Primers
Primer: Launching the Firm – Emerging Managers, Anchors and Seeders in Private Equity and Venture Capital
We are often asked about launching – by principals gaming out the spinout over a weekend, by two partners with a term sheet from a seeder and a deadline, by anchors and seed platforms building programs on the other side of the same table, and by founders three funds in […]
Primer: Estate Planning for Carry, Capital and Firm Value in Private Equity and Venture Capital
We are often asked by private equity and venture capital professionals how to approach estate planning for the economics they earn through their firms – and, nearly as often, by the firms themselves: what should a sponsor do when a partner holding significant carried interest asks to move those economics […]
Primer: Investment Limits & Manager Discretion
Private equity and venture capital funds are typically blind pools. Limited partners commit capital before they know exactly which companies the fund will invest in, which transactions the fund will pursue, which follow-on financings will occur, which exits will become available or which conflicts will arise over a fund life […]
Primer: LP Governance Rights in Private Equity and Venture Capital Funds
Private equity and venture capital funds are typically closed-ended, long-duration blind pools. In the many years following closing, the fund manager is permitted to operate and invest the fund in its discretion, as long as it stays within the guidelines codified at inception in the fund’s partnership agreement or other […]
Primer: Capital Calls, Defaults and Subscription Credit Facilities in Private Equity and Venture Capital Funds
We are often asked how capital calls work in private equity and venture capital funds. The question sounds administrative, but the answer goes to the heart of the private fund structure. Private equity and venture capital funds are typically not funded all at once. Instead, investors make capital commitments at […]
Primer: What Expenses Can a Private Equity or Venture Capital Fund Pay?
We are often asked what expenses can properly be paid by a private equity or venture capital fund. The question sounds like accounting. In practice, it is much more than that. Expense provisions define the economic boundary between the manager’s business and the fund’s business. The manager receives a management […]
Primer: Management Fees in Private Equity and Venture Capital Funds
We are often asked about the “market” rate for management fees in actively managed private equity and venture capital funds. That question sounds simple, but it is usually not just a question about the headline percentage rate. This primer discusses mainstream private equity and venture capital funds, so to speak. […]
Primer: Corporate Venture Capital Funds
We are often asked how corporate venture capital funds are structured – and how they differ from the mainstream venture capital funds we usually discuss in these primers. It is a fair question, and an underserved one. Corporate money is everywhere in the venture market in a limited partner capacity, […]