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What are the mechanics of 'per deal carry' for Venture Partners when the fund hasn't generated enough returns?

What are the mechanics for 'per deal carry' for Venture Partners? Specifically if the whole fund has not generated sufficient returns to pay a carry does the GP pay for the per deal carry if an exit occurs?

Top answer:

Deal by deal carry, which is not recommended, is an arrangement where the fund grants an individual, usually a venture partner, a share in the upside generated by the performance of one or more deals allocated to that individual. This is...

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Do Fund 1 Teams Remain Consistent for Future Funds or Do New GPs/VPs Join Subsequent Funds?

Does the Fund 1 team typically remain substantially the same for future Funds with the same thesis? Or is there usually a reset and new GPs/VPs can be brought aboard each time a subsequent Fund is launched?

Top answer:

Managing Partners tend to remain constant in over 90% of firms, and the General Partner team, which includes Partners and Venture Partners, frequently changes beatween funds. When there are changes, a new General Partner entity is formed...

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Does a Portfolio Venture Partner's Selective Involvement Affect the Venture Partner Agreement?

If a 'portfolio' venture partner is to work on individual portfolio investments but not necessarily ALL of them does this change how the venture partner agreement is written?

Top answer:

No it does not. Venture Partners are part time and by definition have limited bandwidth, as a result. So in this case, they can only handle a limited number of companies.

 -  Mike Suprovici
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Is It Normal to Have Venture Partners from Other Funds?

The best Venture Partners in my opinion are operators and founders. However I am considering a couple of Venture Partners that are working at other VCs but worried about potential conflict. Is it a normal industry practice to have VPs from other funds?

Top answer:

Those VPs will definitely have conflicts and the firms they work for will have to disclose this conflict to their LPs.

 -  Mike Suprovici
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Is it Common for Venture Partners to be Incentivized on a Deal-by-Deal Basis Instead of GP Shares?

Is it common to incentivize Venture Partners on a deal by deal basis rather than having shares in the GP?

Top answer:

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.

 - 
Community Member
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Do Advisory Board Members for Start-up Support Funds Fall Under Venture Partner Agreements or Other Roles?

When forming an advisory board of specific industry professionals for your fund that helps support start-ups we invest in do these advisors fall under venture partner agreements or another role?

Top answer:

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

 -  Mike Suprovici
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How does an advisor get compensated?

How does an advisor get compensated?

Top answer:

You can use a venture partner agreement. Click this link to learn more about Venture Partner Agreements: https://govclab.com/2022/03/10/venture-share/

 -  Mike Suprovici
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