Venture Capital Myths pt 1

So debunking myths about venture capital funds. This one's going to be exciting. The first thing that you guys need to know, just because Ingressive Capital may have a $50 million fund, does not mean Maya has a $50 million fund. The way that this works, once again, I'll explain, is limited partners. So HNI's, corporations, endowments, family offices, different pools of capital contribute money to a limited partnership. This is a vehicle, this is a company.

This entity then holds that capital and deploys it into startups. They exchange ownership or equity in the startup for cash until that vehicle is totally deployed. Where we get compensated, we get 2%, or it could be 3%, or it could be 1%, depending on the structure. But it's generally, you know, 1 to 3% of assets under management per year. So say you have a $100 million fund, and say you get a two percent management fee, that means every year you get two percent, or $2 million, of your assets under management, every year for ten years.

So, I don't want, ever again, for anyone to be thinking, Oh, Maya has a fifty million dollar fund? She can pay for dinner! That's not the thing!

No, I'm just kidding.