Purpose. How venture capital firms raise money and keep their investors: who the limited partners (LPs) are, how a VC fund is marketed and closed, the economics that sit between gross portfolio returns and what LPs actually receive (management fees, carried interest, reserves, recycling, GP commitment), and the post-close relationship (reporting, capital calls, LPAC, re-ups). Written for GPs raising Fund I through Fund V, for LPs underwriting them, and for founders who want to understand why their investors behave the way they do.
What the study covers
- 1Overview: venture is a business of raising money twice
- 2How it works
- 3Fund economics and key numbers
- 4Landmark funds and moments
- 5Pitfalls
- 6How an expert thinks about it
- 7Glossary
- 8Related sections
Technical exhibits
Worked examples, checklists and case studies included with this study.
Fund Economics Worked Example
A fully reconciled $100M seed/Series A fund: fees, expenses, reserves, recycling, a year-by-year whole-fund waterfall, net IRR/TVPI, carry and hurdle sensitivities, a deal-by-deal clawback example
LP Diligence and Lpa Terms Checklist
The questions an institutional LP asks a VC manager, plus the LPA and side-letter terms that matter, with market ranges