Questions a Potential Venture Fund Limited Partner Should Ask

This is going to be BIG.

Will the experience of partnering with this individual be a positive one? I have a draft deck put together for a next Brooklyn Bridge Ventures fund. I pretty much hate it. Don't get me wrong--the numbers look great. That's not it. It just doesn't really get at what's really important. I wasn't sure exactly how it missed, so I went back to first principles. What *is* really important for a venture fund?

The Experience of Being a Limited Partner in Venture Capital

This is going to be BIG.

Either way, VC funds aren't really built around creating much of an experience for their Limited Partners. Partnership investing is boring. You give someone your money and, once a quarter, they give you a report that says what they did with your money. That's because, for the most part, fund investors fall into two categories: institutions and individuals. If you're an institution, you basically care about returns and that's it.

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Limited Partner Due Diligence on Venture Capital and Private Equity Funds

David Teten

Similarly, our limited partner investors have their own due diligence standards, and we manage HOF Capital to keep in line with their standards and expectations. Ask on what KPIs each Partner is evaluated. As a VC, I have a standard due diligence list for companies I’m reviewing.

Limited Partner Due Diligence on Venture Capital and Private Equity Funds

David Teten

Similarly, our limited partner investors have their own due diligence standards, and we manage HOF Capital to keep in line with their standards and expectations. Ask on what KPIs each Partner is evaluated. As a VC, I have a standard due diligence list for companies I’m reviewing.

VC Governance FAQ: (8) How can a limited partner exit from a VC fund?

Pascal's View

Answer: The options here are limited, and they are (1) the LP can try to sell their interest, including the obligation to fund future capital calls, to a fund that acquires secondary interests. It is far less disruptive to the GP and to the GP-LP relationship for the exiting partner to sell to a secondary buyer, but these buyers are totally financially driven and are going to get the best deal possible for themselves.

VC Governance FAQ: (10) Are limited partner defaults on capital commitments triggering a wave of lawsuits in the venture industry?

Pascal's View

This is the last in our series of 10 frequently asked questions from investors in venture capital partnerships. Susan Mangiero , CEO of Investment Governance’s Fiduciary X , asked me the following: Question: I’ve read that some GPs are suing LPs for not making capital calls.

VC Governance FAQ: (6) Are contract terms in partnership agreements shifting in favor of institutional Limited Partners?

Pascal's View

This is the sixth in our series of ten frequently asked questions from investors in venture capital partnerships. Susan Mangiero , CEO of Investment Governance’s Fiduciary X , asked me the following: Question: You had some thoughts about contract terms.

Friday Funism – Favorite Future

View from Seed

sometime back in 2010 or early 2011) one of the limited partners we met with asked us what our “favorite future” was for NextView. Another phrase we use internally at NextView pretty often is that of a “favorite future”. Early in NextView’s history, when we were raising our first fund (e.g. We were excited to talk about our vision and aspirations for the new VC firm we were building, but also intrigued by this as a general question.

Austin-based Next Coast Ventures Raises $85 Million Fund

SiliconHills

The fund was oversubscribed by $25 million and its limited partners include leading institutional investors, funds of funds and family offices. Next Coast Ventures announced Thursday that it has closed on its debut fund at $85 million. Next Coast Ventures is looking at investing in deals in Austin and in the middle part of the […] The post Austin-based Next Coast Ventures Raises $85 Million Fund appeared first on SiliconHills. Austin

Does A Business Bankruptcy Hurt My Personal Credit?

YoungUpstarts

General Partner. What if the business doesn’t belong to you, but several general partners ? That being said, if partners start suing other partners and you lose and fail to pay up, that’s probably going to hurt your credit score. Limited Partner.

Micro-VC fund management and capital account statements

David Cohen

She told me that most of her Limited Partners (investors in her fund) didn’t seem to care about the frequency of capital account statements. I’m a personal investor in about 20 micro-VC funds.

Money. show me! If you want to change Venture Capital, focus on LPs. #openlp

This is going to be BIG.

In venture, it’s all about getting an opportunity to make partner and being included in the carry—the economic upside of a fund. Mentorship and the building of track records within other people’s firms is an important pathway to partner, even in your own fund.

A Slow, Painless Death

Babbling VC

The same goes for the LP's (limited partners) that invest in venture funds. We're so misled by what we often read in blogs and press stories or see on TV shows. One way or another, we tend to react to drama and they who produce content feed on this.

LP 184

Friday Funism – “Favorite Future”

Agile VC

sometime back in 2010 or early 2011) one of the limited partners we met with asked us what our “favorite future” was for NextView. Reading Time: 2 minutes. This post also appears at NextView’s blog. Another phrase we use internally at NextView pretty often is that of a “favorite future”. Early in NextView’s history, when we were raising our first fund (e.g.

