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Rolling Funds - Everything You Need to Know [THREAD]
After listening to everything on the topic from the likes of:
• @naval
• @shl
• @avlok
• @APompliano
• @ShaanVP
• @HarryStebbings
• @Alex_Danco
Here's what I learned about @AngelList's Rolling Funds in 10 tweets
After listening to everything on the topic from the likes of:
• @naval
• @shl
• @avlok
• @APompliano
• @ShaanVP
• @HarryStebbings
• @Alex_Danco
Here's what I learned about @AngelList's Rolling Funds in 10 tweets
1/ First, let's understand regular venture funds.
• They're dominated by legacy Silicon Valley.
• They raise funds over multiple months.
• They cannot be publicly marketed.
• All capital must be raised before the fund is launched.
TLDR: hard to raise, manage, and access.
• They're dominated by legacy Silicon Valley.
• They raise funds over multiple months.
• They cannot be publicly marketed.
• All capital must be raised before the fund is launched.
TLDR: hard to raise, manage, and access.
2/ What is a rolling fund?
Think of them as a SaaS-like venture fund subscription.
• They can be marketed publicly.
• They can raise capital at any time.
• GPs can deploy capital on a quarterly basis.
• LPs can redeem capital on a quarterly basis.
• Fees are flexible.
Think of them as a SaaS-like venture fund subscription.
• They can be marketed publicly.
• They can raise capital at any time.
• GPs can deploy capital on a quarterly basis.
• LPs can redeem capital on a quarterly basis.
• Fees are flexible.
3/ What are the benefits?
• Founders have access to more capital and LPs in niche verticals.
• LPs are given more access to early-stage investments.
• GPs can capture all deal flow in one investment. And better yet, they can leverage their audience to market it publicly.
• Founders have access to more capital and LPs in niche verticals.
• LPs are given more access to early-stage investments.
• GPs can capture all deal flow in one investment. And better yet, they can leverage their audience to market it publicly.
4/ What's the impact on the venture landscape?
1. Democratized access to launching a micro-VC fund.
2. More angel rounds mean more competitive Series-A rounds.
3. A new industry: advertising of your venture fund.
4. A new marketplace: relative value / reputation of GPs.
1. Democratized access to launching a micro-VC fund.
2. More angel rounds mean more competitive Series-A rounds.
3. A new industry: advertising of your venture fund.
4. A new marketplace: relative value / reputation of GPs.
5/ Impact on venture landscape (cont)
5. Niche VCs raising funds to better leverage their skillset.
6. Inexperienced LPs gain access to the market (a-la Robinhood traders)
7. The entrenchment of traditional VCs as later-stage fundraisers.
8. Startups have more access to capital.
5. Niche VCs raising funds to better leverage their skillset.
6. Inexperienced LPs gain access to the market (a-la Robinhood traders)
7. The entrenchment of traditional VCs as later-stage fundraisers.
8. Startups have more access to capital.
6/ What is 506c vs. 506b?
• 506(b) is an SEC rule prohibiting public marketing of certain funds (i.e. traditional venture funds.)
• 506(c) allows for public marketing of the fund, granted the fund issuer takes steps to ensure all investors are accredited. Enter @AngelList.
• 506(b) is an SEC rule prohibiting public marketing of certain funds (i.e. traditional venture funds.)
• 506(c) allows for public marketing of the fund, granted the fund issuer takes steps to ensure all investors are accredited. Enter @AngelList.
7/ What are the fees?
• Typical fees will be 2% management fees and 20% carry.
• But the terms are flexible and GPs can tailor them however they'd like.
• For example, @ShaanVP launched a rolling fund with no management fee - and likely won't be the last to do so.
• Typical fees will be 2% management fees and 20% carry.
• But the terms are flexible and GPs can tailor them however they'd like.
• For example, @ShaanVP launched a rolling fund with no management fee - and likely won't be the last to do so.
8/ Who is running a Rolling Fund?
Here is everyone I have seen:
• @shl
• @HarryStebbings
• @APompliano
• @austin_rief
• @hazesyah
• @tylertringas
• @CindyBiSV
• @jjacobs22
• @bentossell
• @Just_Kate
• @WomenWhoTech
Who am I missing?
Here is everyone I have seen:
• @shl
• @HarryStebbings
• @APompliano
• @austin_rief
• @hazesyah
• @tylertringas
• @CindyBiSV
• @jjacobs22
• @bentossell
• @Just_Kate
• @WomenWhoTech
Who am I missing?
9/ Resources to learn more:
• @avlok w/ @APompliano: https://open.spotify.com/episode/4m8vsYq5EeQMNpGE37kNwv?si=VCPGvOSmTqmbmmn1n_Aa3Q&context=spotify%3Ashow%3A2QwpFjzJ0ZteqmMqw2xIfA
• @shl w/ @HarryStebbings: https://thetwentyminutevc.com/sahillavingia/
• Follow @RollingFund to stay in the loop
• Read this post from @minal_hasan
https://minal.substack.com/p/will-rolling-funds-roll-over-the
• @avlok w/ @APompliano: https://open.spotify.com/episode/4m8vsYq5EeQMNpGE37kNwv?si=VCPGvOSmTqmbmmn1n_Aa3Q&context=spotify%3Ashow%3A2QwpFjzJ0ZteqmMqw2xIfA
• @shl w/ @HarryStebbings: https://thetwentyminutevc.com/sahillavingia/
• Follow @RollingFund to stay in the loop
• Read this post from @minal_hasan
https://minal.substack.com/p/will-rolling-funds-roll-over-the
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- Physical growth
- Network growth
- Financial growth
- Business growth
- Intellectual growth
- Productivity growth
Subscribe
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11/ Some more links
You can browse all of @AngelList’s Rolling Fund opportunities here: https://twitter.com/AngelList/status/1303384161281949696
You can browse all of @AngelList’s Rolling Fund opportunities here: https://twitter.com/AngelList/status/1303384161281949696
