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

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May 03, 2023

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?

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May 03, 2023

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?

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May 03, 2023

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?

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May 03, 2023

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 f...

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?

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May 03, 2023

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.

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

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May 03, 2023

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?

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May 03, 2023

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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