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#9TDAYVC- DAY-14 ๐ฏWhat is Hurdle Rate? ๐ฏWhat is Carry Fees? ๐ฏThe preferred returns are also called as โHurdle Rateโ in VC & P.E Funds. It is the threshold return that LPโS should receive prior GPโS receive. In developed markets, The hurdle rate is lower & itโs around 8%. In Indian Market, Hurdle Rates in VC & PE are meant to be higher than the international market according to historical average returns & compared to stock market & therefore it could be around 10-12%. The purpose of having a hurdle rate is set the expectations of Investors as a benchmark rather than the guaranteed returns. Investors always expect to be outpeform the hurdle rates Consistently & therefore build the track record. ๐ฏHurdle Returns & Carry fees are both different where Hurdle returns are mostly must expected returns & Carry is if you outperformed your hurdle rate & then carry Fees is applied.Generally The structure is in 2-20% where 2 is Management Fees & 20 is Additional Returns. VC is HARD!
Zero Fund-VC|Investi...ย โขย 7m
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Zero Fund-VC|Investi...ย โขย 7m
#9TDAYVC-DAY-16 ๐ฏWhat is High Watermark in VC? ๐ฏWhat are Distributions/Waterfall? Apart from hurdle rate, Some consider also โhigh watermarkโ This is more common practice in hedge funds. This market denotes the highest value recorded by the f
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#9TDAYVC-DAY-12 ๐ฏTypes of Expenses for VC? ๐ฏWhat is a Self-Managed Fund? ๐ฏOrganisational Expenses: These are costs for VC Funds which includes such as Incorporation Costs, Statutory Compliance Cost of the Funds, Placement Commissions, Distri
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#9TDAYVC-DAY-12 ๐What is Management Fees? ๐What is a Expense for VC? ๐ฏManagement Fees- Management Fees & Expenses contributed to the fund as per investment agreement between fund & Investment Manager.No SEBI Regulations in this Matter. It
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#9TDAYVC-DAY-17 ๐ฏTypes of Waterfalls in VC? ๐ฏWhat is Clawback? Two types that are โEuropean & American Waterfallโ-Under European Waterflow, 100% of all Investment Cash is paid out to Investors on a pro-rata basis & therefore preferred returns
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#9TDAYVC-DAY-15 What are Additional Returns? What is the Catch-Up Clause? In Developed Markets, The structure is in 2-20% where 2 is Management Fees & 20 is Additional Returns.Additional Returns & 2-20 structure is not ideal in Indian AIF Market
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The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points to 6.25%, the first rate cut in nearly five years. What is the repo rate? Itโs the rate at which the RBI lends money to commercial banks. A lower repo rate means cheaper loans
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About Rates in the market... To strike a balance in market, the RBI has to consider all economic factors and carefully set the key rates. Any imbalance in these rates can lead to economic chaos: 1)Repo Rate:-The rate at which RBI lends money to oth
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Swiggy's upcoming IPO will be a multibagger win for early VC investors. ๐ฏDetailed insights will be available once their DRHP is public, but if you look at the history - - Elevation Capital: Investment of $5.9 M turned into $61.8 M (~10x returns) -
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