Fund of Funds Fee Structure

Nov 08

adminPrivate Equity, Venture Capital , , , , , No Comments

Fund of Funds typically receive a 1% management fee and 5% carry (or carried interest).   Since funds of funds are much more scalable than a direct investment fund, they can charge a lower management fee and carry and make up the difference by quickly deploying the committed capital and raising another fund.  This allows them to quickly amass a large amount of capital under management and thus earn significant management fees.

Average Capital Required to Get a Start-up to Cash Flow Positive

Nov 06

adminStartup, Venture Capital , , , No Comments

On average start-up new ventures will require $68 million in financing to reach cash flow positive.  This capital is typically raised over 4 rounds.  Once the new venture reaches cash flow positive, in theory, it should be self-sufficient thus not requiring any further investment.