{"id":133,"date":"2008-12-05T01:25:44","date_gmt":"2008-12-05T05:25:44","guid":{"rendered":"http:\/\/blog.payne.org\/2008\/12\/05\/what-vintage-is-your-vcs-fund\/"},"modified":"2008-12-05T01:25:44","modified_gmt":"2008-12-05T05:25:44","slug":"what-vintage-is-your-vcs-fund","status":"publish","type":"post","link":"https:\/\/payne.org\/blog\/what-vintage-is-your-vcs-fund\/","title":{"rendered":"What vintage is your VC’s fund?"},"content":{"rendered":"

Jeff Bussgang wrote a great post<\/a> about how VCs manage reserves.\u00a0 When a VC invests, they allocate (reserve) some additional amount for follow-on financing.\u00a0 For example, a company may raise $5m for Series A, but the fund will reserve $10m for Series B, C, etc.<\/p>\n

In the current climate, many reserve models are at risk of blowing up: \u00a0 VCs that assumed additional investors for later rounds may find themselves doing all the funding themselves (the “inside round”).\u00a0 Jeff makes a good suggestion for every venture-funded entrepreneur: \u00a0 understand what your investor is carrying for reserves for your company.<\/p>\n

For entrepreneurs raising new funding now (tough, but certainly possible), a closely related issue is the age (vintage) of the VC’s fund.\u00a0 Older funds are full of “reserve challenges”:\u00a0 companies readjusting their funding strategies, and becoming more dependent on inside rounds.\u00a0 In a newer funds, the bulk of the money is yet to be invested, and later investments from the fund will factor in current conditions and the realities of follow-on investors into the reserve model.<\/p>\n

For entrepreneurs today fortunate enough to have multple funding options, fund vintage is a major factor to consider.\u00a0 Newer is much better.<\/p>\n","protected":false},"excerpt":{"rendered":"

Jeff Bussgang wrote a great post about how VCs manage reserves.\u00a0 When a VC invests, they allocate (reserve) some additional amount for follow-on financing.\u00a0 For example, a company may raise $5m for Series A, but the fund will reserve $10m … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-133","post","type-post","status-publish","format-standard","hentry","category-entrepreneurship"],"_links":{"self":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/comments?post=133"}],"version-history":[{"count":0,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/133\/revisions"}],"wp:attachment":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/media?parent=133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/categories?post=133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/tags?post=133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}