PART II

 RAISING FUNDS

Raising funds is crucial to the VC firm. Without funds to manage, invest, and earn fees, the VC firm cannot operate. How and from whom do VC firms raise money? How do they convince such investors to invest in their VC funds? What terms and conditions would the investors impose on the VC firm? What management fees would they pay to the VC? How will profits from investments be shared?

These questions are answered in Chapter 4: RAISING FUNDS and Chapter 5: LIMITED PARTNERSHIP AGREEMENT. The Limited Partnership Agreement is an important document that spells out the compensation terms to the VC firm and governs the conduct of the VC firm.