You can begin an endeavor fund if you’re not rich; here’s how
For many years — — years, even — there was little concern about whether you might become a venture capitalist if you weren’t comfy economically. You could not. Individuals and organizations that purchase endeavor funds would like to know that fund managers have their own “skin in the video game,” so they have actually long needed a large check from […] The people and institutions that invest in endeavor funds want to understand that fund managers have their own “skin in the video game,” so they’ve long needed a sizable check from the investor’s own pocket before leaping aboard. They’ll collect management fees off that $50 million fund– the standard is 2% annually for the fund’s investment period– however they have to use that $1 million per year to pay for everybody’s incomes, along with lease, auditing, legal costs and back-office administration fees. Discover more about what are called management charge offsets, which investors in venture funds typically figure out to be reasonable. When Kim released his fund of funds to invest in venture managers after working for years as a VC himself, he raised $1 million in working capital from six friends to get it off the ground. He says banks with endeavor capital relationships like Silicon Valley Bank and First Republic are normally pleased to lend a fund manager a line of credit to assist him or her make capital calls, though he says it does depend on who else is involved with the fund….
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