Fund Recycling Moves the Needle for Both LPs and GPs. Here’s How.
Laura Thompson and Hillary Cook
For as powerful of a mechanism as fund recycling can be, we believe it is an under discussed strategy in venture investing. It can transform a good fund into a great fund, and a great fund into an even better one.
Metrics that Matter Most for Investors & Limited Partners
Benjamin Hoffman
Finding your north star metric as an investor can be confusing. Do you care more about consistent cash flows overtime or a large lump-sum payment later in the future? Do you care about total cash returned or a risk-adjusted rate of return? Even the most experienced investors have trouble keeping track!
In this fantastic Twitter thread from Magdalena Kala, she shares the family office perspective on pre-fundraising, GP commit, LP decision-making, and post-close must-do's.
VC is Performing Better Than Ever. Why Are so Few First-time Funds Being Raised?
Pitchbook
2020 was a record year for venture fundraising, with nearly $80 billion of fresh capital, and this year is on pace to crack $100 billion. But fundraising by first-time managers hasn't been keeping pace with that growth.
Capital Gains Taxes May Be Coming, But Probably Not For Emerging Managers & LPs
Chris Harvey
There's been lots of chatter lately regarding the QSBS exemption in Biden's tax plan and what the downstream effects on early-stage investing might be. Here's the explainer you need to understand this extremely complex (yet important) topic.
“How does a venture firm ‘do’ ESG with early-stage startups?” This is a common question from venture firms, limited partners, academics, and the media — and the answer is, well, not so obvious despite a craving for simplicity.
Should You Give an Anchor Investor a Stake in Your Fund’s Management Company?
David Teten
Raising capital for a new fund is always hard. Should you give preferential economics or other benefits to a seed anchor investor, who makes a material commitment to the fund?
Here are the top reasons according to one LP. In a fantastic Tweet thread, Sam Ettelaie of the British Business Bank parses through what makes an LP push pause on a potential investment with a GP.
"LP" can mean many things in practice, so it's critical to differentiate between varying LP profiles. This Tweet thread by Monique Villa breaks down thinking through varying incentive structures & preferences of HNIs, Family Offices, Institutional and Corporate LPs.
Why Institutional Investors Should Double Down on VC
Dan Malven
Half of all VC funds launched between 2009-2017 generated returns to investors that outperformed the S&P 500 and Russell 2000 net of all management fees. The conventional wisdom of only 5% of VC funds being good investments is off by an order of magnitude.
OpenLP is an initiative of Sapphire Partners, the LP arm of Sapphire Ventures. Sapphire Partners invests in early-stage, technology-focused venture funds from an evergreen-like capital structure.
Not a subscriber to the OpenLP monthly newsletter?
Sapphire Ventures, 3408 Hillview Ave, Palo Alto, CA 94304, United States
