Yogesh Kabirdoss’ Post

Venture Capital Fee Economics - Guide For Aspiring Venture Capitalists There are three common types of fees associated with Venture Capital Funds (excluding Carry): 1️⃣ Setup Fees 2️⃣ Management Fees 3️⃣ Organizational and Administrative Fees Setup and management fees are usually capped at 1.0% of committed capital or actual cost, whichever is lower. Management fees, ranging from 2.0-3.0% annually depending on fund size, can be structured in various ways, affecting TVPI despite identical MOIC 🤷🏻♂️ The median lifetime fee for a VC fund is 21.38%, including all fees. Understanding fee structures in venture capital is crucial as they directly impact a fund's performance. Here's why: The way General Partners (GPs) structure fees affects how much capital they can actually deploy into their portfolio companies. This, in turn, influences the Total Value to Paid-In (TVPI) ratio, even when the Multiple on Invested Capital (MOIC) remains the same. To illustrate this, let's consider five different fee structures: → A flat 2.0% management fee on committed capital during the investment period, switching to 2.0% on invested capital during divestment. → Starting with 2.0% on committed capital during investment, then gradually stepping down by 0.25% annually on invested capital during divestment. → Front-loading with a higher 2.5% on committed capital for investment, maintaining 2.0% on committed capital during divestment. → Beginning at 2.5% on committed capital for investment, then gradually decreasing by 0.25% annually on committed capital during divestment. → A more complex structure: 2.5% for years 1-2, 2.0% for years 3-5 on committed capital during investment, then sharply dropping to 1.00% on committed capital during divestment, with 20% recycling allowed. Each of these structures will result in different amounts available for investment and, consequently, different TVPI outcomes. This highlights why investors and GPs need to carefully consider fee structures when evaluating or setting up VC funds. Check out the attached document for more details. 👇 If you find this helpful - please like, comment and share in your network. 💫 For more insights, check out my free newsletter and Join 62000+ founders & investors: https://lnkd.in/dFyTK7RW . Thanks, Marc Penkala for sharing this. #startups #vc #venturecapital #funding #founders #investors #angelinvestors #fund #tech #ai #founder

The global venture capital (VC) market showed signs of recovery in 2024, with total investments rising by 5.4% to $368.5 billion, up from $349.4 billion in 2023. Despite this rebound in capital flow, the number of deals dropped significantly, painting a nuanced picture of the state of venture capital in a post-pandemic, economically uncertain world. https://bit.ly/4h7AFzf

Why Venture Capital Is Poised for a Rebound in 2025. U.S. venture capital investment activity in 2024 is up year-over-year, while M&A is also expected to grow in 2025. https://lnkd.in/gqxXQ7UY #xelleventures #vc #empoweringwomen

CY2024 ended with Private Equity - Venture Capital (PE-VC) investments of $31.1 billion, the lowest since CY2019 in India. The cumulative investments were down by 5.5% when compared with CY2023, which accounted for $32.9 billion, the second lowest in the past six years. However, the number of deals exceeded 1,000, from 993 a year ago (in CY2023). The PE investments compiled exclude those from the real estate sector. December recorded an investment of $2.2 billion as of Dec 27, 2024, data released by research firm Venture Intelligence has revealed https://lnkd.in/gJ5quZfY

Investments by private equity - venture capital (PE-VC) companies could be lowest in Calendar Year 2024. Multiple factors including decline in mega deals exceeding $100 million, global geopolitical implications and other factors blow contributing to the overall dip in PE-VC investments. https://lnkd.in/giGqhv_X

