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Venture Capital Fund Formation, Fund Management, and Deployment of Capital: Top Tips for VCs in 2022

Recording of a 90-minute premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, June 7, 2022

Recorded event now available

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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.

Description

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.

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Outline

  1. Issues to consider when forming a fund
  2. How to manage relationships between the fund, limited partners, fund managers, and portfolio companies
  3. How to deploy venture capital through notes or priced equity raises

Benefits

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?

Faculty

Astoor, Rita
Rita Astoor

Head of Investment Funds Partnerships & Product Advisor
Carta

Ms. Astoor is the Head of Investment Management Partnerships and a Product Advisor at Carta. She leads the business...  |  Read More

Lyons-Justus, Angela
Angela Lyons-Justus

Attorney
Smith Shapourian Mignano

Ms. Lyons-Justus represents emerging companies and venture capital firms in note and priced round financings, and asset...  |  Read More

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