Launch an institutional-grade VC fund in a day with no up front costs. 
Meet Start Fund
Launch your dream venture capital firm.
Apply to VC Lab
Previous Post
Next Post
1

Asked by

Community Member

on

in

Fund Operations

Is it Fair for 4 GPs to Have Different Fund Shares Based on Amount Raised and Skills Added?

Does it make sense for all 4 partners to be GPs but allocate to each different share (%) of the fund based on (1) the amount each raises from LPs or brings into the fund from personal resources and (2) added value based on skills?
1 See in Base
0

Answered by

Community Member

on

It is hard to make ownership based on fundraising for a number of reasons. First, it is just hard to track who does what if the partnership is functioning well, since one partner may know the investor, yet another partner closes the investor. Furthermore, compensating directly based on money brought in is regulated in most domiciles. So, VC Lab recommends that founding team that will run the firm for decades be Managing Partners in the Management Company with ownership based on overall contribution, and everyone else be Partners or Venture Partners in the General Partner with lessor ownership in the carry of the specific fund.

Join VC Lab

VC Lab, the leading venture capital accelerator, empowers new and emerging managers worldwide to close ethical, high-performing funds in under six months. The program provides cutting-edge tools, expert mentorship, and a global network to raise more money in less time. Apply if you want to build a meaningful venture capital firm.

Apply Now
How do I start raising my first venture fund? What are the key considerations for becoming a Limited Partner?
How can I improve my emerging manager firm's deal flow? What strategies help attract institutional LPs?
How do I build a compelling investment thesis? What are best practices for portfolio management?
How can I differentiate my VC firm in a crowded market? What are the typical fund terms for emerging managers?