Blue Collar VC

Mucker Lab

Just as entrepreneurs should aspire to raise capital from value-added, “smart money” investors, we, too, have focused on partnering with committed, long-term, institutional limited partners (LPs). We are consumed with generating great returns for our limited partners. Four years after founding and bootstrapping Mucker Capital , we are pleased to announce the close of a new $45 million fund, Mucker III.

How to Build a Startup & Understanding Venture Capital

Both Sides of the Table

Venture capitalists raise money with a goal of returning 4x the amount they raise to their Limited Partners (LPs).

Time Diversity In VC Portfolios

Haystack

And, the more funds that are raised, the more fees VCs can collect, which are contractually guaranteed in limited partner agreements.Only time will tell which approach is best or optimal. A topic that’s been on my mind a lot in 2019 is “time diversity” in venture capital funds.

High Functioning vs. Low Functioning Startup Boards

Both Sides of the Table

Here are some observations I have from this exposure: If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much.

How do venture capital firms make money by investing in startups?

Gust

The general partners of a venture capital fund make money… …by raising the bulk of the capital that the fund’s investable capital from “Limited Partners”, usually institutions such as university endowments, insurance companies and pension funds. Invested Interests capital company general partners investing IPO startup venture capital fund

What Founders Need to Know: You Were Funded for a Liquidity Event – Start Looking

Steve Blank

VC’s raise money from their investors (limited partners like pension funds) and then spread their risk by investing in a number of startups (called a portfolio). BTW, Angel investors do not have limited partners, and often invest for reasons other than just for financial gain (e.g.,

Five Questions for Vetting an Investment in a New or Emerging VC Fund

This is going to be BIG.

A lot of VC fund pitches—and I know this because I used to vet VCs for a living as an institutional limited partner at a pension fund—sound the same. If you want to learn more about how VC funds get evaluated and you’re either an accredited investor, a non-partner at a VC fund, or work on behalf of a family office, check out this event tomorrow.

How is the VC Asset Class Doing?

View from Seed

The trends described above in VC performance have an upstream effect on Limited Partners which is somewhat counter-intuitive. One of my more popular posts in recent years was a long write-up on how VC’s get measured.

LP 214

VC’s Are Not Your Friends

Steve Blank

Their fiduciary responsibility was to manage a portfolio of investments for their limited partners. At the end of the day VC’s have to provide their limited partners with great returns or they aren’t going to be able to raise another fund.

Why the Blockchain is so disruptive for venture capital

Version One Ventures

Blockchain and ICOs are giving VCs new ways to run their own businesses – from changing agreements with limited partners to allow the fund to buy tokens and currencies directly to figuring out how to safely store token and currencies. These days not a single meeting with a fellow VC goes by without talking about Blockchain and how to invest in this space. We are all a bit puzzled by how quickly this market has evolved.

Fundraising Hacks for Venture Capital and Private Equity Funds

David Teten

Historically, the process of winning capital from limited partners has been opaque. LIMITED PARTNERS’ PERSPECTIVE. Origins is a podcast about Limited Partners, created by VC Notation Capital. Denis Tse: Fund Management Craftsmanship: An LP’s Food for Thought for Emerging VC General Partners. GENERAL PARTNERS’ PERSPECTIVE. However, in the last few years a few have started to use social media and become more transparent.

Announcing K9 Ventures II – A $40M technology-focused micro-VC fund

K9 Ventures

This new $40M fund is backed by several high quality institutional limited partners including university endowments, foundations, family offices and fund of funds and key individuals. I am pleased to announce the formation of K9 Ventures II, L.P.

Announcing K9 Ventures II – A $40M technology-focused micro-VC fund

K9 Ventures

This new $40M fund is backed by several high quality institutional limited partners including university endowments, foundations, family offices and fund of funds and key individuals. I am pleased to announce the formation of K9 Ventures II, L.P.

Working Out Your Startup’s Taxes With Your Cofounder

YoungUpstarts

In a partnership, the partners share ownership of and responsibility for the financial well-being of the enterprise. When you are planning to file your taxes as a partnership, it is important to get on the same page with your business partners and co-founders.

VC Firm Creation Versus VC Firm Building

Haystack

This isn’t the only example, of course, but it’s the most recent one and illustrates what the bar is for building a team of GPs and limited partners. Earlier this year, I reflected on the difference between “fund investing” vs “fund management.” ” It’s a useful post for emerging managers, I’d recommend reading it.

