About this episode
This episode explains the workings of venture capital funds, including management fees, cash distributions, and differences from hedge funds.
This video / episode is NOT for my usual audience, but explains how venture capital works to someone who is new to VC. We recently had new LPs invest in our VC funds, and they were not clear about how VC differs from a hedge fund. They were not clear on how they pay their cash into the fund, how the management fees and carry / performance fee work, and how we make cash distributions back to them, and how they get their money back and are paid profits. This video explains how classic VC works, how 2&20 works, and how and when distributions are made when we sell shares from IPO, M&A, or secondary transactions.
People in this episode
Host: Andrew Romans
Topics covered
- venture capital
- fund management
- investment strategies
- financial distributions
- LPs
- management fees
Keywords
- venture capital
- LPs
- management fees
- distributions
- 2&20
- IPO
- M&A
Mentioned in this episode
Organizations: venture capital, hedge fund, IPO, M&A
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