Learn / Fund economics and portfolio construction Go to Overview 1. A fund's life, capital calls, and fees 2. TVPI, DPI, IRR, and the J curve, Pro 3. The distribution waterfall, Pro 4. Building a seed fund's portfolio, Pro 5. The math of the power law, Pro 6. Follow on, secondaries, and what LPs look for, Pro Flashcards, 0 of 17 reviewed Basic quiz Advanced quiz Terms Fund economics and portfolio construction
0 of 6 lessons
0 of 17 cards How a fund calls capital and charges fees, how LPs read TVPI, DPI, and IRR, how a carry waterfall splits the profit, and how a fund decides how many companies to back, how much to reserve, and when to follow on.
B Basic3 lessons 1 A fund's life, capital calls, and fees LPs commit money once and pay it in over years as the fund calls it. Fees are charged on a base that usually shrinks after the investment period, and recycling puts some of that fee money back to work. 9 min 2 TVPI, DPI, IRR, and the J curve LPs judge a fund by how much it has returned in cash, how much it holds on paper, and how fast. Each metric hides something the others show. 10 min 3 The distribution waterfall A waterfall sets the order in which exit proceeds go to LPs and the GP: capital back, sometimes a preferred return, a catch up, then the profit split. Whole fund and deal by deal versions time the GP's carry differently. 10 min Q Basic quiz 10 questions, 80% passes