Chad 90

A Deep Dive into What Has Really Changed in Venture Capital

Both Sides of the Table

Yes, VC / Startup Funding is up Massively If you look at how much VC firms have raised from Limited Partners (LPs) over the past 2 decades you’ll see that we’ve returned to a level that we haven’t seen since 1999.

The Easiest Way to Bring Diversity to Venture Capital: Raise the SEC's LP Count Limit

This is going to be BIG.

Barely 10% of the investing partners at VC firms are women and the number of investors of color is microscopic. Unfortunately, the way the Limited Partner landscape is setup and the nature of SEC rules, emerging managers are fundraising with their hands tied behind their back.

LP 91

Get 10 years of experience in 3 years running the most active venture fund in Texas

Austin Startup

You will work closely with Joshua Baer, Gordon Daugherty, Bryan Chambers, the Ventures Team, limited partners, external venture capitalists, lawyers, accountants and startup CEO’s to review legal agreements, perform our diligence checklist, and make sure transactions close in a timely manner. You will coordinate and administer the most active venture capital fund in Texas and see an insane amount of dealflow. You’ll know the inside details about almost every deal that goes down.

Details of Upfront Ventures New $400 Million Fund

Both Sides of the Table

A huge thank you to all of the Limited Partners who have entrusted us with your capital, time and reputations. Upfront’s Base As you probably know we are based in Santa Monica and as my partner Greg Bettinelli coined, we’re #LongLA.

This is the Dumbest Op Ed I’ve Read in a While

Both Sides of the Table

But I hate worse when I let down the people for whom I’ve totally committed my time to: the boards I set on, my limited partners, my colleagues at Upfront, companies that are pitching me and looking for feedback and my family.

Lessons from a Diverse Venture Capital Portfolio

This is going to be BIG.

All were backed based on the sole criteria that they had the potential to make my limited partners a lot of money. Brooklyn Bridge Ventures , the pre-seed and seed stage VC fund I run in NYC, has invested in 64 companies in the last six and a half years. Twenty-five of them have at least one female co-founder. Fifteen had co-founders over 40. Five have LGBTQ+ founders. Three teams have African-American founders. Three of the founding teams are married couples.

The Morning After

Both Sides of the Table

Long before the markets corrected my smartest professional trader friends and limited partners were telling me that many people in the market were telling me that all eyes were glued on Sept 16-17 when the FOMC meets to discuss interest rates.

Katie Rae and the Engine at MIT

David Cohen

We became a Limited Partner in Project 11 when it launched and Katie continues to mentor at Techstars regularly. Everyone who knows Katie Rae at Techstars is thrilled that she’s taken a lead role with The Engine at MIT, a new venture fund and incubator space there. Katie was the Managing Director at Techstars for our Boston program from 2010 to 2014.

This Friday at NYU-Annual Stern Private Equity Conference

David Teten

In addition, there will be 8 thematic panels: Leveraged Buyout, Real Estate, Energy, Distressed, Venture Capital & Growth, Media & Entertainment, Emerging Markets, and Limited Partners & Secondaries.

The Potential for Fraud Caused by the Unnecessary Mystery of the Family Office World

This is going to be BIG.

He knew a bunch of other VCs in NYC and seemed like a great potential Limited Partner connection. About a year ago, I received a LinkedIn connection from Richard Briggs—a Brooklyn Law Grad who spend 25 successful years at Lehman and was operating his own family office.

Upfront Ventures Raised New $280 Million Fund

Both Sides of the Table

Whereas we had four partners investing Fund IV we now have six partners actively looking at deals for Fund V. In recent years we’ve had big wins across all of our long term partners (Yves: Envestnet), (Steven: TrueCar), (Me: Maker Studios).

Shut Up and Invest? Investors Weighing in on Politics

This is going to be BIG.

It’s an entirely fair question—and the risk is that limited partners, founders, or other VCs might not want to work with me because I’m vocal about my political views. As a solo General Partner, my firm is me—and there isn’t a difference between investor Charlie and personal Charlie. Limited partners judge my investment acumen. For the last two years, I’ve been pretty vocal about politics on social media , in my weekly tech community newsletter and on this blog.

How to Break into a Senior Business Position at a Growing Startup

This is going to be BIG.

Smaller funds are always looking for limited partners and co-investors in their deals—so starting an angel group or just being willing to make such introductions in your network goes a long way. You’ve got a great resume. You went to top schools, trained at a prestigious bank/consulting firm/etc, and you’ve succeeded in the corporate world doing some important and impactful stuff. Now you want to take that skillset over to the startup world and you’ve got a lot to offer.

Don’t Give Away Your Board Seats

Steve Blank

And they have a fiduciary responsibility to their own limited partners.)