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by dadrian 300 days ago
Most Fund I’s are going to be smaller funds, often $9.99MM to allow for a larger number of smaller LPs due to the $10MM threshold from the SEC. Whereas Fund II-IV are going to be considerably bigger, often hundreds of millions of dollars. So a large number of smaller funds falling off won’t make that big of a dent in the total dollars available, but may make it harder to get the smaller initial checks.
2 comments
pringularity 300 days ago
The threshold is actually $12M now! There are some proposals floating around to actually change it to $50M with a 500 LP cap

https://www.congress.gov/bill/119th-congress/house-bill/4431

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dadrian 300 days ago
Oh nice! That's probably reasonable, although I am pro keeping the accredited investor requirement.
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vonneumannstan 300 days ago
What could a fund like this even write checks for? Even the most basic SaaS companies are getting multiple of the entire fund as seed or pre-seed...
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ghc 300 days ago
Typically $250K-500K checks as a follow on. From what I'm seeing, lots of companies are still out there raising sub-$3M pre-seeds and sub-$10M seed rounds. You might only get 1-2% of the company but you can always try to buy up in later rounds through an SPV or your next fund, which can be a marketing strategy for raising fund 2.
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dadrian 300 days ago
The most basic SaaS companies are not raising $10MM at pre-seed, they’re raising $1-3MM at $10-30MM post.
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