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it's hard to overstate how much of a game changer @AngelList rolling funds are (e.g. @shl's fund) for LPs, GPs & founders.
i nerd out on all things investing & rolling funds are the single most interesting investing related innovation i've seen in a long time.
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i nerd out on all things investing & rolling funds are the single most interesting investing related innovation i've seen in a long time.
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LP: as a solo LP i can now take 10% of my net worth & effectively build an index fund of early stage co's.
trad VCs want $100k+ if they'll take your money at all
rolling fund mins are in reach for more LPs. @shl had a quarterly min of $6,250 but inclusively flexed for some LPs
trad VCs want $100k+ if they'll take your money at all
rolling fund mins are in reach for more LPs. @shl had a quarterly min of $6,250 but inclusively flexed for some LPs
say @shl invests in 30 companies over the next few years. as an LP i'll have a slice of them all.
then say i back 4 other GPs at $5k a quarter. people like @CindyBiSV, @bentossell, @tylertringas, @ShaanVP.
now ive got a slice of 150 companies across 5 amazing managers.
then say i back 4 other GPs at $5k a quarter. people like @CindyBiSV, @bentossell, @tylertringas, @ShaanVP.
now ive got a slice of 150 companies across 5 amazing managers.
$5k a quarter x 5 managers x 2 years = $200k.
often an LP has to write a $200k+ check to get into one fund.
so i've got 5x the diversity for a similar cash outflow.
and instead of writing one big check at an unknown capital call date i know my outflows well ahead of time.
often an LP has to write a $200k+ check to get into one fund.
so i've got 5x the diversity for a similar cash outflow.
and instead of writing one big check at an unknown capital call date i know my outflows well ahead of time.
net result is almost like the VC equivalent of putting $25k into $VTI each quarter. predictability + diversification
on top of 5x'ing my exposure to early stage co's for a similar total outflow, i also get to learn from these GPs through each qtrly update
5x the learning = good
on top of 5x'ing my exposure to early stage co's for a similar total outflow, i also get to learn from these GPs through each qtrly update
5x the learning = good
so from an LP perspective rolling funds are amazing. i can predictably deploy capital into a large basket of early stage companies.
i suspect this will allow a whole new group of solo LPs to make VC a part of their asset allocation.
i suspect this will allow a whole new group of solo LPs to make VC a part of their asset allocation.
the missing piece and hopefully next big innovation would be regulatory.
i see no compelling reason why non-accredited investors shouldn't have access to rolling funds so they too can allocate into VC as well.
i hope this changes sooner rather than later.
i see no compelling reason why non-accredited investors shouldn't have access to rolling funds so they too can allocate into VC as well.
i hope this changes sooner rather than later.
last thought is rolling funds change the game for GPs & founders too
GPs can raise publicly through 506c. this should lead to more innovative & diverse GPs in the VC ecosystem
more innovative & diverse GPs should result in more innovative & diverse founders being backed = great
GPs can raise publicly through 506c. this should lead to more innovative & diverse GPs in the VC ecosystem
more innovative & diverse GPs should result in more innovative & diverse founders being backed = great
rolling funds makes too much sense not to be the future. they feel inevitable now and better than the existing model.
the next few years should be just wild in this space. hang on and enjoy the ride!
the end.
the next few years should be just wild in this space. hang on and enjoy the ride!
the end.
