1

Asked by

Luke Robinson

on

in

Fundraising

Track record as a nominee of a regulated fund

Hi, our previous fund sits as a nominee of an FCA regulated fund, we manage all the investments and fundraising, they manage the reporting and compliance with the FCA to allow us to operate. This is a fairly standard structure for early stage funds in the UK but we were told that this impacts our investing track record and should consider ourselves as 'raising our first fund'. 

I have got conflicting opinions on how this impacts our track record - could anyone explain why this is potentially negative?
1 See in Base
0

Answered by

Haw Kuo

on

While we can't speak specifically as to an FCA regulated fund or being the nominee thereof - there are general principles to keep in mind.  

Typically, vehicles may not be considered as being helpful for a "first fund" if: 
  • the fund managers are not in complete control (and also own) of all of the fund's entities;
  • there is no management company (firm/brand) that will be carried over;
  • the fund is part of (or connected to) a larger structure (or regulatory regime) where there are entities involved that the fund managers do not control or own;
AngelList is one example - as investors do not own or operate the vehicles and are considered "consultants", AngelList vehicles are not considered helpful as a track record for a "first fund" (though they may be helpful for an angel investing track record, potentially). 

Join the Leaders of Venture 2.0

Our graduates are creating disruptive capital with exceptional expertise, ethical investing practices, and exceptional returns. Whether you're launching your first fund or scaling an established firm, VC Lab provides the tools, network, and support needed to succeed in today's venture landscape.

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?