[voidmain]

VCs don't invest their own money. As an LP actually putting up capital, do you prefer your portfolio companies to be run by founders (expert in their particular business, lots of skin in the game in the form of common stock, idiosyncratic compared to your other portfolio companies' leaders, sometimes a little too conservative for a well diversified investor like you), or VC partners (expert in capital allocation, somewhat misaligned incentives, also involved in managing your other portfolio companies, likely too aggressive for an investor with actual downside like you)? It's not that obvious that the latter is an improvement.

[PhantomGremlin]

VCs don't invest their own money.

I haven't been privy to details of many VC funded companies, but the ones I saw definitely had the VC General Partners investing their personal money side by side with money from their Limited Partners. That was reflected in the names on the preferred stock certificates from day one. (Probably don't do paper stock certificates any more).

I agree with your statement that "it's not that obvious" as to who should have control, and there are good arguments both ways. My personal inclination would always remain that the people putting up the money should have the final say.

[whbk]

Yeah, they definitely put up their own money - it's also public record :)

This is how reporters know a firm is raising another fund (beyond just expecting them to every 2 years). The amount/percentage of the total fund that the partners pay in themselves varies by firm and fund.

Here's the records from Benchmark's Fund 7

Partners put up $80mm of their own cash, in a vehicle named Benchmark Founders' Fund VII, L.P.: https://www.sec.gov/Archives/edgar/data/1507661/000150766111...

They then raised $425mm from LPs through a vehicle named Benchmark Capital Partners VII, L.P.: https://www.sec.gov/Archives/edgar/data/1507669/000150766911...

So the Benchmark partners have 16% of that particular fund, though keep in mind VC funds have different economics than just a straight up equity split. 16% is pretty high compared to some other firms I've reviewed, but I admittedly haven't taken the time to sample widely.

[tedmiston]

I wonder why they split GP vs LP money into two separate companies.