Europe has extensive laws governing general solicitation. There are pre marketing and post marketing laws. Some guidance for best practices everywhere in the world is below: https://govclab.com/2022/06/28/general-solicitation/

Europe has extensive laws governing general solicitation. There are pre marketing and post marketing laws. Some guidance for best practices everywhere in the world is below: https://govclab.com/2022/06/28/general-solicitation/

In most cases yes, and these are marketing terms.

In most cases yes, and these are marketing terms.

Unfortunately, you will not be able to calculate a markup here.

Unfortunately, you will not be able to calculate a markup here.

These platforms don’t work for LP fundraising. There are no shortcuts in fundraising unfortunately

These platforms don’t work for LP fundraising. There are no shortcuts in fundraising unfortunately

You can’t really switch the thesis on a fund mid-stream. You could launch a fund 2 with a different thesis but not in the same fund.

You can’t really switch the thesis on a fund mid-stream. You could launch a fund 2 with a different thesis but not in the same fund.

It’s not solicitation because these are lps that have signed PACTs

It’s not solicitation because these are lps that have signed PACTs