Venture Capital Fund Formation, Fund Management, and Deployment of Capital: Top Tips for VCs in 2022
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Banking and Finance
- event Date
Tuesday, June 7, 2022
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will examine the formation and structuring of venture capital (VC) funds and discuss the various relationships between the fund and its limited partners, fund managers, and portfolio companies. The panel will also discuss different ways to approach deploying venture capital and investment documents and terms, including voting rights, preferred stock, and more.
Ms. Lyons-Justus represents emerging companies and venture capital firms in note and priced round financings, and asset acquisitions. She is skilled in supporting entrepreneurs from incorporation through day to day operations, product development, and partner agreements and negotiations. In her practice supporting both companies and investors, Ms. Lyons-Justus is especially attuned to deal structures and diligence reviews so as to enable positive returns for both parties.
Ms. Astoor is the Head of Investment Management Partnerships and a Product Advisor at Carta. She leads the business development strategy and operations for Carta’s investment management services, engaging law firms, tax and audit providers, banks, asset managers, and other partners across the venture ecosystem. Ms. Astoor also works closely with the product team to build products that solve client needs. Prior to joining Carta, she was an investment funds associate at global law firms in New York City where she worked closely with venture capital, private equity, and hedge fund sponsors in forming, launching, and managing private investment funds.
VC funds are typically formed to invest in a specified industry or region. The fund's marketing documents should introduce the overall strategy, explain specific areas of expertise, and outline the types of investments used to implement the fund's strategy.
Before launching a VC fund, counsel must consider the terms of the fund offering, including capital calls, distributions and waterfall calculations, allocation of profits and losses, carried interest, preferred return, and other provisions. The fund documents must clearly define the rights and responsibilities of the manager and investors.
A VC fund should have a valuation committee or an independent third-party panel to evaluate potential investments. They should determine which valuation techniques are appropriate to a particular investment, such as revenue, DCF, DDM, net profit multiples, and EBITDA.
Capital can be deployed in various ways, including equity investments, convertible notes, or priced equity rounds. Fund managers must assess each investment and communicate the rationale to investors.
Listen as our authoritative panel examines the dynamics of VC funds, including formation, fund management, and deployment of capital.
- Issues to consider when forming a fund
- How to manage relationships between the fund, limited partners, fund managers, and portfolio companies
- How to deploy venture capital through notes or priced equity raises
The panel will review these and other issues:
- What should VC fund offering documents say about investment strategy and how the fund will be managed?
- What is "market" with regard to capital calls, distributions, carried interest, preferred return, and other key terms in the fund agreement?
- Who should be on the fund's investment committee, and how independent should they be?
- What factors should a fund consider in deciding the form its VC investments will take?
- What rights and privileges are market for certain levels of investment?
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