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If I understood the post correctly, fresh investments typically happen at the beginning of the fund. Only half of investable money is invested so that follow-on
by alpha_squared 7y ago
If I understood the post correctly, fresh investments typically happen at the beginning of the fund. Only half of investable money is invested so that follow-on investments could be made when those portfolio companies go to raise again. It seems like the pressure might be on you, as a startup founder, if your vintage is underperforming and the fund is nearing the end of its expected return. Others in the vintage may have even had an easier time exiting, even if modestly, because they weren't encumbered with the pressure of carrying the vintage -- if that makes sense -- since they wouldn't be around near the expected return date.
- mdorazio 7y agoThat's the "Investment Period" quoted in the tweet. In the example it's 4-5 years, which means the fund needs to do its initial investments in 4-5 years from the fund start date. If you're in the later portion of this window, you're effectively going to get less time to build your business before the firm is pushing you to exit or looking to abdicate/write you off.