Part I: Foundations and Fund Economics
Chapter 3
Fund Economics, Incentives, and the LP Relationship
A venture firm sells two products: capital and help to founders, and fund interests to limited partners. The second determines whether the firm survives. A general partner that cannot raise its next fund has nothing to invest, however good its earlier picks.
The preview ends here. The full chapter is in the book.
In this chapter
- 3.1The fund as a contract
- 3.2Fees, carry, and the waterfall
- 3.3The management company as a business
- 3.4The limited partners and the raise
- 3.5The relationship after the close