[ButWhatFor]

I’m laughing too much at this. Agree “I’m making a $15mm investment I need you to cover my up to $100k in legal fees. If you can’t do that, deal off.” Has always sounded funny to me.

But if you need money it’s just one of those things you have to do.

I think what should happen is the whole syndicate should share in total legal fees pro-rata or something. That way the lead isn’t wearing all the legal fees.

Also think this is based some in the standard practice of banks passing through their legal fees to those they lend to.

[snaily]

For an institutional fund, they can be different, non-fungible pools of capital. The $15M comes from fund limited partner (LP) commitments as part of the investable capital of the fund (i.e. was earmarked for investments and is not the fund manager's money, in a very real sense), but the $100k might (depending on the LP agreement for the fund) come out of the management fees, and if so, is very much part of the P&L for the fund manager.

For a corporate VC, its typically all the same pool, though.