"On the 15th August 2024 the Minister for Enterprise, Trade & Employment announced a new Seed & Venture Capital Scheme with an increased allocation of €250m to be committed over the lifetime of the Seed & Venture Capital Scheme (2025-29) (the “Scheme”)." "The First Call seeks to invest up to €100m and will target funds with strategies across two particular stages: (i) Seed stage funds where the majority of the fund (50%+) is to be invested in seed stage rounds. EI may represent up to 70% of a fund, however, EI will aim to favour funds where leverage can be delivered; and (ii)Series A/+ stage funds where the fund is invested at Series A / A+ stages. EI may represent up to 50% of a fund at this stage, although increased leverage will be an ambition under this call." "Venture fund managers should note that, should they be successful, the following will form contract terms in the investment agreement entered into with EI: - The manager will invest an amount equal to twice EI’s net commitment into Irish companies. - EI invests on a pari-passu basis, with the private sector equally sharing the risk and reward. - EI will expect to be represented on the fund’s Advisory Committee as an entitlement of any commitment to a fund." This sounds like an exciting scheme. Take a look at the full document in the link: https://lnkd.in/e-4-YUnB What do you think? #startups #seed #VC #funding #seriesA #investment #fund #enterpriseireland

The value of venture capital (VC) investment in Scottish start-ups increased 14% in the final quarter of 2024, according to KPMG’s latest Venture Pulse report.

Q1 2024 Venture Monitor: The venture capital landscape has demonstrated remarkable resilience in the first quarter of 2024, despite facing continued economic uncertainties. The latest NVCA Venture Monitor reveals insightful trends that shape our understanding of the current state and future directions of venture capital investment in the US. Key Highlights from the Report: 1) Investment Trends: With $36.6 billion invested across 3,925 deals, the venture ecosystem continues to adjust to the macroeconomic shifts observed over the past few years. The capital intensity reflects a cautious but strategic deployment focusing on high-potential opportunities. 2) Sector Focus: Significant activities in fintech and healthcare indicate a keen investor interest in sectors propelled by technological advancements and enduring market needs. 3) Policy Impact: Emerging legislative frameworks, particularly around AI and R&D, could redefine competitive dynamics and operational modalities for startups. 4) Regional Dynamics: The Bay Area and New York continue to lead in deal flow, showcasing their pivotal roles as hubs of innovation and venture activity. PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/ejp-Bhnu

Today, we're pleased to present the Aumni Venture Beacon: 1H 2024 Report. The Aumni Venture Beacon is our biannual report on the state of the venture capital market. We leverage data derived from legal documents underpinning equity financings to provide in-depth insights on valuations, the pace of financing, deal structures, follow-on investments, secondaries, and more. The first half of the year saw signs of improvement in the market but it continued to be a challenging period. Our latest report examines the mixed dynamics at play during this unique juncture for venture. Some highlights:   Pre-money valuations improved in the first half of the year, as did late-stage lead investor check sizes. Improvements in the data appear to be driven by the top end of the market. The median time between financing rounds meaningfully declined for the first time since 2022, from 25 months in Q1 to 22 months in Q2, but still remains historically elevated. Down rounds considerably increased for late-stage companies. Median markdowns remained at similar levels in the first half the year for all stages except Series B, which increased to approximately $79 million from $34 million in 2023. Follow-on investments are increasing in prevalence, and appear to be at the highest levels in the previous 10 years. Secondary transactions executed at a premium to the price per share of the most recent priced equity round increased in prevalence to 36%, from 32% the year prior. The average value of a secondary tranche is steadily increasing as well, while the relative price per share of common vs. preferred equity classes is decreasing. Go to the link in the Aumni post to get the report...

The first half of the year saw signs of improvement in the venture capital market, but it continued to be a challenging period. Our latest report, the Aumni Venture Beacon: 1H 2024, examines the mixed dynamics at play during this unique juncture for venture. Some key findings: -Pre-money valuations improved in the first half of the year, as did late-stage lead investor check sizes. Improvements in the data appear to be driven by the top end of the market. -The median time between financing rounds meaningfully declined for the first time since 2022, from 25 months in Q1 to 22 months in Q2, but still remains historically elevated. -Down rounds considerably increased for late-stage companies. Median markdowns remained at similar levels in the first half the year for all stages except Series B, which increased to approximately $79 million from $34 million in 2023.   -Follow-on investments are increasing in prevalence, and appear to be at the highest levels in 10 years.   The Aumni Venture Beacon is our biannual report on the state of venture, which leverages data derived from legal documents underpinning equity financings.   Get the report: https://lnkd.in/gxZ5kdUd