Early stage business funding specialist
In the first video to this new series on Venture Capital, Harry defines the roles of Venture Capitalists, and outlines the setup of a VC fund. This includes a mixture of both Limited Partners (LPs) and General Partners (GPs). He further goes on to discuss how each of these stakeholders are paid.
In the first video to this new series on Venture Capital, Harry defines the roles of Venture Capitalists, and outlines the setup of a VC fund. This includes a mixture of both Limited Partners (LPs) and General Partners (GPs). He further goes on to discuss how each of these stakeholders are paid.
10 mins 5 secs
Venture capitalists provide investment into early, seed-stage companies with high potential for growth with the expectation of huge profits. The venture capitalist realises return for their investors through the differential between the equity they purchase at an early stage of the company’s lifecycle and the price they receive for it upon sale.
Key learning objectives:
Describe venture capital
Describe the setup of a VC fund
Understand how the general partners of VCs make money
Understand how firms split the carried interest between individuals
The VC fund consists of the following:
A key challenge for a fund structure is to align the interests of the LPs and GPs, so most venture capital firms are rewarded through the ‘two-and-twenty’ model.
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