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When I was fundraising for my startup, after pitching I always emailed to ask about the LPs and if there's any Saudi/oil money in the pool. More than 10 firms j
by neom 6y ago
When I was fundraising for my startup, after pitching I always emailed to ask about the LPs and if there's any Saudi/oil money in the pool. More than 10 firms just ghosted me after that email, potentially because they think it's poor form to ask about LPs. (edit:We were still able to raise over $3.5MM seed though, so don't necessarily let asking put you off.)
- epc 6y agoAm an LP in a couple of tiny funds…a lot of the funds have verbiage to the effect that the GP will not reveal any information about LPs except as required by law (I'm not saying that's what happened here, and the firms should have just responded that they don't disclose information about their LPs rather than ghosting you). There's also typically verbiage restricting what LPs can reveal about the fund, a recent one requires divesting from the fund if the LP becomes subject to FOIA, for example.
- mrweasel 6y agoIs it also possible that asking about the LPs, and especially saudi influence, could indicate that the founders has morals that could be “annoying” down the road?
- epc 6y agoPossibly. I mean, I'm a stereotypical East Coast liberal "elite SJW" so the founder's question would have been perfectly acceptable to me (if I were the GP of the fund). I would say that the closer a fund is to one of the coastal centers of influence …the more complex and restrictive the partnership documents have been.
- deleted 6y ago[deleted]
- dalbasal 6y agoAnything's possible... unreturned phone calls are hard to reach conclusions from. Here's a Douglas Adams quote: "I don’t know if I’m right in thinking this, but I only have silence to go on, which is always a poor source of information."
- vmception 6y agowell the point is that you wouldn’t know its standard verbaige industry wide your LPs can just be two neighbors that dont like each other you can make up whatever helps you sleep at night its just not that complicated
- HenryKissinger 6y agoWhat's a LP?
- atestu 6y agoLimited Partner. The people who invest in Venture Capital funds
- jxf 6y agoA VC firm has general partners (GPs) who own the firm and manage the money and funds. It may also (and usually does) have limited partners (LPs) who invest money in one or more funds but don't play any management role.
- jacquesm 6y agoAnd, more importantly, who have no say in how their money will be invested.
- gumby 6y agoYou got a couple of technical replies (which are correct) but the answer what you are looking for is that they are the VC’s customers. They pay the investment firm to invest their money, typically 2% of funds invested annually plus 20% of any realized profits.
- smashah 6y agoUsername does not check out
- dzolvd 6y agoI'm guessing the people downvoting don't know about "The Line"
- yowlingcat 6y ago> potentially because they think it's poor form to ask about LPs. It is, but I'm not sure it's for the reasons you are implying. First and foremost, Saudi money and oil money is an enormous part of global wealth /full stop/. That deep degree of intermixing happened decades ago; there's no putting that cat back in the bag. Asking a question like this to VCs who you are ostensibly trying to make a good first impression upon is akin to telling someone that you don't have sex on the first date. Perhaps you don't, but phrasing it that way is a seriously tonedeaf way to signal it. If your primary motivation as a founder is to raise "untainted" money rather than money on good terms and from partners who can help you, I wonder whether you should be fundraising for a VC funded startup at all. This isn't meant as a dig at you -- I just think that the VC funded startup path is often considered a default path, and there are a lot of founders with amazing things to offer the world that might benefit from alternate financing more than VC. If you're concerned about LP fund sources for VC, then alternate funding may be something worth considering.
- ganstyles 6y agoOne can care about fundraising for their startup and care about raising untainted money without it being one's primary concern. Then you move the goalposts a little more and essentially say that you shouldn't be concerned with funding sources at all. The latter point especially seems amoral. It's all a bit of a straw man. I'm curious what motivations are backing your reasons for advocating for this position?
- yowlingcat 6y agoI just think that all big money is tainted and founders should be honest about what they're raising when they raise, so there aren't surprises later. If one reads the Panama Papers, this comes into very clear detail. I guess I should add a bit more color here, which is I also don't necessarily think of this tainting as a purely moral question, as I believe it's also a logistical one. The more money is being managed by a fund, the more likely it is that some nefarious utilizations of it will come into the picture. I think of it a lot like the law of large numbers.
- neom 6y ago
- loceng 6y agoBecause fuck ethics, right?
- randomdotInt 6y agoI’m curious what your ethics say about your implicit buy in to the destabilization of the environment for future generations? Everyone is a hypocrite given the right context. I didn’t really see concerned Americans setting aside their superfluous materialism to spring child political prisoners from cages. To the people of the U.S.: time to stop believing what the TV told you about your place in the world when you were children. Your military and elite are responsible for the vast majority of the environmental destruction impacting everyone. Let’s sober up a bit, shall we?